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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.
As specialist mortgage brokers for a huge variety of applicants, the whole-of-market consultants at Revolution provide access to an exceptional range of lenders, products and mortgage deals. That means you get the advantage of professional negotiation and broker-exclusives through an established lending network to ensure we always find you the most competitive mortgage available.
The content included in our articles, blogs, web pages and news publications is based on information accurate at the time of writing. Note that policies and criteria can change regularly throughout the UK mortgage lending market, and it remains essential to contact the consultation team to receive up to date guidance. The information included on the Revolution Brokers site is not bespoke to any circumstances or individual application scenarios and therefore is not intended to be used as financial advice. The content we share is designed to be informative and helpful but cannot be relied upon to provide individual advice relevant to your mortgage requirements. All Revolution team members are fully qualified, trained and experienced to provide mortgage advice of an independent nature.
We collaborate with lenders and providers who are regulated, authorised and registered with the Financial Conduct Authority (FCA). Should you require specific mortgage borrowing types, some products such as buy to let mortgages may not be FCA regulated. The Revolution team can provide further information about regulated and unregulated lending as required. Please remember that a mortgage is a debt which is secured against your home or property. Your home can be at risk of repossession if you do not keep up with the repayments or encounter any other difficulties in managing your mortgage borrowing responsibly. This also applies to any remortgage or home loan secured against your property, including equity release products.