Empower your business with fast, flexible funding

Term loans are business loans with a fixed repayment schedule and a predetermined end date. These tend to be long term business loans, and are best suited for projects where you’re confident in your ability to meet the payments every month.

As you would expect, short term business loans are designed for immediate needs. ‘Short term’ in this scenario means they have a term of a year or less and are quick to fund. One important thing to consider is that interest rates for short term business loans will usually be higher, as you’re likely to pay more for the speed and flexibility of the product.

Lines of credit are built around flexibility – they allow businesses to draw funds as needed up to a set limit. Once you reach that limit, the arrangement ends. These can be useful when you’re not sure how much you need and want to stay in control of how much you borrow and when.

As the name suggests, equipment financing is meant for purchasing business equipment. That’s because these loans use the equipment itself as collateral. This can be ideal when you need to use equipment to generate revenue, which helps repay the loan.

Invoice financing allows businesses to borrow against the amounts due from customers, providing immediate cash flow. This can be useful if you have a large number of unpaid invoices, providing short term relief and flexibility.

Similar to invoice financing, merchant cash advances are finance based on sales – except here it’s your future revenue. Here, the lender provides funds in exchange for a portion of daily credit card sales, repaid on a flexible term until the sum and interest are repaid.

The costs of a small business loan in the UK can vary widely depending on the loan type, loan amount and loan term. Loans start from 0.8 % per month.

Secured business loans are protected by collateral, which is an asset that the lender can seize if you fail to repay the loan. Secured loans usually offer lower interest rates and higher loan amounts. On the other hand, unsecured business loans don't require collateral, but the lender may request a personal guarantee.

A good credit score varies depending on the rating agency in question, but generally the higher your score, the lower your perceived risk. It’s worth noting, however, that your credit score alone is usually insufficient to determine your eligibility for a business loan. Most lenders consider many factors, including financial history and business performance.

The main thing lenders want to know is if your business is healthy. This includes checking if it has defaulted on debt, has any outstanding County Court Judgments (CCJ), and has a solid customer base with steady revenue.

Getting a small business loan with a poor credit history can be challenging, but it's not impossible. Here are some tips to help you secure a loan:

• Check your credit score: Before applying, check your credit score and identify areas for improvement
• Improve your business finances: Show lenders that your business is profitable and has a solid financial foundation
• Explore alternative lenders: Consider lenders that have more flexible requirements and are more willing to work with businesses with poor credit
• Provide collateral: If you have assets that can be used as collateral, this can increase your chances of getting approved
• Consider a co-signer: If you can find someone with a strong credit score to co-sign the loan, lenders may be more willing to approve your application. However, this can be risky as the co-signer is equally responsible for repaying the loan.

Keep in mind that getting a loan with poor credit can come with higher interest rates. It's essential to weigh your options carefully to avoid further financial strain.