When it comes to choosing a business loan provider. The UK has several different options available to small businesses. This includes standard loans and invoice finance options. In this article. We look at HSBC. Funding Xchange. Funding Circle. And Alternative lenders. The best option for your business will depend on your business’s needs and purpose.
HSBC has been under fire for misrepresenting 204 Scottish sees when they told them they needed business current accounts to qualify for business loans. The bank attributed the mistaken policy to an oversight and later admitted it had acted inappropriately. Despite the CMA’s criticism. HSBC was forced to issue refunds to affected customers and implement a new process.
For business owners who don’t need a business current account. HSBC offers flexible business loans. Depending on your circumstances. You can choose a term of between one and ten years. You can also choose to repay the loan in monthly. Quarterly or six-monthly installments. Whether you need a small business loan for one year or ten. HSBC can help you finance your business needs.
Funding Xchange is a business loan marketplace. Where you can apply for a loan from a variety of lenders. Using one application. It offers a wide range of business loan products such as unsecured business loans. Secured business loans. And invoice finance. The process is quick and secure and will not affect your credit rating.
Funding Xchange is free to use and works with businesses of any size. It has more than 80 funding options to choose from. You can compare their terms and rates. And you don’t have to worry about damaging your business credit score. Furthermore. You’ll never pay more than you would with a direct lender. The finance providers only charge a commission when a loan is agreed.
Funding Circle business loans are a great way to get quick. Easy financing for your business. The application process is quick and easy to complete online. All you need to do is fill out a brief application that asks for basic information about your business. The owners. And what type of finance you’re looking for. The application should take about six minutes to complete. Later. You’ll need to provide more financial information and an overview of your business’s assets. You can also choose whether you want to share this information with their lending partners. The application process is free and requires no credit check or application fee.
Funding Circle business loans are secured. Meaning the lender will place a lien on your business assets. Including inventory. Equipment. Vehicles. And accounts receivable. This type of loan is best for businesses with excellent to fair credit and an ongoing cash flow. The repayment terms are flexible. With interest rates ranging from 1.9% to 8%. And the loan can used for up to two years.
Alternative lenders for business loans in the UK offer an alternative route for funding your small business. They can approve your loan almost immediately and have minimal restrictions on how you can use the money. However. These lenders often charge higher interest rates than banks. Therefore. You should read the small print before you commit to one.
Alternative lenders for business loans are different from high street banks. But they do offer a wide range of innovative financial products. Unlike high street banks. Alternative business funding providers offer a broader selection of business finance products. Including unsecured business loans. Commercial mortgages. And private equity.
Government-backed business loans are a type of commercial loan. But the funds that they provide are backed by the UK government. These loans can be obtained by existing businesses that can demonstrate they are solvent and have a clean financial record. They are often unsecured. But the government will require security in some cases.
The Recovery Loan Scheme is managed by the British Business Bank and is designed to improve the terms and conditions offered to borrowers. Borrowers can borrow up to PS2 million. Or PS1 million in Northern Ireland. Under the scheme. The size of facilities varies. With terms ranging from PS1.000 for asset finance to PS25.001 for term loans.
Government-backed start-up loans can very useful for small businesses. Typically. The government will fund start-up loans of PS500 to PS25.000 for a term of up to five years. Start-up loans can also use to finance building projects. The Home Building Fund. For example. Provides loans for small builders of up to PS250 million. Similar schemes exist throughout the UK. In some areas. There may also government-backed redevelopment loans available. These loans are normally for five years. With a fixed interest rate.