The term business seems so simple. But, do you know how much efforts are required to start and establish a business. A well-established business showcases the hardship, dedication and capital investment made by an entrepreneur. Are you one of them who want to rule the world and are tired of the orders of your boss? If yes, then it’s great; most of us want the same. But, whenever you evaluate the investment needed, it made you back out from the business plan. No need to despair any long; now you can borrow a secured business loan to secure your business dream.
Business loan come in two main forms - secured business loan and unsecured business loan. Now, you would think why I suggested you secured loan despite of other loan alternatives available. There is a strong reason behind it, I am here to suggest you the best option and that’s what I did. A secured business loan requires a borrower to put collateral against the loan borrowed. Collateral, which a borrower needs to keep, can be in the form of a house, car, savings account or any other property owned by the borrower.
A secured business loan is a package of everything perfect. It offers a loan for a longer term, which can be extended up to 30 years in some cases. A borrower can borrow a secured business loan for a larger amount which can range between £25,000 to £10 million depending on the loan term and credit rating.
A borrower can enjoy the benefit of flexible repayment options offered by secured loan. One can choose a fixed rate loan or a flexible rate loan. A fixed rate loan implies that a borrower has to pay fixed monthly installment. People who are sure that they will be able to pay fixed monthly installment each month, can opt for this option. Flexible loans requires a borrower to pay monthly loan as per their convenience. Borrowers can make overpayment, underpayment and can enjoy payment holiday too.
If you want to start a new business, then you need to present a business plan. Your business plan will help in determining your possibility of getting the loan. Thus, a business plan is needed to be planned thoroughly. Don’t keep any secret; disclose every minute detail to the lender. An ideal business plan contains each and every detail of the business - product, identifying competitors existing in the market; your business strategy, your future plans, financial forecasts and what are the risks involved in the business.
Entrepreneurs who have an established business may need to submit few documents such as a copy of business tax returns, balance sheet, profit and loss statement and other financial statements. These statements will work as evidence that the borrower is making profits or losses and whether the profits are large enough to cover the monthly payments or not. You need to make a business profile giving description of the annual sales, length of time in business and ownership whether a business is in the form of proprietorship, partnership or a private limited company.
Traditional lenders such as banks and financial institutions can be approached for borrowing a secured business loan. It won’t be wrong if I state that twenty first century is an era of technology. Every one wants to become computer savvy. An important contribution of the rapid mounting technology is the invention of internet. Internet has broadened the growth scope of the finance market with the entry of online lenders. Online lenders offer fast online loan with ease. A borrower can access online lenders by browsing loan providing websites. Online lenders give the convenience of borrowing loan. Online application form are available at most of the websites, a borrower needs to fill it. Online lenders approach the loan applicants with the most appropriate loan option.
There is one more area lenders focus on; this is credit status of the borrower. Higher the credit score, more is the possibility of getting a secured business loan at better rates, and that too for a longer term. Poor credit score cannot stop you from getting a secured business loan. You just need to have collateral to put as a security to borrow the loan.
Though, there are various benefits attached with a secured business loan. However, as a coin has two sides same is the case with a secured business loan there is risk involved regarding the repossession of the collateral kept as a security if one fails to repay the loan. There is risk involved in every deal, running a business also involves risk but a wise man knows how to manage the situation and accept the challenge. If you want to make a mark for yourself in the business world then you would definitely accept this challenge and will bear the risk to prove your capability and entrepreneur skills.
Secured Business Loans – Source of funds to Establish Your Own Business
Business Loans – A Source of Finance for your Business
Have you been planning to start a new business but lack of sufficient funds has been stopping you? You need not worry; Business Loans are here to help you realize your dreams.
Business Loans are the loans granted for the use of a business. Business Loan can be used to start a new business, expand the existing business, to buy a new machine or equipment or for any other business related activity.
Business loans be a secured or an unsecured one. Secured Business Loan is a loan that is provided in exchange of property, machines or plants that serves as collateral such as houses, cars, savings accounts or bonds. Secured Business Loan also provides finance for working capital, which can be used to purchase raw material, paying the labour charges etc. Unsecured Business Loan is granted without keeping a property as a security with the lender.
Business Loans can be taken for short, intermediate or for a long term, it depends on you which one do you want to take and for what purpose. Short-term loans are given to businesses that need cash to start operating, this loan is granted for one or less than one year. Intermediate term loan helps businesses to buy equipments and cover initial large expenses, this is granted for a period of one to three years. Long-term loans are used to assist start-up businesses with initial costs and are granted for a period of three to seven years.
Now you would say why only, Business Loan, when other loans are available in the market. Business Loans are tailored specially for people who want funds for their business. Business Loan provides the flexibility to preserve your cash and working capital. Business Loan also helps in managing cash effectively by offering flexible repayment options.
Capital forms an integral part of every business. If you are planning to apply for the Business Loan you need to look into three key issues: -
• Cost – You need to check the cost and risk involved in taking a loan.
• Loan Size – You need to decide the amount of loan you want that would satisfy your need.
• Payback Program – It is very important to decide at the time of taking a loan that how will you repay the loan amount and the monthly installments, otherwise it may create problems for you in future.
You can get a Business Loan from a bank or a financial institution. But shop around and search for as many lenders as you can, you can also look for online lenders. Collect quotes from various lenders and make a comparison among them to get the best deal.
When applying for a loan you need to keep in mind that you must make a loan proposal. Lenders will grant you the loan only if they find your proposal worth because no lender will be interested in taking risk. While writing a loan proposal you should always give industry-specific details so that the lender is able to know in-depth about what business do you want to start or how your present business is run and what market trends affect it.
You should also give details about the existing or proposed business, collateral which you want to keep as a security with the lender, loan repayment plans, personal financial statement and projection of your future operations. The possibility of getting a loan will be higher if you have a good loan proposal and are able to convince the lender about your future business plans.
You can get a secured business Loan if you have CCJs, arrears or bankruptcy. Your bad credit history cannot stop you from getting the cash you needed to invest in your business or to start up your own business.
Business Loan provides funds to businessmen who want to expand their business or people who want to start a business of their own. Success has no limits. Business loan provides you with the funds now it depends on you how use this money to climb the ladder of success.