Applying For A Start Up Business Loan

So, you have decided to start up a new business. You have chosen the type of business that you want to pursue and have locked in a business name. You may have even already chosen your business formation type and registered your business with Companies House. Now you have to think about financing. If you have chosen to apply for a start up business loan, you are among thousands of other new business owners who have done the same thing. Before you apply for that loan however, there are a few things that you will want to consider.

If you have chosen a lending company and checked to ensure that you are eligible for a start up loan, you must now complete an expression of interest form. This is simply a form that tells your chosen lending company a few key facts about you and your business. You will need to provide basic information such as your name and contact details, as well as the type of business that you are starting and your legal entity.

You should understand that some loan companies work with delivery partner organizations. The lending company acts as a broker and sends your information on to other lenders throughout the UK. These lenders will look at your information and determine if your business type and your personal details meet their own requirements for lending. This can be a long and tedious process and you may sometimes have to submit your information to more than one company in order to get a loan at favorable terms.
Lending companies will make a loan decision and will mentor you throughout the process. If you have chosen to work outside of the normal realm of lending however, you do have other options. There are government programs and other resources that are available to you and these should be checked thoroughly before you decide on where your start up funding will come from.

Some small business owners choose to enlist family and friends in their business opportunities. These personal loans can offer benefits for both parties. You get the money that you need to start your business and in return, you can dedicate a portion of your profit to paying back the loan, often with a small interest rate to thank your lenders for offering you the chance to start your business.

If you have chosen to work with a professional lending company, you need to ensure that you have a few things on hand for the application process. You should have a well written and well thought out business plan that you will submit with your application. Your business plan outlines your business in detail and gives information about your expected growth so that lenders can get an idea of how successful your business will be over the course of a few years. You will also need a cash flow statement if you have one available as well as a survival budget for your personal finances if you are operating as a sole trader. You can find forms online that will help you to provide this information if you need it. Once you have submitted your information, it can take a few weeks before you will get an answer on your application and you should note that different companies may require different forms. Check with your chosen lender to determine what you need to provide.

For more information on applying for a business loan or the requirements to become a company director or obtain a loan then visit these resources:

https://startups.co.uk/how-to-apply-for-a-bank-loan-for-your-start-up-or-small-business/
https://www.qualitycompanyformations.co.uk/blog/what-is-a-limited-company-director/
https://www.gov.uk/apply-start-up-loan
https://www.virginstartup.org/ready-steady-grow
https://www.money.co.uk/business-loans/start-up-business-loans.htm
https://www.rapidformations.co.uk/

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