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A business expansion loan is specifically designed to facilitate the growth of an existing business. To be eligible for this type of loan, your business must already be registered and actively trading in the UK. The scope of expanding your business encompasses various initiatives aimed at scaling up your operations to enhance growth and revenue. The resulting boost in income can contribute to increased profitability, making it essential for business owners to contemplate expansion when their business reaches the appropriate stage. Although achieving expansion is only sometimes a straightforward process, as it introduces new risks, demands, and challenges for your business, the potential long-term rewards often justify taking the calculated risk.
These loans for business expansion offer businesses the means to fund new ventures and capitalise on growth opportunities. If you’re contemplating a small loan for a company to expand your current business, verifying that your business has the necessary infrastructure to support expansion is crucial. Conducting thorough planning and analysing cash flow along with future projections is essential to ensure you are well-prepared to invest in the growth of your business.
Lenders apply interest to the borrowed amount, calculated as a percentage of your expansion loan. The lender considers various factors when evaluating your business profile and determining the interest rate. Once your loan application is approved, you will receive the loan amount, and as per the agreement, you will repay the loan along with the interest to the lender over the agreed period.
Utilising a small business expansion is a viable option for market expansion, product diversification, and facilitating the merger of businesses. Given the significant implications of business expansion, careful consideration is essential before implementing any changes. Hence, understand the pros and cons of such a loan and decide carefully.
Pros: A few advantages of borrowing a business loan for expansion are listed below.
No Profit Sharing: The lender you secure a loan from doesn’t share in your business profits.
Simple Handling Process: Handling loan repayments is simpler compared to accounting for profits with an equity investor.
Simple Handling Process: Handling loan repayments is simpler compared to accounting for profits with an equity investor.
Easy Application Process: The application process is swift and straightforward, and upon approval, funds can be disbursed within 24 hours, enabling prompt initiation of expansion plans.
Cons: While weighing your decision, you must also consider the possible disadvantages of borrowing this loan expansion.
Collateral at Risk: To safeguard their investment, numerous financial institutions mandate that business owners provide collateral as a precaution in case payment defaults occur. If you use a business asset as collateral, the risk exists that you may lose it in the event of a loan default.
High-Interest Rate: The interest rates you receive generally hinge on your credit score, encompassing your business credit scores. Although lenders typically offer lower interest rates than alternative funding sources, meeting the criteria for these advantageous rates can be challenging. If your credit rating is below average, you may incur higher costs for the loan than desired.
No Guarantee of Success in Investment: There is no guarantee that the planned investment will result in the success of your business.
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*The rate you get will depend on your individual, financial circumstances. Late repayment can cause you serious money problems. For more information, go to moneyhelper.org.uk.
Lenders offer these loans for Limited Companies, Sole Traders, and other businesses who want to borrow money for the growth and expansion of their respective companies. Business Expansion Funding is a viable option if you:
Have a solid roadmap for achieving success from the investments you are about to make.
Why it might not be suitable for you?
The application process with LoanTube is simple. Our credit experts are well-versed in the business finance market and understand the requirements of our lenders. It ensures swift access to the appropriate lenders, increasing the likelihood of securing the finance you need on the first attempt. Additionally, you minimise the risk of spending time on direct applications with lenders that may result in refusals.
Most of our lenders like to see:
A background or credit check: Lenders typically conduct a quick credit search as part of the loan approval process, and this is usually almost instantaneous, ensuring that your application progresses without delays.
Recent trading history: The longer your business has been in operation, the greater the availability of loans from lenders, often accompanied by more favourable interest rates. While trading for 18 months or longer is considered ideal, lending options are still available for newer businesses, so there’s no need to worry.
A business health check: Lenders may require an overview of your business’s performance to ascertain the affordability of repayments and to provide reassurance that you can repay their credit.
Effortlessly save time and streamline the process by utilising LoanTube to explore the market and discover the most suitable loans for your needs. With our close partnerships with numerous lenders, we know exactly where to go for your loan. Additionally, the application process through LoanTube is straightforward, ensuring you access to the right loan options available in the UK credit market.
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You can apply for a loan with LoanTube in a few seconds. The information you shared will be verified, which might take a couple of days. Upon verification of all the information by the lenders, you will receive the funding into your bank account.
The borrowing limit depends on the lender and your requirements, ranging from a few thousand pounds to several hundred thousand pounds. Consult with our proficient credit brokers, and we will explore loan options tailored to your needs and financial capacity.
Lenders recognise that success often follows setbacks in business. If a prior commercial venture has resulted in a less-than-ideal credit profile or if you have faced challenges during lockdowns, there are still financing options available. Connect with our approachable and informed loan brokers to discuss your requirements, and we will leverage our network of lenders on your behalf. Remember that loans for businesses with less-than-perfect credit may entail higher interest rates than those featured on various loan comparison sites.
Typically, short-term business loans span 3-24 months. Depending on the lender, settling them ahead of schedule might incur additional fees or charges. However, in some cases, even with early closure charges, it can still be more cost-effective. For instance, if you have a 24-month loan and clear the balance within the first year, it may save you more interest payments.
Most short-term business loans are arranged over 3-24 months. Depending on the lender, paying them off early may incur fees or charges. Sometimes, even if you must pay early closure charges, it can still be cheaper. For example, if you have a 24-month loan you can repay in the first year clearing the balance early may save you more in interest payments.
While short-term commercial loans are typically unsecured, a delayed payment may result in additional interest charges and potential penalties. It could impact your ability, or that of your business, to secure credit in the future, and your lender retains the option to pursue legal action for debt recovery. Please consult our credit broker experts at LoanTube to explore affordable and flexible financing options for your business.
LoanTube helps UK firms access business finance through multiple direct lenders. We are an introducer and do not provide loans ourselves.
Think carefully before securing debts against your home or your assets. Your home and assets may be repossessed if you fail to keep up with repayments on debts secured against it.
All loan approvals & quotes are subject to credit checks and affordability requirements by lenders. If your business meet the lender’s criterion, you can borrow the money. We as a broker make an attempt to process your application with the most suitable lenders in our panel.
LoanTube is a credit broker and not a lender.
Warning: Late repayment can cause you serious money problems. For more information, go to moneyhelper.org.uk
LoanTube Business Model: As part of our business operations, we connect customers with partner lenders to help them find suitable loan options. LoanTube receives a commission from lenders for this service, which may, in some cases, affect the cost of the loan to the customer. However, as a responsible broker, we are committed to identifying the best possible loan options for our customers.
The rate you are offered will depend on your individual circumstances.
Representative APR Example: Amount of credit: £50,000 for 24 months at £2,339.38 per month. Total amount repayable of £57,348.69 Interest: £7,348.69 Interest rate: 14.4% pa (fixed).
14.4% APR Representative. Loan term lengths between 3 and 60 months.
