Getting a small business loan in the UK can be complicated, but it doesn’t have to be hard! This guide on getting a loan for small business UK will take you through all the steps. You need to know about getting approved and finding the best deal.
Whether you’re looking for an asset loan, a working capital loan, or something else, it will help you. All that’s left after you finish this comprehensive guide on how to get money to start a small business UK are the exciting steps of taking your new small business from an idea to reality!
Understand the 3 main types of loans
There are three main types of loans. A business loan, credit card loan, and peer-to-peer lending. The first option is the best for businesses that need long-term financing or require more than $250,000 in funding.
Credit card loans are outstanding if you only need short-term financing or don’t want to use personal assets as collateral. Lastly, peer-to-peer lending is an easy way to borrow money from people vetted by the service company.
Understand the Types of Lenders
There are seven different types of lenders you can use. Banks, credit unions, and community development financial institutions are the most common sources of loans.
National organizations offer Loans for Small Business UK, like the SBA and SCORE (Service Corps of Retired Executives). You should do your research to find which type of lender is best suited to your needs.
Qualify for a Loan
The Small Enterprise Loans Fund provides loans of £10,000 to 1 million. It is designed to help businesses unable to borrow from banks because of small overdrafts or other problems.
To qualify for a loan, you need: to be incorporated and have been trading for at least 12 months; turnover over the last three years must be at least £150,000; your assets must not exceed twice your liabilities.
Determine What Type of Lender Is Right for Your Project
Getting the right lender for your small business is more than picking the lowest cost. There are many lenders, and each will offer its own set of terms, so you must research what’s available to get the best deal.
Prepare a Business Plan
Starting a business without money can be challenging, which is why many people are turning to loans. Many banks offer Loan for Small Business UK, but it can be hard to find the best deal. In this blog post, we will look at what you need to qualify for small business loans and how you can find the best loan for you. You can read more, why a Business Plan is important for your Success.
Gather All the Necessary Documents
To get your loan, you will need the following:
- Personal Identification – This can be your passport, driver’s license, or national identity card.
- Proof of Residence – Utility bill (water, gas, electricity) or council tax bill.
- Bank Statement – The last three months’ worth of bank statements.
Find Other Sources Of Financing
If you cannot afford the upfront costs of starting your own business, other sources of financing can help. For example, if you’re not sure how much funding you’ll need, government programs provide low-interest loans and grants to get your small business off the ground. You can apply for these loans and grants through your local government agency or online at Grants.gov.
Decide On a Repayment Schedule and Interest Rate
To get a loan, you will need to fill out an application. The application should include information about your credit history and personal income. If approved, you will be given a loan agreement with the terms of the loan.
These terms may include how much money you can borrow and for how long, and any fees or interest rates associated with the loan. You should also decide when you would like your payments to be due and at what interest rate if there is one.
Choose The Right Terms And Conditions For You
The terms and conditions you choose will depend on your Loan for Small Business UK type and your personal preferences. For example, if you are applying for a mortgage, you may want the term of the loan to be longer than if you were applying for an unsecured loan such as a credit card or small business loan. Make sure you understand each term’s meaning before signing the dotted line.
If you are looking ideas to start a new business, you can read Top 10 unique business ideas to start in 2022