A business loan is any kind of loan offered to a commercial entity, rather than an individual person and can range from as little as £1,000 up to several million. They are normally obtained on an unsecured basis and can be used for a variety of purposes i.e., to cover ongoing running costs, buy stock, increase staff or perhaps purchase new premises.
The cost of repaying the loan (repayment schedule) and the duration over which it is paid (term) can vary from one month to 10 years, depending on the type of loan and the lender. The loan rates will depend on a number of considerations ranging from but not limited to the amount required, the term of repayment and the business’ ability to repay the loan (affordability).
Traditionally, business loans have been issued by the business’ bank, however, there are now many other UK lenders who are able to provide more flexible finance in terms of the repayment schedule and the duration (term) of the loan period.