It's important to be aware of your credit scores - both your own and that of your business. Your credit score will be taken into account during the evaluation of your loan application. The number of applications you make could also impact your credit score.
A low credit score will make it harder to get a loan. However, some lenders are open to providing finance to small businesses with lower credit scores. The higher risk is likely to be reflected in the interest rate charge on the amount borrowed, but that could be a price worth paying if it allows you to borrow the money you need.
Are you B2B or B2C?
Some small business loans are better suited to firms that sell on credit to other businesses, while others are designed for those who sell directly to consumers for immediate payment. Some who sell business to business (B2B) may do so on credit terms of 30, 60 or even 90 days. Invoice finance or factoring is one example of a small business loan product that effectively eliminates the weeks or even months of waiting to be paid, and by doing so, it makes cashflow planning much easier.
What industry are you in?
Many lenders will only serve specific industries. The benefit of this is that they have a deeper understanding of how businesses operate in those industries and, therefore, they have a better appreciation of risk in those sectors. Your small business may be able to get a more favourable loan from a provider who specialises in your industry.
Can you offer security for the loan?
An unsecured business loan may well cost more than one which is secured on an asset. You're also more likely to be able to borrow more if you can secure the finance against an asset.
A secured loan gives the lender somewhere to go should your business run into insolvency problems, or be unable to pay its debts for some other reason. By offering up an asset, such as buildings or equipment, as security for a loan, you're giving them a route to still getting at least some of their money back.
Many loans, even unsecured loans, require company directors to provide a personal guarantee.
We help owners find the best small business loans
When you speak with one of our team, you're talking to a business finance expert with extensive experience in helping firms like yours.
Many of our clients are business owners looking for working capital for business growth. They're seeking to expand their teams, grow their turnover and take a larger slice of overall market share.
We help them to find the funding they need so that they succeed in turning their ambitions into reality.
Our clients are drawn from a wide range of industries. Because we work with a panel of over 250 lenders who between them offer a wide range of funding options across many sectors, we help them find the solution that's cost effective, and appropriate to their needs.
Let us help you find the best small business loan for you. Get in touch with us today.
As a founder of multiple businesses, Jamie believes that mindset, discipline and ambition are key drivers for success, both for his businesses and for his clients.
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The first steps towards the funding your business deserves
Disclaimer: JD Capital Finance (Registered office -First Floor, Steeple House, Church Lane, Chelmsford, England, CM1 1NH, Registered Number 10128297) helps UK firms access business finance, working directly with businesses and their trusted advisors. We are a credit broker and do not provide loans ourselves. All finance and quotes are subject to status and income. Applicants must be aged 18 and over and terms and conditions apply. Guarantees and Indemnities may be required. JD Capital Finance can introduce applicants to a number of providers based on the applicants’ circumstances and creditworthiness. JD Capital Finance may receive a commission or finder’s fee for effecting such introductions.