Most businesses will need additional funding from time to time, whether it’s money needed to cover start up costs, cash to see the business through tough times or funds needed to expand.
It is normal however to be apprehensive about borrowing to fund your business, and it’s certainly not a decision to be taken lightly.
If you’ve decided that a business loan is necessary then it’s well worth taking some time to ensure that you understand the commitment fully, and are aware of all your options.
Head to the High Street
For many, the local high street banks are a good first port of call – particularly a financial institution that you already hold an account with, be it personal or business. But don’t be afraid to shop around in order to get your required credit as cheaply as possible. Small differences in APR can add up to a considerable amount over a five or ten year term, so don’t discount other banks out of a sense of loyalty.
As well as big name banks, many supermarkets such as Sainsbury’s are now well-respected finance providers that regularly top the best buy charts such as money supermarket and money.co.uk.
You’ll have to decide whether a fixed or variable rate loan will suit your circumstances best – and there are pros and cons to both. Fixed rate loans are great for those who prefer to be able to predict their repayments – perhaps businesses on a strict budget. While a cheap variable rate may seem appealing while interest rates are low, it’s important to weigh up the possibility of the Bank of England increasing their base rate during the term of your loan.
It’s certainly worthwhile comparing the rates and deals offered on personal and business loans from different providers, in order to find the best loan for you. Once your business finance is in place, make sure that you use your cash flow wisely on the best value business supplies from Office AllSorts. Keeping overheads and outgoings low will increase your profit and subsequently increase the chances of your business venture being an exciting success.