Business Loans online in the UK
With more and more people in the UK doing business through their smart phones, tablets, and computers, it doesn’t come as a surprise that online applications for business loans have become the preferred option for many business owners in the country. As a matter of fact, one of the main reasons why businesses are increasingly relying on online loans for starting or expanding their business is because of the seamless application process that if offers. And side from the easy process, the speed of funding and affordable rates that online business loans provide simply make them an irresistible option compared to traditional business loans from banks that can take forever to obtain.
Business Loans from an Online Direct Lender
If you are a business owner, securing the funding that you need to grow your business can be quite challenging if you don’t know where to look. Fortunately, online direct lenders have made the entire process of obtaining a loan much faster and easier.
One of the main reasons for this radical change is technology. The technological advancement has made a significant impact on business loan funding, especially when it comes to obtaining alternative financing instead of traditional bank financing.
The problem with traditional business loans from banks
When your managing a small or medium scale business, capital is essential. The traditional way of processing a business loan has always been a time consuming and complex ordeal with tons of paperwork and documentation involved. If you are a small business that needs reliable funding right away, then traditional loans are clearly not the ideal solutions.
Banks, are in the first place business entities, and will always prioritize bigger ROI (Return on Investment). It’s simply not that lucrative for banks to lend loans of a million pounds or less to small and medium businesses when there ROI would plummet over the roof on multi-million dollar loans to large corporations. That’s why even though small and medium businesses employ more than half of UK’s workforce, they still struggle to secure the financing that they need to grow their business.
Direct business lending
With plenty of small and medium scale businesses left underfunded, this served as a great opportunity for alternative financing companies to step in and fill out the void. Direct lenders with an assortment of alternative business loan options are now available in the UK today and are increasingly becoming the number one financing option for business owners with each passing year.
Business loans from a direct lender is readily accessible directly to the business owner without the need for a third party. This provides the lender better discretion in processing loan applications. A lot of UK’s direct lenders and loan companies have also set up their operations online to reach every business in the UK that require a quick and easy means to secure the financing that they need.
Advantages of Direct lenders online
There are numerous direct lenders online which can be quite overwhelming for business owners looking to obtain a business loan. With a little bit of research however, business owners can easily select a reputable direct lender that can help them secure the financing option that suites their business best. And because they operate online, business owners can also enjoy certain advantages that they won’t find in traditional business loans from banks and mainstream lenders such as:
- If you are a business owner, you might be surprised with the minimal to no paperwork required in taking out a business loan from an online direct lender as well as its amazingly fast approval process.
- Majority of direct lender’s websites provide seamless application forms that can be completed without much stress. And when you apply for a short-term business loan online, the financial products are normally unsecured and won’t need extensive collateral.
- Direct online lenders who provide business loans also utilize advanced data-driven algorithms in determining a business’s creditworthiness. With state-of-the-art technology, an applicant’s credit score, business cash flow, and even social media can all be reviewed in an instant allowing lenders to reach a decision on whether or not the applicant is eligible for their loan service within 24 hours. This is a far cry to the approval process from traditional banks which can take weeks to complete.
Business owners can also take advantage of the internet and the available technology not only in the application process but also in searching for the right direct lender online. There is an abundance of information that you can find in the world wide web including the available direct lenders in the UK that provide the best loan offers as well as comparison sites and customer reviews to help you make the best decision for your funding needs.
How to find Business Loans if you have bad credit Online
There are businesses in the UK who have trouble securing the financing from traditional lenders because they often cannot satisfy the stringent eligibility requirements. And if you are a business owner with poor credit history, you will find many challenges when applying for a loan even from direct lenders online who normally have more lenient eligibility criteria. But this doesn’t mean that you can’t take out a loan for your business entirely. If you want to take out business loans for bad credit, here are some of the steps that you can take:
Construct a strong business plan
So you can significantly improve your chances of getting approved, having a sound business plan with intelligible goals is crucial. When creating a business plan that you will present to your lender when you apply for a business loan, here are some essential points that you need to bear in mind:
- Your business plan should be comprehensible enough so lenders will understand why your business will be successful and how the funding that you are requesting for will aid to that success.
- It should cover an executive summary, nature of your products, services and industry, an analysis of your competitors, a go-to market strategy, an operating and management plan, financial statements and projections, and general background of your business.
- You should demonstrate how the loan proceeds will be used. Be as concise as you can, down to the tiniest detail.
Make the necessary steps to fix your credit
Make it a point to rebuild your tarnished credit by not being late on paying your bills, creating a growing savings account and minimizing the use of credit. Here are some of the tips that you can use to keep your credit rating on favourable levels:
- Payment of debts and bills is particularly important in painting a positive credit history and this is something that you need to look into with great care.
- Pay off any existing debt in your name and never take out unnecessary debt.
- Check your credit report at each major credit reporting bureau so you can keep track of the progress you are making and detect any inaccuracies in your report that can negatively affect your credit rating as well.
It may take years before you build back a poor credit score but consciously taking the necessary steps on repairing it will benefit you and your business in the future. In the event that you take out a business loan for bad credit from a lender, tell the company on the kind of steps you have been doing for your credit as this can aid you in your application.
Consider less traditional options
Traditional business loans from banks and other mainstream lenders might not be the suitable option to consider if you are a business owner with bad credit given the strict eligibility requirements that need to be met in applying for the said financial products. With that being said, there are alternative ways of getting the funding that you need from non-traditional lenders who specialize in providing business financing to applicants with less than stellar credit ratings. Most of these lenders operate online which means you can easily access them when you need to.
Business Loans with a guarantor
Taking out a guarantor loan for your business is pretty straight forward. The primary borrower (the business owner) applies for the loan and will need to find another person to include in the loan application (the guarantor). The guarantor is typically a family member like a spouse, parent or sibling and the person will agree to “guara