Business Owner Loans

Business loans can give companies the necessary extra cash to get in new equipment, stock and cover a variety of expenses. There are a range of loans available on a commercial basis, that can help a business get hold of money easily and quickly, and give you the freedom to use the money to the your best advantage. Paying a loan back can be costly, so it’s important to get a good deal, so the money you borrow can be used to its full potential and repayments are easy to make and afford.Getting additional funding for your business can involve a lot of research, and decision-making, so it’s important to be aware of the different types of loan available commercially. Business loans work much on the same basis as a personal loan – your business borrows the money, and then it is repaid over a period of time usually with a fixed or variable rate of interest added. High street banks and many other lenders can offer good deals on business loans, for a variety of business types and sizes.What type of business loan you might decide to apply for will often be based on the cost of repayments and interest rate. Interest rates are given as an Annual Percentage Rate (APR) that is the equivalent amount of interest you would repay on the total amount of the loan over a period of a year. There are two main types of interest rate to consider when applying for business loan, and although they are both added to the cost of your loan as an APR, the way they work varies significantly. A fixed rate loan will mean you will repay an agreed rate of interest on your loan over a period of time.A variable rate loan will usually be tied to the Bank of England base rate, so if that changes then so will the amount you need to repay. As long as rates stay low, or decrease, you could be in for a good deal on your commercial loan. But if the Bank of England base rate rises, you could end up paying considerably more for your business loan compared to a fixed rate commercial loan. Some lenders can offer a ‘capped’ rate on a variable rate business loan, which means that if the base rate rises beyond a certain level, you have a guarantee that the amount of interest you pay will not go beyond that certain rate.Always read the small print when taking out a business loan, as hidden charges and other conditions could affect the cost and repayments of the loan. This can include extra charges such as a set up fee, late payment charges, penalties for early repayment of the business loan, and other charges the lender may add. Always factor in these potential extra charges when comparing the prices of the different commercial loans available.One of the best ways to compare the different prices and conditions of loans is to use a price comparison web site. In business time often means money, and going from bank to bank in the high street and dealing with the various figures and brochures can be frustrating and time consuming when trying to find a good deal on a commercial loan. A comparison site for business loans can save time and hassle that could otherwise be used more efficiently for your business.

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