Business Bank Loans

Bank Loans are a likely option when it comes to business finance. Initially, this involves approaching a bank, most of which have small business divisions, to speak to a business manager about a loan. Although this would appear to be the natural option for many, it is very difficult in today’s climate particularly, to get banks to lend to start-up businesses unless it has sufficient collateral. A small business also has to show a strong business plan and water tight revenue projections, that it has the foundation to repay the bank loan.

Business bank loans are typically capped at a certain level around £25,000 and also subject to minimum loan amounts. Repayment terms can vary between 12 months and 10 years.  Unfortunately, banks are naturally risk averse and will not always have an eye for the business potential ahead of the financial risk to their balance sheet.

An alternative to bank loans is to consider equity financing by finding an Angel Investor. Angel Investors are high net worth or sophisticated investors who often invest in businesses or business ideas providing business finance and sometimes relevant business experience, in return for an equity share of the company.

 

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