Updated: Nov 22
Welcome to our next instalment of our quick guides to business finance products with Business Loans being our new topic for the week. In this article, we will provide you with everything you need to know about business loans, including their benefits, different types, and how they can be utilised for business growth and financial management. Whether you're a business owner looking to acquire a business loan or an individual seeking flexible financing options, we've got you covered!
WHAT IS A BUSINESS LOAN?
An Approved business loan is a lump sum over a fixed term, you’ll pay it back on an agreed schedule of regular repayments, with the full amount to pay totalling the money borrowed plus any interest or fees being charged.
Business loans can be used for; Business Growth or Expansion, Renovation or Fit Out, Furniture, Marketing Campaigns, Software and IT Systems. With a business loan from Approved Business Finance, you can spend more time focusing on growing your business and less time worrying about how you'll fund those plans.
With a streamlined process, quick approval and tailored monthly repayments, you can be assured that we will find the best deal for your business. You can check your eligibility for business loans in seconds.
WHAT ARE THE KEY ADVANTAGES?
Cash flow management:
Acquire assets without upfront payment, preserving working capital and maintaining cash flow.
Flexibility and scalability:
Tailor the repayment structure to meet specific business needs, allowing for easy upgrades or replacements as requirements change or expand.
Working capital support:
During periods of financial challenge or temporary cash flow constraints, a business loan can provide the necessary support to bolster working capital.
Keep Equity & Control:
The benefit of opting for a business loan instead of an investment lies in retaining complete ownership and autonomy, as the lender does not exert any control over your business operations. Conversely, investors typically request a share in the business in exchange for their financial contribution, often seeking influence in key decision-making processes.
Fast Pay Out:
Business loans are known for their streamlined process, requiring only minimal documentation, and ensuring swift disbursal to companies. This ensures that businesses can continue their operations and pursue growth plans without any interruptions or delays caused by waiting for funds.
EXPLORING THE SHORT-TERM BUSINESS LOAN OPTIONS:
Similar to a personal loan, obtaining a business loan involves submitting an application to a lender who evaluates whether they will extend the loan to your business and at what interest rate. Upon accepting the lender's offer, you'll receive the approved loan amount and commence repaying it, along with interest, on a monthly basis over the agreed loan term.
Eligibility for the loan depends on various factors, such as your established trading history, cash flow position, and credit history. These factors collectively determine the likelihood of your loan application being approved.
CAN YOU OBTAIN A BUSINESS LOAN WITH BAD CREDIT?
Individuals or businesses with a less-than-ideal credit history may encounter challenges in obtaining loan approvals. For those seeking business loans despite poor credit, the offers they receive may come with high-interest rates due to the perceived greater risk to the lender. However, bad credit can be gradually improved by responsibly managing new debt and settling old debts.
Obtaining start-up business loans with bad credit can be particularly difficult, as small businesses are already considered risky by lenders, making those without a solid financial track record an even higher risk.
It is crucial to avoid applying for numerous loans, as this can further negatively impact your credit score. Each application, even if rejected, generates credit checks that get recorded on your credit file, indicating an urgent need for funds. This situation could lead to further rejections or higher interest charges.
HOW LONG DOES IT TAKE TO GET A BUSINESS LOAN?
The process of securing a loan can vary, ranging from just a few hours to several weeks. The duration it takes to secure a business loan is influenced by various factors, including the type of loan and the specific lender involved. Notably, secured loans generally require more time to arrange compared to unsecured loans.
HOW DOES IT WORK?
We keep our business finance options transparent - no hidden fees or nasty surprises. This is business finance made easy. Our no-obligation application won't impact your credit score.