It can be hard figuring out how to get a flexible business loan. Your loans option should be flexible otherwise you could end up with extra charges, no matter how good the rates may seem. Not only should your loan be flexible, you should try to get the best price. To help with the confusion, here’s a guide to getting a business loan:
Could Your Business Get A Grant From The Government?
This is the first thing you should try to find out. A grant won’t cost you anything, so if you are eligible of getting one it’s a very good idea. The only thing to remember is that grants can have guidelines with what you can do with the money.
Unsecured Business Loans
An unsecured loan is a good option if you are doing well financially. Your interest rates will depend on things such as how long you’ve been in business, your credit history and your assets and liabilities.
Another good thing to remember about unsecured business loans is that your property won’t end up being repossessed if for whatever reason you can’t pay. The rates will be affected though as you pose a risk to the bank.
Peer To Peer Business Loans
Peer to peer loans are private loans, and a form of social lending. If you have this type of loan you’ll borrow from another business or person over a managed network.
There are advantages and disadvantages, such as lower rates, but if any problems crop up it can be very difficult to fix them as these type of loans are not FCA regulated.
Bad Credit Business Loans
For this type of loan a bank will assess you and take everything into account about your business before making you an offer. Although a bank will sometimes offer you the same loan product as a business with good credit, your interest rates will suffer and become higher.
Compare regular loan products you are offered with products tailored to businesses with bad credit to make sure you get the best rates you can. You can go for an unsecured lender as these sometimes have loans especially for businesses with bad credit, you just need to beware of the high interest rates. If this is what you want to do be sure you’ll have the funds to pay off the loan by the end of the loan period.
Secured Business Loans
For this type of loan you’ll need to have property you are willing to put forward. These types of loans usually offer more protection and flexibility as you are putting forward your property. The only issue with this type of loan is missed payments can result in the items you put forward being taken away.
Points To Remember
First establish the options available to you, and then take into account your funding needs and what would be best for that.
You should compare the loan periods and how long you’ll have to repay, and also consider whether you would like to be able to repay the loan before the period is up.