How Can Loanable find me a Commercial Business Loan?
As a business owner, be it a small sole trader or a large LTD company, be it 2 employees, or 200 employees, at some point you may need to borrow money. It may be to expand your business, or simply to start a new business up, either way, you may need a business loan.
If you are an established company with a proven sales record, sometimes having profits is not enough. You may need that extra bit of cash to update equipment, get new machinery, hire more employees, or financing to secure the next big contract.
If you are a small business, or a new start-up company, you may be using your own savings, or credit to get the business up and running, but at some point you may hit a financial wall, and need a commercial business loan to get to the next stage.
What is a Business Loan and How Does a Company Qualify For One?
A business loan is a loan that is granted to a company or business, and is for the business. The loan can be to purchase equipment, office space, let storage space or a depot, purchase stock, advertising, anything related to the company or business.
For a new company, a business loan may be to start-up the company.
The loan is given to the company, and becomes a debt to the company, and a part of the company’s operating expenses.
In some instances, if a company is a start-up, or doesn’t have a proven track record of sales, the lender may require a guarantor for the loan. The guarantor may be one of the Directors of the company, or if the business is a sole trader or partnership, the owner or one of the partners.
Qualifying for a business loan can be based on many factors, such as the company’s credit if they are an established business. Other factors used to determine and approve a business for a loan may be:
- Length of time in business
- Cash flow
Again, business loans can be used for any business related expenses, to purchase sock or inventory, wages, office supplies, fixtures, furniture, etc.
The loan(s) become a part of the company’s operating expenses, and are paid back in accord with the terms outlined in the loan agreement.
Various Types of Business Loans
There are different types of business loans, just as there are various types of personal loans. The different loans may serve a different purpose, and also be used by different businesses.
- Secured loans: Just as a secured loan for an individual is secured by something, a piece of collateral, the same is true of a business loan. There is something securing the loan. The loan maybe for a piece of equipment, which then the equipment secures the loan. Secured loans can be secured by equipment, vehicles, machinery, and other tangible items.
- Unsecured loans: These are personal loans to the business with nothing securing them. They could be revolving lines of credit, overdrafts, or simply a person loan.
- Invoice finance/loans: There are various forms of invoice financing, but in the end they all are a form of borrowing/loan against future revenues or invoices to be paid to the company. The company is borrowing against future profits they will receive in the form of invoices to be paid.
- Asset finance: There are companies that may look “wealthy” on paper due to assets they have. It may be valuable equipment they own, property, vehicles, all assets with a value, however, the company may have a cash flow issue. Asset financing allows the company to borrow or get a loan against the assets they hold. These are a form of secured borrowing.
If you require a business loan, Loanable can find not just the right loan for you, but the best lender suited for your needs and circumstances.
- Professionals in the field of lending, commercial or personal loans
- As a broker we do the shopping around for you to find you not just the best deal, but the best loan suited for your needs
- Speed: time is money, and at Loanable we know it, you need your financing quickly as to not lose out on a good deal and savings
- No upfront fees or charges, period!
- No fees: just to remind you:)
- Quick and easy online application
- Your details are safe with us, we never, ever sell or exchange them…ever
Looking for a business loan or some form of commercial financing, complete our easy online application today!
FAQs about Business Loans
I need a loan for my business but am unsure what kind of loan to get?
The type of business loan that best fits your company will depend on a few things: * How much do you need to borrow? * What type of business do you have? * Does the company have any assets, such as equipment, property, or anything of value? * What is the loan for? * Does the company have receivables/invoices where they are owed money? Answers to these questions, will help to guide you to the loan that is best for your business needs.
What documentation do you require for me to apply for a loan?
The documentation Loanable needs to process your request is very minimal. Once contacted by a lender, they may wish to see a business model (if you have one), cash flow sheets, expenses, outstanding receivables, and any other documentation that supports the current finances of the company. It may be the lender does not require all these, but this is just a list of what may be asked.
Is it possible to receive more than one loan offer?
Yes, it is possible, which puts you in a more competitive situation to get the best rates and deal for your company.
My company has been struggling the past year, but feel a loan could turn things around. Can we still get a loan?
Possibly yes. There are many factors involved in being approved for a business loan. Your business may be struggling due to being owed money for jobs done, these invoices can be borrowed against.
How much can we borrow?
The loan amounts extended to you will depend on the repayment terms, interest rates, and also the type of business loan you require.
My business is just starting out, can we still get a loan?
Yes, we work with lenders who specialise in new companies and start-ups
What can the loan be used for?
Your business loan can be used for anything related to your business. The lender will ask you what the loan is for, and this can help them determine which loan type is best for you. If you are looking to buy new equipment, a lease type loan may be best. If you take credit and debit cards as payment, a merchant cash advance may be better suited for your business.
My business just needs a short-term loan for a few months, is this possible?
Yes, the term for a business loan can be tailored to fit your company’s needs, be it for 6 months or 6 years.
How long does it take to get approved and the money in my company's bank account?
The application process can be quick, and approvals within hours and the money transferred within 24 hours. It depends on the documents that may be required, the type of loan, amount of the loan, and the lender’s requirements.
