There have been some positive changes to the economy in the UK in recent months. As the country has slowly started to reopen, businesses have been able to allow workers to return to the office while the High Street has seen a surge in footfall since the doors were opened to retail stores in the spring.
However, for the businesses that have made it through to the other side, there may be a need to rethink how they approach their business plan. After a year that saw all the original ideas and predictions removed and revamped, businesses owners are likely to be approaching this new era in a very different way – and any ideas that they have are likely to need financing.
Whether you own a start-up or oversee an SME, if you’re hoping to take out a business loan in order to help with the new plans you have, read on. Here’s a look at how you can successfully take out this type of finance in 2021.
What will More Funds Achieve?
More funding in your business could help you to achieve your goals. You might want to update your retail store in order to attract customers or invest in new equipment. It might even be that you’re set on growing your team to include fresh talent – after all, there are a lot of people who are likely to be ready for a career change after the events of the last 18 months.
By taking out a business loan, you could achieve your goals and meet these new targets you’ve set yourself. So, how to take out a loan.
1. Do Some Research
There are different loan products on the market. It’s important that you find the one that suits your business. You will know your finances inside out, so this should help you to decide what types of loan, interest rate, and repayment plan could work for you.
2. Check Your Credit Rating
How healthy is your credit score? You can check using one of the three main credit referencing agencies – Experian, Equifax, and TransUnion.
A high score shows you pay off any credit or loans you have on time. Therefore, the better your credit rating, the more likely it will be that you’ll be approved for a business loan. If you have a poor rating, you might not be eligible for this type of credit.
3. Make Sure Your Financial Statements are in Order
The lender is likely to want to see your financial records. This is to see how healthy your balance sheet is and to check whether you’re in a position to pay the loan back.
Make sure you have up-to-date records and that you’re ready to answer any questions the lender may have.
4. Do You Tick the Boxes?
You’ll also need to make sure you meet the criteria. You’ll be asked questions about factors such as your monthly turnover and how long you’ve been trading for. Make sure you have the information the loan provider needs and that you meet the criteria.
5. Know the Difference
If you’ve taken a loan out before, you might feel well-acquainted with the process involved. However, all providers are different, so it’s important that you understand how much you need to take out and the terms the provider offers before you take the plunge.