A Guide To Loans For New Businesses

By Jamie Stewart on 17th December 2018

Business loans are often a difficult thing to comprehend. There are a large number of lenders currently available that offer very different rates, which means it can be challenging finding the right options that best suit your yearly business plan. However, here at Think Business, we have compiled a guide to help you work out the right loan for you and your new business.

Business Loans For Starting Up

When starting a new business, you can be presented with a number of challenges, such as renting office space or paying for the necessary equipment. A business loan is a perfect way to provide yourself with the money required to get your business off the ground. We understand that this can be a challenging time which is why we ensure that you are matched up with the perfect lender for you. Our process here at Think Business is very simple. All you have to do is apply through our website and we will arrange a consultation.

During this process, we will discuss a number of key elements such as requirements and your business plan to help us find the best option for you. By being completely open with our experienced team, we can work with you to ensure that your application has the best possible outcome.

How Do I Apply?

After the consultation period, we will then put you forward to our matching system. There, our experienced team will find you a lender that fits all the criteria that you have specified to us. The lenders you are then matched to will bid to fund your project allowing you complete control over who funds your products. Although this may seem like a strange process, this allows you to have complete control over the process and the amount of APR that you will be spending on your repayments. The iFunds matching platform is specially designed with you in mind. The stress-free process allows the lenders to come to you and allow you to continue with setting up your business.

Useful Tip #1

When applying, it is important to be aware of the type of loan that you are applying for as this can have a profound effect on the interest rate and in turn the amount of money that is being paid back every month. The lower the interest rate is on your loan, the more money you will spend repaying in the long term.

Types Of Business Loans

As mentioned above, the type of business loan that you opt for can have a profound effect on the amount of money that you are spending overall. Below is a breakdown of some of the loans that are available to you and why each are beneficial for your business.

Unsecured Business Loans – Unsecured business loans are perfect for those that are looking for money as quickly as possible. Due to them not needing a level of security, you are able to find a lender and have the money within your account in just a few days. Although you may not be able to borrow a large sum of money, this is an ideal way to pay for any expenses that you may encounter within a short space of time.

Secured Business Loans – Unlike an unsecured business loan, a secure business loan requires a business or individual to put forward a level of security to act as a barrier between them and the lender, this then allows a business to borrow a larger sum of money for rent as well as other pieces of equipment. Although the idea of offering security on a loan can seem daunting, it is important to remember that this then weakens the risk that is associated with you as the lender has the stability of knowing that you are covered if you should begin missing repayments rather than losing your entire business.

Working Capital Business Loans – Finally, there is the option of the working capital business loan that allows a business to borrow money as and when they need it from a specific group of lenders and only have to pay back the amount that they have borrowed. This is the ideal option for smaller businesses as this works as a reserve fund should you ever find yourself in a financial situation.

Useful Tip #2

When applying for a loan, be sure that you have done your research. Look at the reviews from people that have used the lender in the past and ensure that the repayment method that you have selected is more than affordable for your business. If you find that the repayment method is then not beneficial for your business and you begin to miss repayments, this can then have a negative effect on your credit score which can have an even more damaging impact on your future chances at being able to apply for loans. It is important to ensure that your credit score is as positive as possible when starting a business as this will give your company the best possible prospects with future endeavours.

Why Is This Beneficial For Your Business?

Applying for a business loan can benefit a business in a number of ways, not only can it help to build the credit score of your business in a positive light, but it can also give you the funds that you need in case of a financial emergency or to replace a vital piece of equipment. This will allow you to expand and grow your business in your own time allowing you to receive the funding in a reliable way and pay it back with a repayment method that is right for you.

For more information about how we can help you here at Think Business and how you can use your business loan to get your brand off the ground, contact us for your individual quote and get started with your application process today.