Small Business Loans: Pros and Cons [Explained]by Emily Hilscher Financial Broker
Cash insufficiency can become a hurdle in your path to attaining entrepreneurial success. People who run their own business often witness such problems where due to lack of funds they missed several opportunities. Under such critical circumstances, an individual’s first option is to approach a bank for some help. However, there are many pre-requisites that one needs to fulfil for a bank loan and sometimes, the application for a loan is rejected as well. To fill this gap, many lenders in the UK offer Small Business Loans - which are taken by business owners to continue operating their business smoothly. These loans are widely popular and easy to avail.
In this article, we will discuss:
· Cons of business loan
· How to avail a business loan in the UK
Pros of Business Loan
Accessible and Convenient
As these loans are unsecured, the borrower doesn’t have to provide anything as collateral. Also, there is no need for the borrower to find a guarantor to vouch for them. The loans are quite easy to access and most of them lenders in the UK offer an instant decision of the application form.
Variety of Choices
There is a wide variety of options available online – if you need Small Cash Loans. The lenders offer various kinds of personal loans to suit your situation and requirements – such as – wedding loans, debt consolidation loans, payday loans, self-employed loans, etc. One may choose according to their necessity.
Easy Application Process
Unlike bank loans, these loans are relatively easier to apply. It only takes a few minutes to apply for a personal loan online. The basis on the information provided by you in the application form, the lenders will conduct verification and they will also assess your loan eligibility before making their decision. All these take a few minutes – and the decision is displayed on the screen.
Cons of Business Loan
High Rate of Interest
As these loans are unsecured, there are chances that a borrower may default on the repayments. Also, no collateral is involved and hence, the risk for the lender is on a higher side. That is the reason, these loans come with a hefty price tag. However, if you have a good credit record, you may find offers with affordable rates of interest. Yes, which also means, even if you have a bad credit score, you may apply for an unsecured loan.
Generally, these loans have to be paid back within a period of a year or less. The timeframe depends on the agreement. So, make sure you evaluate how much time it will take to repay the whole amount as if you fail to make the repayments on time – your credit score may be sternly damaged. However, these loans can be useful to people who are looking for short-term financial help and not a long-term one.
A flourishing business needs a constant and steady flow of money to maintain the growth of it. If you face any cash insufficiency in between, it may result in loss of revenue. For any small needs of your business, you may easily apply for a personal loan – which is easy to avail. In addition to that, the cost of repayment can be spread over 12 months that will give you enough time and space to manage your regular expenses with the repayments.
Loan Broker is an FCA (Financial Conduct Authority) registered credit
broker that operates across the major cities of the United Kingdom. To apply
for a small business loan with us, click here.
Borrow wisely, repay timely!
Created on Jul 2nd 2019 03:42. Viewed 521 times.