Like thousands of other UK businesses, you’ve probably felt the impact of Covid-19. But with the pandemic on the wane, you could be looking for business finance options to fund your future growth. So just what funding for your business is available in a post-Covid world?
Know your options
Before you begin looking for the best deal, it makes sense to know what business financing options are right for you. For example, do you need cash fast, or are you looking for long term financing? Are you looking to finance equipment leasing or to invest in new premises?
Financing options for businesses often have a specific timescale from application to turnaround. What’s more, your loan may only be approved for a particular use. So, it’s worth knowing your options as the economy recovers from the pandemic.
Negotiating finance can be daunting. But don’t worry, we’ve looked at the most common business finance options so you can make an informed choice:
Traditional bank loan
A bank loan should be your starting point if you’re an established business with good collateral and a strong credit rating. You could benefit from low rates and favourable lending terms if you’re lucky enough to fit those criteria.
It’s also worth talking to your bank, even if you don’t have a strong track record. A business adviser should be able to talk you through ways to boost your credit score for a future application.
Government loans and grants
The Department for Business, Energy and Industrial Strategy offers a range of business finance options. These can be an excellent alternative to a traditional bank loan, especially for smaller businesses.
Loans are available based on your industry, the stage your business is at, and the number of employees. In addition, various types of support, including loans, grants and financing, are available. Search by region to find funding that meets your needs.
The Recovery Loan Scheme, the current government-backed loan linked to the pandemic, is due to close on 30th June 2022. Applications need to be approved with credit letters generally issued by this date (although some lenders have closed their application process already), so if you want to take advantage of this scheme, you need to act fast.
Online loans
If you’re looking for a loan fast or a high street bank has turned you down, an online loan could help you get your business back on your feet. You can often get pre-approval so you can start planning your next move. And even if you’re a high-risk applicant, you may still be eligible to get a loan.
But fast approval and quick turnaround doesn’t come cheap. So, expect to pay more for the convenience of an online loan and research the total cost before you apply.
Invoice financing
If you’re in the B2B sector, another business finance option is invoice financing. Here your loan is secured against your account receivables. So, if you deal with businesses that are prompt payers, this could be one way to turn invoices into finance.
Property and asset financing
Like a super-sized mortgage, property financing can be an excellent long term financing option. A myriad of costs can be bundled together, and interest rates on your collateral can be very attractive.
Likewise, asset financing gives you options to purchase anything from vehicles to IT without paying the total costs upfront.
Get the best deal with Funding Round
If you’re looking to get back on your feet or grow your business in the post-Covid world and you need financing options, come to Funding Round. We’re the business finance broker that works for you, so contact us today to start your business finance journey.