Choosing a business loanJanuary 24, 2017
Finance is a vital part of ensuring you have the necessary funds in place ready for when you need them most. When it comes acquiring finance, a popular option among business owners alike is the trusty business loan. However, loans tend to come either secured or unsecured, offering short or long-term repayment schemes. In order for you to acquire the most befitting loan solution, it’s vital that you understand how they function.
With Rangewell, our services can help source the perfect business loan for your individual needs, ranging from £5,000 to as much as £1,000,000 – for you to use in whichever way you see fit. If you’re seeking a business loan, there are two questions you need to ask yourself first:
- How much do you need to borrow?
- How long do you need the money for?
When we discuss ‘Terms’, what we’re essentially discussing is the duration of the repayment scheme. Short-term loans usually consist of a repayment scheme lasting between 1 and 3 years. Meanwhile, with long-term loans, the repayment scheme can last from 3 years and beyond.
Secured and Unsecured Loans:
When we talk about secured or unsecured products, what we’re actually referring to is whether or not assets will need to be set aside as security. Offering up security gives lenders a confidence boost, especially when dealing with larger sums. Should your business become unable to repay the product, lenders can acquire the right to seize assets.
On the other hand, with unsecured products, security is not offered so lenders can’t seize assets should calamity strike. Instead, lenders may ask you to sign an agreement stating your intention to adhere and comply with the repayment scheme, as a goodwill gesture. However, failure to repay will affect your credit score and make it harder for you to acquire finance in the future. Due to the nature of this type of product, it’s usually offered to well-established businesses with a proven track record and a reliable stream of customers.
Personal Loan Agreement:
Sometimes when applying for a business loan you may not always be able to secure the sums you need. In order to secure a higher sum and boost the lender’s confidence, you can offer to sign a Personal Agreement. But keep in mind, should your business fail, the lender could pursue you personally in the courts for the missing sums.
Our values are simple – We’re on your side.
At Rangewell, our services are clear and transparent. We support a wide range of SME businesses of every shape and size, for finding every type of finance. Follow us on Twitter and LinkedIn for business tips and tricks, and feel free to call us on 0203 637 2340 if you’d like to chat about what we can do for you.
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