There are many different types of loan available in the UK, from secured and unsecured products to those that are tailored towards specific needs and industries.
Make no mistake; choosing the right type of loan for your business is pivotal, particularly in terms of the amount that you’ll eventually repay and the precise duration of the loan agreement.
Given the importance of this, however, it can be all too easy to overlook the other, finer details associated with successfully applying for a business loan. In this post, we’ll focus on this challenge while asking how you can improve your chances or driving a successful application.
Apply for the Right Type of Loan
It’s also important to know precisely what type of loan you need, as this will inform your application and type of lender that you select.
For example, while banks offer generic and structured loans for businesses, service providers such as Nucleus Commercial Finance can provide more flexible options that small businesses who are looking to manage their cash flow successfully.
You should also determine whether or not you want a secured or an unsecured loan, as while the former may allow you to borrow more and at a lower rate of interest, this is only suitable if you have the necessary business assets and are willing to use these as collateral.
By making informed decisions at every stage of the process, you can get the right type of loan and really boost your venture’s prospects.
Maintain a Good Credit Score
Before you even consider making a loan application, it’s important to ensure that you have a viable credit score. This is central to any successful application, and without this your efforts are almost doomed to fail.
In simple terms, business credit scores are typically measured between 0 and 100, with those at the higher end of the spectrum more likely to underpin successful applications.
To achieve a viable score, you’ll need to ensure that you keep your financial and loan documents in good order and pay your company bills on time (and in full). Avoiding charge-offs and late payments is also key, and while some lenders will have variable criteria this advice will genuinely stand you in good stead.
We’d also recommend not applying for multiple loans or lines of credit within a short space of time, as this will lower your business credit score and seriously undermine your chances of success.
Make Sure You Process and Accurate Application
On a final note, it’s absolutely crucial that you take tremendous care when completing your business loan application and processing this.
The reason for this is simple; as loan applications are often completed in haste, while any errors pertaining to your name, address or personal data will result in the application being either delayed or stopped completely.
Neither of these scenarios is ideal, either in terms of your securing timely funding or maintaining a viable credit score over time.
So, be sure to pay attention to detail when completing your application and double-check the details before submitting this in full.