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How to get a loan to start a small business

Published on 6th August 2018 - Last update on 30th October 2018

You have a vision, a detailed business plan and a great team. All you need now are the funds. But, how do you get them? Unfortunately, this is a stumbling block that many developing small businesses run into. However, making sure that you have the means to achieve a reliable rate of growth and remain sustainable is crucial. If you’re to succeed, earn a loyal customer based and outshine your competitors, you must find a way to overcome this obstacle. But rather than turning inwards, exploring what funding opportunities are available could provide you with the funds necessary for overcoming the odds. So if you’re interested in becoming your own boss and reaping the benefits, here’s how you could get a loan to start a small business.

What exactly are you hoping to achieve?

During the early stages of your business’ development, you’re bound to have all sorts of ideas. However, to get the ball moving, you need to identify what they are and list them in order of priority. In the beginning, your sole concern will be establishing effective day-to-day operations, acquiring essential skill sets and establishing efficient data handling procedures. This could involve anything from acquiring equipment, providing access to training opportunities, installing management software and creating a website to hiring experienced new staff in senior positions. But without the necessary support, achieving them can prove very difficult. Yet by understanding and acknowledging your priorities, you can begin narrowing down your search towards a specific type of funding.

Do you have a bold vision for a new business in your area? Need help raising the necessary funds? Apply for a Small Business Loan or learn more about how your business could benefit.

Are you able to present collateral?

Depending on the type of product you’re thinking of applying for, you may need to provide collateral as part of the application process. This usually involves presenting unencumbered assets such as equipment, machinery, vehicles, property or even capital as security. Although the act of presenting collateral gives lenders more confidence and may earn you a more favourable interest rate, it does, in fact, mean putting assets at risk of repossession should your business default on the repayments. Therefore, if you’re a homeowner, for example, you need to think carefully before using it as security for an agreement. However, if you’re not a homeowner and don’t currently own any valuable assets, there are still plenty of Unsecured solutions available. Just remember that using such products may require you to pay a higher interest rate (compared with a Secured product).

How does your business trade?

Another factor to consider is how your business does most of its trading. As well as cash, does your business issue business-to-business (B2B) invoices or are you able to accept card-based payments (credit or debit cards)? This is an important aspect to consider since some products are closely tied to how your business trades, which may even be a deciding factor in terms of how much you’re able to borrow. So by carefully analysing your operations and cash flow forecasts, you can narrow down your search towards a more specific product that will enhance your ability to achieve your goals.

What Small Business Loans are available?

As a small business owner, you may not be aware of what finance solutions are available to you. However, with the Alternative Finance industry continuing to expand and present new opportunities, there’s never been a better time to grow and establish a small business in the heart of your local community. Just some of the products on offer include Secured Business Loans, Merchant Cash Advance, Overdraft Replacement and Invoice Discounting. But in order to make an informed decision and gain the funds you need to achieve your vision, speaking with an experienced business finance professional could prove invaluable, and may save you money in the long-run.

Are you looking to start a small business?

You can have a truly ambitious vision for your business and a detailed business plan to back it up, but without the necessary funds, you’re unlikely to get anywhere. So, in order to move your business forward and establish a tangible presence in your chosen sector before somebody else does, exploring what funding opportunities you might be eligible for could prove key. However, with some many products and lenders to choose from, how can you be certain that you’re signing an agreement that’s truly appropriate for your business?

At Rangewell, we’re an Access to Finance specialist and have mapped over 400 lenders to offer you an overview of more than 23,000 business finance products. Our services are free to use and we’ll also guide you through the application process. So if you’re looking to raise funds for your business, apply for Small Business Finance today or find out more with Rangewell.


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David Harrison

David Harrison

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