Save money on your business borrowings
Finding the right loan for your business can be tricky. In the past, identifying the best business loan rate has meant spending hours submitting multiple applications across a huge range of lenders.
With our new business loan comparison tool, you can save time and money by finding the right product for you instantly.
We want SMEs in the UK to thrive and we’re proud to make the process of borrowing money at rock bottom rates simple.
Realistic drawdown schedule
On top of borrowing at the lowest possible rates, we know that businesses sometimes need to raise money quickly. With this in mind, we have added a realistic completion timescale to the comparison. This means you can weigh up both the cost and the time taken to complete the loan.
This is a guide to how quickly we feel the application can be completed based on our experience, meaning you can be sure your application will complete on time. We aim to be realistic from the start.
The completion timescale may differ from the estimate, but our goal is to always get your funds as quickly as possible.
If you apply online for the product of your choice and the application is declined, we will find the next best loan for you.
This means we can switch your application to a new lender without having to ask you for all your information again.
If we feel your application isn’t going to be acceptable, one of our expert advisers will discuss this with you upfront. This ensures you don’t waste time with applications that are unlikely to succeed.
Types of business loan
There are three main types of business loan, although the first two work in very similar ways. They are:
Unsecured business loans – these loans are offered with no security, or collateral taken by the lender. As no security is offered or taken, the amount available and rate charged can vary greatly depending on the creditworthiness of your business.
Peer to peer loans – these loans are often also unsecured and like unsecured business loans the rate and maximum loan varies depending on your business creditworthiness. The main difference is that rather than being offered by a bank or financial institution, they are issued using online peer to peer platforms, with the funds lent by individuals using a crowdfunding approach.
Secured business loans – these loans are secured against property or assets, meaning those items could be placed at risk in the event of default. As security is taken, criteria is often more relaxed, meaning higher loans and less reliance on credit history. Often, lower rates can be offered for secured business loans.
Compare business loans
When comparing your business loan options, it’s important that you consider the total cost of borrowing. People will often be attracted by the lowest rate, but this isn’t always the best way to go.
We have provided our business loan comparison to enable you to understand the options available and completion timescales.
There are a lot of products available, all designed to provide you with working capital. Before taking out a business loan, it’s worth considering not only the different different business loans but also other types of finance.
Depending on your circumstances, it may be worth considering invoice finance, asset finance, merchant cash advances and revolving credit.
Different products offer varying levels of security to the lender and as such, the amount you can borrow will also differ.
Comparing the total cost of finance
In addition to comparing the different business finance products, it’s important that you consider any other costs. Some lenders charge an arrangement fee, whereas others don’t. This will affect the total cost of finance.
Monthly Payments vs. Total Interest Paid
There is a compromise between affordable monthly payments and the total cost of credit. When choosing the term of your loan, both are important. As the term of the loan increases, the monthly payment usually reduces, but the total cost of the loan increases. This is illustrated in the below table:
As you can see, increasing the term of the loan can have a significant impact on not only the monthly repayment but also, the total cost.
Factoring in The Cost of Arrangement Fees
When comparing products between different lenders, always consider the affect of lender or broker arrangement fees.
Many lenders charge arrangement fees, which can be added to the loan in most cases. Where these fees are added to the loan, the additional cost of interest charged on it must also be factored in.
Comparing business loans with other forms of business finance
In addition to business loans, we can offer various types of business finance, including invoice finance, asset finance, business revolving credit facilities and business cash advances.
Across the different product types, we can accommodate applications for funding with no maximum loan size.
Comparing Secured & unsecured Business Loans
Secured business loans are so called as they are secured by way of a legal charge, usually against a property. Unsecured loans are not backed by an asset or property, although the lender will often require a personal guarantee from the directors of the business.
You may find it easier to be approved for a secured business loan due to the increased security enjoyed by the lender. This security comes from the fact that the lender can repossess your property if you fail to keep up repayments.
Where you are able to borrow either using secured or unsecured borrowing, the decision on which way to go is an important one. Although you may be able to enjoy lower interest rates using secured finance, you must factor in the increased risk taken and balance whether this works for you personally.
Can you help me if I’m unsure which product is best for me?
We work hard for our clients and pride ourselves on making the process easy. With this in mind, we are happy to discuss your circumstances and help you to select the best product for you.
Whichever route you choose, we won’t charge you a broker fee for arranging your application – saving you money.