Small Business Finance

Are you looking for a business financing solution that makes sense for your small business?

Small business loans and finance facilities are available for business owners who know how important it is to have the cash flow you need to operate and to grow. Sometimes the cost of investing in your business to grow and develop can be prohibitive when you don't have the required resources.

But instead of reaching for the credit card when cash flow is tight, reach out for a small business loan. Business Loans can help you get back on track without having to break the bank.

Banks and other large financial institutions have saturated the market with a number of business finance products, but there is a lot of businesses that will not fit the criteria of a High Street Bank.

You might have been turned away by these major players due to being self-employed or a sole trader, or you are looking to start a business that falls outside of their eligibility criteria- no matter what your reason is, there can be a solution.

If you have experienced challenges in obtaining cash through traditional means there are a number of alternative lending options available to cover costs such as purchasing inventory, marketing and equipment purchases.

Choosing the right option for your business can be tricky, especially if you aren't sure where to apply. RLA Capital have a range of options for your business to choose from, whether that's an unsecured loan or funding against your outstanding invoices.

Here are some things to consider when deciding which funding option is right for you:

What types of small business finance is available?

Small business loans can come in many different shapes and sizes, but all have one thing in common: they're designed to help you get the financing you need for your business.

The best loan for you will depend on your business needs, including how much money you need, how quickly and what the funds are needed for. There are a whole host of loan types which may be suitable for your requirements.

There are a few key features to consider when deciding which small business loan is right for you:

  1. How long before the loan is repaid?
  2. How much will it cost?
  3. Can you afford the repayments?
  4. What are the funds for?

To make it easier for you, here are some of the most popular types of business loan available in the market.

Government Funding and Grants

When you're looking for support to start, grow or expand your business, a grant is can be a good option.

There are a range of grants available, depending on what your business needs, where you're based and what you need the money for. Many are time limited so, it's important to keep checking and apply as soon as funding opens up.

Start up Loans

There are numerous options available to start up businesses in the UK, with some of the most popular being business grants, angel investment, crowdfunding and venture capital.

However, it's important to understand that these options aren't always easy to obtain or even suitable for all businesses.

Vat and Tax Loans

Businesses often experience seasonal fluctuations, which means cash flow is sometimes tight. The problem with VAT and Tax bills is that they're quarterly or yearly, but your income might not be evenly spread throughout the year.

This means that you may need to pay out a large amount at certain times of the year, when you might not have enough cash in the bank to cover it. Instead of trying to build up funds during quieter periods, or missing payments, taking out funding can help you spread the cost over manageable monthly repayments.

You'll also avoid being charged late payment penalties by HMRC if you've struggling to meet your VAT or Tax obligations on time.

Unsecured Business Loans

Unsecured loans are not secured against personal or business assets. This type of finance is a great way to increase cash flow without using company assets as collateral. Unsecured loans sometimes need to be supported by personal guarantees from the business directors/owners.

Unsecured loans are usually available over terms from 3 months to 5 years depending on the purpose of the business loan.

With unsecured loan applications, lenders focus their underwriting decisions based on personal business credit ratings, business bank accounts and business accounts to calculate your eligibility and borrowing amounts.

Secured Business Loans

Secured loans are secured against company assets such as vehicles, equipment, or property. Property can be business owned or secured against residential properties in certain circumstances.

Secured borrowing amounts are restricted to the amount of equity available in the asset and how much equity you can "release" depends on the asset type.

Most secured loans are secured against property and are available up to 75% loan to value (LTV). LTV is the amount of equity you can access for the loan.

This is just a small selection of business loans available on the market. There are a whole host of other loan types which may be suitable for what you need. The best type of loan will depend on what you need the cash for, for how long and your business type.

Are You Eligible For A Small Business Loan?

Your eligibility for a small business loan will depend on several factors. Whether you want to borrow £10,000 or £500,000, the lender will want to know about your business finances, as well as your credit history.

It can be a good idea to do some research into what lenders look for before applying for finance. This way you can be sure that your application is up to scratch and increase your chances of being accepted.

What do lenders consider when assessing my eligibility?

They need to be confident that you'll meet your repayments and pay off the loan on time. When assessing an application, lenders take into account:

  • What is your credit score?
  • How long have you been trading?
  • What are your payment terms?
  • Does your industry pose any risks?
  • What is your cash flow like?
  • Have you had loans before?
  • What is your existing debt level?
  • Have you ever been declared bankrupt before?
  • Do you have any late payments on credit cards or loans?
  • Are there any CCJs against your name or company?
  • If your business is incorporated does its directors have any CCJs against their names that affect their credit history and could jeopardise the application being approved?
  • You pass affordability checks
  • What the funds are for.

There are several different options for business financing, each tailored to the specific needs of your business and situation.

Make sure you take a realistic look at your company's financial position before deciding which option is right for your company and be sure to keep in mind any applicable deadlines while completing the application process.

Having access to the capital needed to get things going can make all the difference as you reach toward your business goals.

If you're looking for business loans that are tailored to suit your needs, then we can help.

Hassle free business loans are what we specialise in. Plus, our application process is quick and efficient. You could have the funds you need for your business in as little as 48 hours if approved.

We want to make it easier for businesses to access the cash they need, so we offer a range of flexible loan types that can be tailored to your unique requirements.

Updated: August 15, 2022