Primarily, whenever the subject of business loans is raised the first, inevitable, solution is the bank. And, in all honesty the bank could well be the easiest, most straight forward option.
So, make your bank the first stop. Arrange an appointment and confidently turn up with your well-researched, sound business plan, and, of course, your absolute 100% belief and enthusiasm.
High Street Banks want to lend money; after all money makes money. However, they’re now pretty thorough and more astute (especially so, since the recent financial crash!).
If your business doesn’t look viable then they probably won’t accept the risk.
However, more than likely, in most circumstance they will be more receptive to lending money if they have some asset of yours, usually a house, that they can hold the rights to in the event of a loan default.
In short, your business fails, they’ll sell your house and take what’s owed out of the proceedings.
Ruthless, but such is the way of finance.
Even more reason to research and plan, and when you’ve done that … do it again! Think positive, think hard and be realistic.
An independent financial advisor
This really is the next sensible option. An independent financial advisor will have access to a number of potential lending sources. Each offering competing interest rates and requirements.
Your advisor will know all the options available, and introduce you to the best of them.
Select a bone fide advisor, with a well-established and credible track record.
Best of all, get a personal recommendation from one of their customers. A well rooted business will not want to sell you a ‘pup’. They’ll want to provide sound, experienced advice that’ll lead to a successful outcome.
Should your independent financial advisor not be able to source the loan, then, I dare to suggest that, your business idea will have difficulty taking flight.
Business Start-up and other supports and grants
Check out what’s available from your government and your local authority. There are schemes set in place to help budding entrepreneurs with that first step, or the next step towards expansion.
Don’t be fooled, the authorities, as lenders, will still employ a strict criteria for assessing you and your business potential.
You may get a handout, or even a preferential interest rate, but, generally, there’s very rarely something for nothing.
- Borrow from, or involve, a friend in your business financing. Friends are not experienced financiers, they don’t understand the risks nor the complications. Friends should stay as friends; don’t lose them.
- Borrow from a web-sourced company that offers the world and interest rates from another universe.
No matter where you choose to source financing always bear in mind, that, lenders are never as altruistic as they may first appear. No doubt, when times get difficult, they’ll try to help, but ultimately, they’ll pursue you relentlessly for their ‘pound of flesh’.
This is where, once again, we come back to a well thought through business plan and realistic expectations. Once you’ve been accepted for a loan, from a bone fide lending source, then … the adventure begins.