THE BUSINESS LOAN BASICS YOU NEED TO KNOW
Every growing business is going to need a business loan to reach their goals at some point whether it’s to invest in staff training or to upgrade equipment that’s slowing down processes. But despite business loans being common, they can be confusing when you’re first faced with the task of not only selecting the right loan type for you but applying.
But don’t panic here we have all the basics you need to know and can offer support when you need it most.
What’s a business loan used for?
A business loan can serve a huge variety of purposes. They’re there to provide your business with a capital injection when you need it. It gives you a certain sum of money that you’ll pay back over a defined period of time through monthly payments with interest added on.
You can access both short-term finance options where the money is borrowed for up to a year to cover cashflow and smaller investments. Or you can obtain larger sums of money over many more months typically used for finance bigger projects. What you do with the money is up to you although some lenders will want to know the details before handing over their cash.
Like a personal loan, the rate you’re offered on a business loan will vary depending on several factors from your credit score to your average monthly income.
What’s the difference between a secured and unsecured business loan?
The first step to figuring out what business loan you should be applying for is to decide between a secured or unsecured loan. If you’re not sure what the difference we got you covered.
Secured business loans are taken out against something that your business owns, giving your lender assurances that they’ll be able to recoup costs should you fail to make repayments. The collateral can be a variety of things, from property that your business owns to specialist equipment. In contrast, unsecured loans give you access to money without having to use collateral.
Secured loans will usually give you access to better lending rates as you pose less of a risk. However, being approved for a secured loan is often a long process and it’s not suitable for all types of business such as firms that have few valuable assets.
Whether you’re interested in a secured or unsecured business loan, Revolution Finance Brokers can help you throughout the process ensuring all your paperwork is to improve efficiency. With a vast network of over 80 lenders, we have the connections to help your business receive the finance it needs.