How do I compare business loans?
At Bionic, we use smart technology to help make business comparison a whole lot easier. And the team at Think Business Loans, the finance partner of Bionic, do the same for business loans comparison.
As soon as they know a bit about your business and what you need funding for, they’ll use smart data and state-of-the tech to match your business against thousands of potential lenders and finance options.
As part of the comparison, you’ll be shown your eligibility status and amounts available. We’ll run a soft credit check to do this, so as not to affect your credit score. You just need to choose your preferred lender, and we'll take it from there. If you proceed with the application, your lender will run a hard credit search before making a decision. A record of this search will appear on your credit file.
Think only works with responsible lenders, and so you’ll need to give evidence of your business's turnover and affordability for underwriting purposes. Again, smart technology is used to help make this as easy as possible – simply upload your supporting documents or connect via OpenBanking for a decision.
Once everything is underway, you can check your application using the Think Business Loans’ online client portal. This means you can stay updated on the status of your application and communicate directly with lenders. Apple users can also get updates using iOS app.
How much does a business loan cost?
The cost of business finance depends on the type of loan you take out, the lender you borrow from, and the current circumstances of your business. The rates you're offered depend upon the type of risk you pose to the lender. This risk is broken down into the following categories:
- Category A+
You have clean business and personal credit files, profitable. Trading 5+ years. - Category A
Clean personal and business credit, healthy profits, trading history 2+ years. - Category B
Some minor issues on your credit file in the past, but good recent performance. - Category C
Recent credit problems such as CCJs (settled) or any missed payments. - Category D
Bad personal credit but an overall good business. CCJ’s (unsettled) or defaulted payments.
Get in touch with the tech-enabled team at Think Business Loans for a personalised business loans comparison.
What are Commercial Lenders Looking for
Although there’s no ‘set standard’ criteria for business loans, lenders will usually look at the following before deciding whether to lend to you:
- Turnover vs Loan amount (ideally it will be 30% of your turnover)
- Trading history over the last 18 months – this suggests experience and lowers risk
- No serious adverse credit – Settled CCJ’s will be entertained if the business is profitable
- Business must be based in the UK
- Are the directors homeowners? – this can affect the amount offered
Ideally, lenders will need to see one or more of the above points being met, but we work closely with our panel to help ensure we can match your business with the right one.
What types of business can take out a loan?
Think can compare business loans for a range of businesses across all industries, including microbusinesses, small businesses, and larger companies. Here are some examples of the businesses we can find finance for:
- Agriculture - Farming equipment isn’t cheap and can quickly become outdated by newer technology. Farmers can get finance for a range of needs, including expansion, new equipment and more.
- Dental Practice Finance Solutions - Whether you are looking to buy a new practice, expand your existing one, or invest in new equipment, we can help you find finance to fit your needs and circumstances.
- IT Software and Technology Finance - The speed at which technology is always developing puts pressure on businesses to invest in cutting edge hardware and software. Our tech-enabled team can help you find the right finance.
- Nursing & Care Homes - Although very rewarding, care homes can be costly to run, particularly when you consider the level of care and medical technology needed to help residents. We can help you secure the finance you need.
The tech-enabled team at Think can take the stress and worry out of finding the right type of finance and the right lender.
What lenders do you compare?
Our finance division over at Think work with a panel of trusted lenders to find the right finance solution for your business, including high street banks, challenger banks, and alternative lenders.
What are high street banks?
High street banks are large retail banks with branch locations across the country, and maybe across the world. As the name suggests, these banks have a high street presence, and include familiar names like RBS and NatWest, Lloyds and Bank of Scotland, HSBC, Santander, Clydesdale, and Metro Bank.
High street banks offer a range of business finance options, such as commercial mortgages, asset finance, secured loans, unsecured loans, factoring and invoice finance. The amount you can borrow from a high street bank will lend you will depend on the type of loan you want, your credit score and your circumstances.
Although high street banks like to offer competitive rates, it’s worth comparing what’s on offer from challenger banks and alternative lenders.
What are challenger banks?
Challenger banks are smaller, less well-established banks that don’t have a high street presence. But just because you’ve never heard of them, it doesn’t mean they’re not a viable option. We only work with reputable lenders, and in order to be defined as a ‘bank’, the company must be authorised to accept retail deposits by the UK finical regulator the Prudential Regulation Authority (PRA).
Challenger banks can often only be approached via an intermediary or finance broker, and our close working relationship with our panel of lenders means we may be able to negotiate favourable rates for your business.
What are alternative lenders?
Alternative lenders are those that work outside of the normal banking system, such as peer-to-peer (P2P) lenders. P2P lenders bypass banks by using a lending platform to directly match with borrowers.