If you are in need of some additional funding to kick start your business, or need to raise funds for a marketing campaign, then we hope that this article is useful to answering some of your questions.
Getting a business loan:
What do you want to achieve and how much do you require to do so?
When you start looking for the right business funding there are a few questions that you should ask yourself first...
You should think about what you want achieve and how much money you will require in doing so, most of which, should of course already be outlined in your business plan. Generally, the more you wish to borrow, the more difficult it will be to find a lender. You should aim to borrow the borrow the minimum amount, as you are then more likely to get approved for a business loan
How long do you intend to borrow for?
The longer you may take to pay a lone back the lower your monthly amounts might be but overall, this arrangement could end up costing you more in the long run due to interest and admin charges. Check rates and use free online calculators to workout what you can afford and what’s best for you. Remember if you are borrowing for your business as a sole trader essentially you are personally committing liability over that debt and if your business struggles or goes bust, you will still have to keep up any outstanding payments or risk loosing your personal possessions if it ever came to that.
How urgently do you require the finance?
Make sure you check the terms and conditions before committing to any business loan. As there may be delays that could have otherwise been avoided, especially if you need the money urgently. It is wise not to commit to any orders until you have the money that you require at your disposal.
Are you prepared to offer security in exchange for finance?
You can take both an unsecure and a secure loan. A secured loan is where an asset such as a property or expensive jewelry is used as security for the lender, so that if you ever failed to pay back your debt, they can recoup their losses through sale of your asset to make back their money. This is why it is much easier to get a secured loan rather then an unsecured loan, so you should carefully think about this before you make a decision.
What other types of funding is available?
There are lots of things to think about when considering funding, other then taking a loan you might feel that seeking an investor or a business angel is right for you. Be prepared to give away some of your company’s equity if you decide to go down this route. Overall it is best to seek financial advice first. We recommend speaking to Financial Training http://www.funancialtraining.com for further options on funding for your business. 'Funancial Training' also offer financial online business courses and workshops for you to become more financially savvy and enabling you to use this knowledge to further your success in business.