If your business is not growing and operating as you would want it to, you may choose to use a business loan.
A business loan is a loan that you take for the purpose of your business. Therefore, the type of business loan you take may differ depending on what you intend to use it for.
Understanding the business loan
When looking for a business loan there are several decisions to be made as well as understanding the choices needed when doing a comparison. Below are the key points.
A loan with a fixed rate vs a loan with variable rate
A loan with a fixed rate is the type that the interest rate is fixed and therefore making the repayment of the loan quite predictable while a loan with a variable rate is the type that interest rates keep changing from time to time.
Secured vs unsecured business loan
The secured business loan is the type where the loan has a collateral backing in form of an asset. In the event that the borrower defaults in paying then the lender can decide to own the asset that was in form of collateral.
The unsecured business loan is the kind where the lender does not require collateral but may need you to have a guarantor who he will pursue in case you default in payment. Note that one is given an unsecured loan if they are only interested in little amount of money but, they need a secured loan when they are borrowing large amounts.
Long term vs short term loans
You will need to determine the duration of time you need the loan for. Note that different lenders have different maximum and minimum loan payment terms and the duration will probably depend on your terms.
Below is a brief discussion of the business loans you may secure note that, you must be 18+ years, a UK resident and not bankrupt.
Government-backed startup loans
This is personal loans that are granted for business startup of a UK based business or to one that has been running for 2 years. The receiver is offered free 12 months mentorship.
The loan amount is usually £500-25000, it has a term of 1-5years with a fixed rate interest.
NatWest small business loan
It gives to SMEs in the UK especially if you need to add some cash to the business
The loan amount is £1000-£25000, it offers fixed rate system, with a payment duration of 1-10years.
HSBC small business loan
It offers loans to small business, the range is £1000-£25000, it has fixed rates and the duration of payment is 1-10 years
Santander small business loan
As long as you have a Santander business account they offer loans to small businesses. The amount being £2000-£25000, with fixed interest and a 1-5years repayment plan
Ratesetter business loan
This is a peer to peer loan where the money is borrowed from people and the loan amount is £25000-£2million with a variable rate and 1-5 years duration of payment.
Funding circle business loan
This is also a peer to peer loan where you borrow money from people and organizations
The loan amount is £5000-£1million with a variable rate of interest and a duration of payment of ½ -5years.
Note, you need to familiarize with the eligibility criteria of different lending institutions for a business loan UK. Visit: https://www.aspirebusinessloans.co.uk/…