Money for a loan
Obtaining money in the form of a loan is, for most people, not too difficult an ask; however getting a loan at an affordable, sensible, interest rate, now that’s a different kettle of fish! So to find a loan to get your business started read on….
There are many loan companies out there eager to part with their money in exchange for lucrative returns. The interest rate on a loan will vary wildly depending upon the source and your credit rating; if you’ve had financial difficulties in the past then expect to pay a higher rate of interest. Lenders are not charities, they carefully assess all risks to their investments.
Money for a business start-up loan
The generation of new businesses, and the development of existing ones, is recognised as a very good tonic for the economy. Successive governments have sought to encourage business growth, with notably, relief on business rates and especially low interest rate loans to encourage start-ups.
Business start-up loans, backed by the government, are available through many sources, including banks. Should you be seeking finance then be sure to ask your financier about the government’s business start-up scheme.
How much can I borrow with a start-up loan?
Currently, you may be eligible for a loan from £500 – £25K. Now don’t for one minute think that this is a done deal; your business idea, or expansion plan, will have to sound good and well thought through, showing, ultimately, good profit.
How much interest will I pay?
You will pay a fixed rate of 6% per annum over a decided period from 1-5 years.
Do I have to put my house up as security?
No! This loan is unsecured, which means there will be no charge upon your property or other assets. Although, bear in mind, you will remain liable for making the repayments in full.
What will I need to help secure a start-up loan?
First and foremost you will need a good business idea, one that you’ve fully researched. You will need to convince the lender that your goods or services will sell! Not only sell, but turnover a respectable profit that will repay the loan and leave you with a decent income.
The only way to convince a would-be lender is to present a ‘business plan’.
Why a business plan?
Quite simply, a business plan is the essential key to establishing:
- For your own peace of mind, that the business will ‘work’ and
- For the lender’s peace of mind, that his or her money is safely invested
An effective and impressive business plan must contain succinct pointers as to your business’ viability; including projections as to predicted sales and profit margins. A daunting task for even the most articulate.
Fortunately, there will be plenty of help available to assist you with the compilation of your business plan.
There’s more good news, once registered for a business loan you will be allocated a business mentor; someone with vast experience who will lend ongoing support and advice.
A start-up loan makes good sense; not only can you get good, manageable interest rates but also professional ongoing support. Others will have a vested interest in your business, failure is simply not an option.
Check out the governments’ start-up loan scheme, it could be your gateway to a profitable, rewarding future.