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  • Loans from £1000 to £20M

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Types of business finance available

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Bridging Loans
Start Up Loans
Unsecured Loans
Commercial Mortgages
Asset Finance
Merchant Cash Advance
Growth Guarantee Scheme
Small Business Loans
Invoice Finance

How it works with Simply Business Loans

At Simply Business Loans we have partnered with Funding Options to bring you access to over 120+ lenders. Funding Options provides you with one simple application process that delivers uniquely tailored loan solutions for your business. Their technology, Funding Cloud, will accurately validate your business profile, matching you to the industry’s largest lender network.

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Finding the Best Business Loans for Small Businesses and SMEs in the UK

The best business loan for your UK small business or SME will depend on your specific needs and goals. This guide will help you understand the different types of business loans available and how to choose the right one for you.

Types of Business Loans

Term Loans: A lump sum is borrowed upfront and repaid over a fixed term with interest. They’re best for established businesses looking to finance large purchases, expand operations, or refinance existing debt and offer predictable monthly repayments. However, they often require good credit and a solid business plan.

Business Lines of Credit: Offer flexible access to funds up to a pre-agreed limit, functioning like an overdraft. They’re best for businesses that need a safety net to manage cash flow or cover short-term expenses. Interest is only paid on the drawn amount, but credit limits may vary based on business creditworthiness.

Invoice Financing: Unlocks cash tied up in unpaid invoices by selling them to a lender at a discount. It’s best for businesses with cash flow challenges due to delayed invoice payments and helps improve cash flow without adding debt, but fees can be high.

Merchant Cash Advances: An advance based on future credit and debit card sales. They’re best for businesses with fluctuating revenue, such as retail or hospitality. Repayments are a fixed percentage of daily card sales, which can be helpful during slow periods, but interest rates tend to be high.

Asset Financing: Loans secured against company assets like equipment or vehicles. They’re best for businesses needing to purchase expensive equipment or unlock capital from existing assets. The asset serves as collateral, reducing the lender’s risk, but repossession is possible if repayments are missed.

Government-Backed Loans: Includes the British Business Bank’s Start-Up Loans and Recovery Loan Scheme. They’re best for start-ups or SMEs needing competitive rates and favourable terms but require a stringent application process and may need personal guarantees.

Peer-to-Peer (P2P) Lending: Borrowing directly from individual investors through online platforms. They’re best for businesses seeking flexible terms and rates compared to traditional lenders. Although often regulated by the FCA, default risks are borne by the lender.

Choosing the Right Loan

Assess Your Business Needs: Define the purpose of the loan (e.g. expansion, equipment purchase, working capital) and determine how much you need to borrow and how long you’ll need to repay it.

Consider Your Financial Health: Check your business credit score and trading history and ensure you can meet the loan’s repayment terms without straining your cash flow.

Compare Interest Rates and Fees: Look at the Annual Percentage Rate (APR) to understand the total cost and be aware of hidden fees, including early repayment penalties.

Check Eligibility Requirements: Different lenders have varying criteria for credit scores, turnover, and business age.

Understand Security and Guarantees: Some loans require personal guarantees or collateral, so ensure you’re comfortable with the risk.

Seek Professional Advice: Consult with financial advisors or business mentors to identify the best options.

One Size Does Not fit All

There’s no one-size-fits-all solution for business loans. Take time to assess your goals, evaluate loan options, and seek professional advice. By understanding the unique benefits and challenges of each loan type, you’ll be well-equipped to make the right choice for your business.

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