Business Loans
Choose the right Loan Option for your Business
Loans
A loan is money borrowed for a set period and with an agreed repayment schedule. The repayment amount will depend on the loan size and the rate and type of interest.
Loans are most suitable for funding fixed (tangible) assets, such as hardware, office equipment etc, this is because the amount of money you need is very unlikely to change. Fixed term loans are not suitable for using to cover running costs, as your financial need will fluctuate and you could end up paying for money that you did not need to borrow.
Advantages
- You know what the repayments are and how long they will last, therefore you can budget accordingly.
- Loans are generally cheaper than overdrafts.
- Unlike overdrafts, they are not repayable on demand - you know exactly where you stand.
Disadvantages
- Loans require a regular good cash flow to maintain interest and capital repayments.
- Loans are usually secured against business assets. If you fail to meet the payments, the lender can put your business into receivership (close it down).
- In some cases they are secured against your personal possessions, including your home - in an extreme case you could be forced to sell your home to repay the loan, or be declared bankrupt.
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To find out more about getting a business loan feel free to browse and compare the loan providers below: