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Can You Get Business Loan For New Companies In UK?

If you’re considering launching a new firm, good news for you. You no longer need to go to your business bank for financing. In addition to the traditional high street institutions, there are many newer, more flexible lenders like us available today. We are able to meet your company financing needs more effectively. There are numerous subcategories for business loans. However, the sort of financing you choose will depend on the circumstances of your business. It also depends upon the purpose of the finances. Additionally, you could, for instance, choose a startup loan to jumpstart your new business. You could choose short-term financing to address cash flow concerns, and even a longer-term solution for supporting expansion.

There are financial institutions like ours that specialize in locating new company financing. Also, some may not require a minimum turnover. You do not necessarily need to have been in business for a greater period of time to qualify.

Business financing can give you the financial flexibility you need to:
  • Hire Employees
  • Acquire equipment/machinery
  • Office set-up & Relocation
  • Buy Additional Stock
  • Pay for essential company services

The majority of new business loans have a fix interest rate, so repayments are typically consistent. However, variable interest rates are subject to change.

Despite the fact that many new company loans that do not require collateral also require a personal guarantee, there are lenders who offer funding options that do not require either. Unsecured loans offer a broader range of enterprises and applications, although they are typically short-term and carry higher rates of interest.

Depending on the amount of business financing you need and the circumstances of your company, you may be eligible for a business loan ranging from £1,000 to £15,000,000+. The amount you can borrow depends on the lender, and also you should only obtain a business loan if you have a good repayment strategy (plus interest).

Compared: Secure versus Unsecured business financing

A secured business loan is collateralized by property, vehicles, or equipment. Further, this offers the lender with greater assurance, so they can seize the asset from the business borrower if the loan is not returned.

Unsecured loans do not require collateral, however some lenders want a personal guarantee (“director’s guarantee”). If the loan is not repaid, the lender can seize the director’s assets, hence this sort of loan carries a greater personal risk.

Typically, larger sums of money may be secured, whilst smaller sums may be unsecured, and it is customary for unsecured loans to have higher interest rates.

How to obtain a new business loan?

Before beginning your search for the most suitable business loan, you should examine the following:

  • Capital Requirements 
  • Finance Usage
  • Payback Tenure
  • Interest Rates
  • Secure/Unsecured Loan

The amount you can borrow is depending on what the lender believes your company can afford, and a credit check can occur. Your credit score will also influence the possible interest rates, which will have an impact on the amount you repay. Alpha Funding helps you calculate that exact sum.

Before we get into the nitty-gritty, let’s take a look at some of the most common new business financing options available today.

Business Cash Advance

With this sort of financing, you obtain a cash advance depending on your merchant account that deposits the credit card sales.

Invoice finance

The lender advances the value of your bills for a charge, allowing you to free up cash flow without having to wait for payment.

Bridging loan

A bridging loan is a sort of short-term business financing meant to get you from point A to point B by “bridging the gap” in your company’s finances while you acquire long-term financing.

Business Credit Card

Credit cards for your business provide access to financing while assisting in the improvement of your business’ credit score (as long as you make payments on time).

Application Procedure For A New Company Business Loan

To apply for a new business loan, you can approach us directly on the website or email or phone. Use Alpha Funding platform to get access to over 120 lenders and pick the one that best suits your needs. It is free, will not affect your credit score, and we will assist you throughout the application process.

If a loan is “secured,” an asset such as real estate is utilized as collateral. It means that the lender can seize the asset in place of payment if the borrower defaults on the loan. As the lender’s risk decreases, interest rates typically decrease.

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