A business loan is an excellent means to provide what may certainly prove to be much-needed liquidity into any enterprise or organisation. Like other types of loans, this vehicle will supply a certain amount of money in the form of a lump sum. Thereafter, the business will need to make scheduled payments that include interest. The money can be used for various operational needs. Some business loans can even exceed one hundred thousand pounds.

Top 5 Business Loans

Provider Loan Type Min/Max Loan Amount Loan Term

HSBC Small Business Loan
Bank Loan £1,000/£25,000 12 months to 10 years More info

NatWest Small Business Loan
Bank Loan £1,000/£25,000 12 months to 10 years More info

Everline.com Business Loan
Short Term Loan £3,000/£120,000 1 week to 3 year More info

Fleximize Business Loan
Short Term Loan £1,000/£1,000,000+ 1 month to 2 years More info

YesGrowth Business Loan
Short Term Loan £50,000/£250,000 6 months to 5 years More info

Types of Business Loans

Loans can be considered either secured or unsecured. A secured business loan will involve the use of collateral (on the part of the client) should he or she be unable to repay the amount that was borrowed. An unsecured loan requires no backing and due to this fact, interest rates tend to be much higher. Thereafter, these loans can be further categorised. Loans that involve a line of credit will deposit a certain amount of money into an account when it is needed. These funds can be used to pay costs, but not to purchase equipment. Another type is known as a revolving line of credit. As the name hints, a certain amount of money can be borrowed and if it is repaid in a timely fashion, this very same amount can be borrowed again. Of course, loans from family or friends are also common. Still, there is a certain amount of personal and familial risk involved should the borrower default.

Things to Take into Consideration

One of the most important metrics is to determine how the money will be used. Can the loan generate a sufficient amount of additional income to ensure a timely repayment? Are operating costs expected to exceed future profits? Notwithstanding these internal variables, it is critical to take into account the amount of interest that will compound. This may be difficult, but most companies will offer what is known as a loan calculator. In essence, this feature will illustrate the total amount that needs to be paid (and the monthly figures with the interest included). Determining all of these factors will enable one to choose the proper business loan with clarity and insight.

How to Get the Best Deal

There are countless loan providers available and not all of them provide equal levels of services. A handful of the main points to keep in mind are:

  • The level of communication provided.
  • The possibility of late payment fees.
  • Any testimonials from previous borrowers.
  • The reputation of the lenders themselves.

Thankfully, it is quite easy to determine these factors through the Internet. Business loans can be wise and fruitful financing options and with prudence, a short-term loan venture equate to long-term success.