Does my company need to be trading a certain period of time before we can get a loan?
No, there are lenders that specialise in loans to start-up firms. It can also depend on the type of business you are in, your business model, and what assets the company may hold.
How much does it cost to apply?
There are no fees or application charges to apply to Loanable for a business loan. You only pay the interest and charges that your lender may charge for the loan.
Does my company need to be trading in the UK?
Yes, there are lenders that operate with companies outside the UK, but for our purposes here, your company does need to be headquartered in the UK.
Is there any type of business that cannot get a business loan?
Technically no, however, there can be some industries, such as gambling, financial services, and commercial real estate, that are regulated in different ways. Due to these regulations, while loans are available, they may need to be made by specific lenders.
Do I have to be a LLC/Limited Liability Corporation in order to get a business loan?
No, your business can be a sole trader or even a partnership, you do not need to be a LLC in order to qualify for a business loan.
What happens if I miss a payment on my loan?
If you think you are going to be late on a loan repayment, or miss a payment completely, contact your lender to discuss this first thing. They may be able to restructure the loan or offer advice. It is important to contact them at the first sign of any problems as they are there to help you.
Can I pay my loan off early?
It will depend on the type of business loan you have, but usually yes, any additional payments or paying the loan off early is fine.
Do I need security or some asset to get a business loan?
No, not all business loans require security to be approved. There are types of loans that are unsecured, and also those based on future sales, so no security or assets are required.
Do you do start-up loans?
Yes, however the process and criteria for a loan can be different than for an established business with a proven track record. It is helpful if you have a business model in place, and also a projection sheet outlining your proposed sales, expenses, and profits.
Is there a difference between a personal credit score or rating and a business credit score or rating?
Yes there is a difference. A personal or individual credit history and credit score is just for one person and their accounts and payment history. There is no “universal” credit scoring for business, different credit bureaus, and different lenders, may score a business out using different factors. A business credit history or credit profile, reflects how the business and business owner handle their financial obligations and bills.
I have gone bankrupt in the past, can my company get a business loan?
Possibly yes. If it has been a couple of years since the bankruptcy and depending on the company’s financials, yes you can get a business loan.
Do I have to have a business model or plan to get a business loan?
No, not necessarily. If your company is new and just starting out with no track record, a business model can help in getting a loan. Established businesses with a history of trading, may not need one. It also can depend on the type of business loan you are in need of. Some loans are just advances on future sales.
What is a line of credit?
A line of credit is a revolving type of loan, similar to a credit card. If you have a line of credit of £10,000, you can use this similar to a credit card or overdraft, to make purchases, or pay company expenses up to this limit. The amount of the credit line used can be paid back at anytime in whole, or in payments depending on the terms of the agreement. Once the credit limit has been paid, you can use it again to the maximum limit allowed.
What is a guarantor for a loan?
A guarantor for a loan is someone who is signing for the loan, and stating if the borrower defaults or misses a payment, the guarantor will make those payments. It is not uncommon in business and lending for a lender to as a Director or someone who owns the company to sign as a guarantor for a business loan.
What is collateral?
Collateral for a loan is something that secures the loan. An asset that is pledged by the borrower, and held by a lien by the lender. It is security for the loan. Loans that have collateral are said to be secured loans, and if they are not repaid, the lender has something they can physically repossess to offset any loses from the loan. These loans usually have lower interest rates due to being secured.
What kind of interest rate and terms are available for a business loan?
The repayment terms and interest rates on business loans vary according to the type of loan, amount borrowed, and if the loan is secured or unsecured. Using Merchant Cash Advances as an example, these advances get paid back out of your credit and debit card transactions, so if you have a busy month, you may pay the advance back quicker than if you have a slow couple of months. You can always pay your loan off early if you are in a position to do so.
Can I get a loan to buy a business?
It is possible to get a loan to buy an existing business. You will need to know about the business, such as their cash flow, expenditures, projected sales and profits. This type of loan may be looked at closely to insure the business is doing well, and by doing so, the lender is protecting your interest as well as theirs.
Can I get a loan to buy a commercial property?
This type of loan is more a real estate loan, and would be secured by the property itself. You can get a loan to do this, but it is not per se a business loan.
How can I check my businesses credit rating?
There are various credit bureaus that offer business credit reports, some may ask you to submit documentation as to help them compile a credit report on your company.
Do you charge a fee for your services?
No, Loanable does not charge any fees upfront or otherwise to you to apply for a business loan.
What if I get approved for and accept a business loan, and later I need to borrow more money, can I do this?
It is possible yes. Increasing or getting a new loan of a higher amount will depend on the lender, and also how much more you are in need of borrowing. If you have paid off a substantial amount of your first loan, it may be easier to increase your credit or loan limits. If you have not paid off much of your initial loan, the lender may need to re-underwrite a new loan or look to increase your line of credit, should you have one.
Can I use Bitcoins to secure a loan for my business?
That is a very good question, and yes, there are lenders that are specialising in allowing borrowers to use their Bitcoins to secure or as collateral for a loan, be it a business loan or personal loan. This is a very new area in lending, and as such there is limited resources for this, and also a strict criteria used in the lending process.