Whether it is a small or a larger business you wish to contract financing for, there are always predispositions or requirements that the lender will set, in order to make you eligible for the respective loan. They might say that you can receive cash amounting from £5,000 and up to £1,000,000, even if you have a bad credit record, or that there is no collateral required, no upfront fees or monthly payments, but you will find that there are certain conditions that must be met. For example, you have to own a very well established business on the market, which’s credit card sales reach a minimum of £4,000 per month.

If your business does have built up clientele using the credit card system successfully, this is a great plus in the eye of a lender, because it shows you are a constant provider. Or, if you run a seasonal business, things might get a little tougher because you must show 12 months of sale records; one benefit a lender may offer is that you might not be required to pay monthly fees, which is a good option if you run a seasonal business.
On the other hand, if you are only at the beginning of your running your own business, there are financing possibilities for you as well. It is true however; in this case you do need to show a good credit report, and must wait up to 2 weeks for approval. Because many of these loans are offered on unsecured terms, the least you have to show is that credit bureaus like Equifax, Experian and Transition do approve of your credit scoring.

You have to make sure that if you contract a business loan, the repayments schedule will not entirely eat up your daily cash-in flow. Paying back the loan is not the only expense you must support, but because you run a business (be it large or small) there are several outstanding expenses you have to honor. So, you cannot afford a loan on very good terms but with high repayments.

Business loans and their terms and conditions should significantly vary from one business type to the other. It is not the same if you receive for example a loan of £10,000 with a monthly repayment schedule of £500 and you run a restaurant, or if you receive the same funding while you run a very small business, where after all other outstanding expenses you will remain with very little money. Consequently, you should check those financing institutions which do have a variety of offers, and where you can receive counseling for your type of business, and fit to your financial background. After all you don’t want to end up in debt.

What you need to check when shopping around for a business loan, are the following:

• A convenient interest rate (if interest may be tax deductible even better)


• No high or exaggerate application fees; after all it is a loan almost like any other, it is special only in you are taking it for business purposes


• Possibility to choose repayment schedule (for example choose between 6, 9 or 12 month term)


• If no collateral required, make sure you make agreement on reasonable terms