Typically up to 25% of your annual turnover, or £10,000-£50m (from startup to commercial)
1-5 years (5-20 years for a commercial loan)
Varies according to lender, your business profile, amount and whether fixed or variable rate (e.g. from 7-30%)
There are different loans to suit your situation, from startup to established
A traditional business loan is a lump sum of capital that you pay back with regular repayments at (usually) a fixed interest rate. Lenders include high-street banks, challenger banks, online lenders and small local specialists. There are many different types of loan but the two overall categories are secured loans and unsecured loans.
The loan amount is typically up to 25% of your annual turnover or £10,000 – £50m.
Business loan is a broad category, and can refer to lots of different products including:
There is a huge range of lenders offering loans to businesses, and they all have different eligibility criteria, application processes and interest rates.
It’s often possible – though more challenging – to get a business loan if you have a poor credit rating. You may need to offer security or a personal guarantee.
It’s worth noting that if you take out a short-term loan you’ll pay higher interest, but you may pay more interest overall with long-term financing, because you’re borrowing for a longer period of time.
Within these different types of business loan – of course there is some overlap between them – you’ll find some that better suit your particular situation, e.g. you might be looking for startup finance, equipment finance or working capital finance.
Depending on how long you think you’d take to repay the loan you can consider:
You can raise capital without losing equity in your business. If you want to borrow without selling equity, a business loan may be the choice for you.
You can capitalise on a business opportunity; capture that critical market segment or launch the marketing drive you are certain will propel your business to next stage. Or an unforeseen cash flow problem may not prove fatal to your business. Often when lines of credit are exhausted, raw materials and supply demands need to be met without the business folding, a business loan may be the first or last resort.
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