Start-Up Business Loans – How Soon Will Your Company Be Able to Take One Out?

Posted by Martin Collins on Aug 19, 2019 2:45:08 PM
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Start-Up Business Loans – How Soon Will Your Company Be Able to Take One Out

It doesn't matter how profitable you believe your business concept could eventually be, you'll need funds to get your company off the ground. Many company founders looking for finance iminmediately contact conventional lenders, such as banks, and apply for start-up business loans. However, start-up loans aren't the only funding solutions available for fledgling companies – and sometimes they aren't as suitable for new firms or easy to obtain as you might think.


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When Can You Apply For A Start-Up Business Loan?

The term "start-up business loan" might suggest that you can borrow money to start a company from scratch but that isn't always the case in practice. The terms and conditions of specific products vary, but some providers restrict their start-up loans to companies that have been operating for certain amounts of time or have annual turnovers above specified amounts. Therefore, you may only be able to apply for a particular product if your company has been actively trading for 12 or 18 months, for example, or has an annual turnover of £50,000 or even £75,000.

There are also two types of start-up business loan on the market: secured and unsecured loans. In order to obtain a secured loan, your company will usually need to own its own premises or have other assets. Providers of unsecured loans, meanwhile, will usually ask for a company director to provide a repayment guarantee, so you may need to have significant personal assets in order for your application to be successful.

That doesn't mean that start-up loans can't be useful, however. Once you're in a position to take one out, you can use the funds to boost your business growth, rather than waiting until you've made enough profit to cover the costs involved.

Alternative Funding Solutions For Your New Company

If you aren't in a position to apply for a start-up loan from a bank or building society, there are still plenty of ways in which you can secure funding for your business. There are many alternative providers and a host of lending instruments that could work for you.

If you're planning to purchase business premises, for example, you could consider taking out a commercial mortgage, while if you need to acquire machinery, asset finance might be an appropriate solution. Owners of start-up businesses who want to manage their company's cash flow effectively, meanwhile, may benefit from investigating invoice financing.

Even if you opt for a business loan, it's important to check the rates and terms and conditions that apply to the various products on the market carefully before selecting one. With so many factors to consider, it's advisable to seek expert and impartial advice – and that's where we come in. Contact Business Finance Solutions (UK) Ltd and we can direct you to funding solutions from specialist providers in your industry that will suit your business goals.

Image source: Pixabay

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Topics: Start-up Business, Business Loans

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