Alternatives to a short-term business loan

There are many forms of business finance available. Each has developed to meet a different need. Here are some of the alternatives to a short-term loan:
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• Invoice finance or factoring
• Asset finance
• Line of credit
• Overdraft
• Business credit card
• Long-term business loan
• Commercial mortgage
  

It’s important that you choose the most appropriate form of finance for your business needs. Selecting the wrong method can prove unnecessarily expensive, and could make it more difficult to access other forms of borrowing.

Disadvantages of short-term business loans

While they can be massively useful in certain situations, short-term business loans are not always the best solution to raising working capital.

These disadvantages can include:

• Higher rates of interest, compared to longer-term loans.
• Early repayment fees may be charged if the loan is repaid early.
• Becoming dependent on borrowing, with a succession of short-term loans.

It pays to speak with a professional advisor before taking on any form of loan, to help you decide whether you’re making the best choice.

Eligibility for a short-term business loan

Each lender has their own method of determining whether they will lend to your business. They want to be confident that your business is genuine and that it's profitable.

The criteria typically include:

• UK registered business, usually a limited company.
• Turnover of at least £100,000.
• Accounts on file for at least one year. 

Some finance providers are open to approaches from businesses with a poor credit history. 

If your business is in the start-up phase, with low or no turnover and no accounts on file, you may still be considered for a short-term loan. 

We help businesses secure short-term loans

We take a lot of calls from businesses looking for short-term business loans. Some need funds urgently, to cover a shortfall in their cashflow. Others have identified that a short-term loan is the right choice in their situation.

Our role, as a finance broker, is to match your business with the most suitable finance provider. We work with a panel of over 250 lenders, meaning we have access to products applicable to almost any situation.

The approach we take is to remain with you throughout the loan application process, from initial enquiry through to receiving the funds in your account. One of our team of experts will work with you, keeping you informed of progress at all times.

If you think a short-term business loan would be right for your business, get in touch with us today.

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