Touch Financial
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Starting A Business Loan

The process of starting a business loan can be a daunting prospect. There are a wide range of options available and it’s often not clear which option is right for your business.

The different types of loan available to commercial organisations include:

  • Business overdraft facility.
  • Variable rate loans — the rate of interest changes in line with base rate.
  • Fixed rate loans — the interest rate remains the same over the loan period.
  • Asset finance — paying for new assets in instalments.
  • Commercial mortgage — for buying property.
  • Invoice finance — discounting or factoring.

If you’re relatively inexperienced at borrowing money for your business it can be hard to know which of these ways of starting a business loan is the best choice for your situation.

Considerations When Starting a Business Loan

When you are thinking of starting a business loan there are a number of important questions to ask about your requirements. These include:

  • How much do you need to borrow?
  • How flexible do you want repayment terms to be?
  • Do you want fixed or variable interest rates?
  • Are you willing or able to have the loan secured on property?
  • What will happen if the business cannot repay the loan?

The answers to these questions will help you to determine which type of loan to consider. For example, a bank overdraft facility is very flexible, which helps to keep costs down, but it may require someone to give a personal guarantee to the bank.

Other Flexible Forms of Finance

If it’s important to you to have a flexible, controllable loan that does not need to be secured on assets, you should give serious consideration to invoice finance.

This comes in the shape of invoice discounting or factoring. Both work on a similar principle — you borrow money based on the value of the sales invoices that you raise.

It’s flexible because you can borrow exactly what you need. This helps you control the costs, because you’re only paying for the cash you need.

There’s no security required because all that’s really happening is you are being paid money that’s already owed to you.

Could your business benefit from invoice factoring? Compare quotes instantly online and find out how much you could instantly raise.

Find Out More From Touch Financial

Our team of commercial finance experts has helped thousands of organisations negotiate the maze of commercial finance, saving them time and money.

We work with some of the top lenders, including Lloyds TSB Commercial Finance, and we’re recognised as the UK’s leading online broker in the field of commercial finance.

If you’re thinking of starting a business loan, we can give you a no-obligation quote within hours. Why not make contact with us today?

Compare factoring quotes instantly online >>

Explore Further

Touch Financial Rated 4.9/5 based on 235 customer reviews. See reviews here »

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"Very polite and a professional team of financial advisers who seem to know their business, work well within their industry and get a result."-Invoice Finance Introduction

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