Home > Finance > Applying for a Small Business Loan

Applying for a Small Business Loan

By: Rachel Newcombe - Updated: 16 Oct 2012 | comments*Discuss
 
Business Loan Loans Compare Finance

If you’re in need of an extra boost of finance to get your small business off the ground, then applying for a business loan may be the path you need to follow. So how do you go about finding suitable loans and completing the application process?

Various types of business loans are available for small businesses, which can be very handy when you’ve got a great idea and want to launch a business, but haven’t got the initial funding you vitally need. Loans, however, aren’t guaranteed to be available and it can take a while for a decision to be made, so if it’s something you’re going to explore, it’s best not to do so when you’re in an urgent hurry for the money.

Most of the major high street banks offer business loans, but they sometimes differ in how much may be available or what their terms and conditions are. Due to this, it’s a good idea to not jump head first into applying with the first bank you think of, or even with the bank you’ve had other accounts with for years, as there may be a better deal to be had elsewhere. Instead, take time to explore and compare the options available with several banks before you start applying.

Many banks have a team of small business specialists, who’ll be able to offer advice on the financial products and loans available, as well as on other aspects of your business and setting it up.

Whilst banks and building societies are likely to be the first places you think of trying for a loan, there are other organisations worth considering too. For example, specialist business organisations often offer loans for new businesses, with some concentrating solely on businesses based in a certain local area. There are also organisations, like the Prince’s Trust, which cater for young entrepreneurs, or even companies that offer loans for Muslim business owners.

With some of these alternative options, there tend to be set criteria for applications, often with set deadlines for applications to be received, so if it’s the wrong time of year for loans to be made, then you may need to either wait for the next application period or apply elsewhere for a loan. Whatever you do, take care to avoid unauthorised lenders, or loan sharks, as this is definitely not a good way of securing a loan for a business and you may get tangled up in a web of contracts.

Making Your Application

In order to apply for most business loans, you’ll need to carefully submit an application form, which includes several key pieces of information. You’re likely to have to submit a thorough business plan, including why you want to start the business, why you’re a good person to do it and what your experience is, what your projected forecasts are and when you would aim to pay off the loan.

Most banks and other organisations will expect you to also do a formal presentation of your business plan in person. So be prepared for this, make sure you can clearly present the information without being flustered, and be prepared to answer any questions they may have.

If the worst case scenario occurs and you get turned down for a bank loan, don’t despair. A scheme called the Small Firms Loan Guarantee Scheme exists and is designed to help new small businesses that aren’t able to secure a loan.

You might also like...
Share Your Story, Join the Discussion or Seek Advice..
We recommend that you look at the recently launched StartUp Britain website as they have a wide variety of funding ideas and 'offers' for UK start ups. We are working our way through what we can take advantage of as we launch our niche retail business soon. Good luck!
seriously sofas - 3-Apr-11 @ 10:08 AM
Share Your Story, Join the Discussion or Seek Advice...
Title:
(never shown)
Firstname:
(never shown)
Surname:
(never shown)
Email:
(never shown)
Nickname:
(shown)
Comment:
Validate:
Enter word:
Topics
Further Reading...
Our Most Popular...
Add to my Yahoo!
Add to Google
Stumble this
Add to Twitter
Add To Facebook
RSS feed
You should seek independent professional advice before acting upon any information on the StartACraftBusiness website. Please read our Disclaimer.