Business loans present a great opportunity to finance the growth and expansion of a business. Business loans can also be used to help with cash flow, restructure finances, build credit, and buy necessary equipment. Ultimately, acquiring a business loan is an ideal way for companies of all kinds to ignite growth.
However, there are a whole range of options when taking out a business loan, so let’s explore them…
For business owners who need a cash flow solution, VAT loans are an excellent option. They are designed specifically to cover business’ VAT liability by providing short-term funding options.
These loans tend to have a relatively short approval period and low interest rate. This makes them an attractive and effective way to pay off VAT liability when cash flow may be tight. With VAT loans, businesses can bridge the gaps between VAT payments and generating cash flow. This allows businesses to make their VAT payments on time, avoiding penalties as well as poor cash flow.
By obtaining a VAT loan, businesses can effectively bridge their short-term liquidity gap until their VAT money becomes available. This can help alleviate financial stress while providing businesses with a better sense of security when it comes to cash flow management. This then allows businesses to confidently pursue opportunities that might otherwise be out of reach due to uncertain finances.
How do they work?
Any business registered for VAT can benefit from a VAT Loan, with loans starting from £10,000+. Payment is usually made directly to HMRC– saving you all the fuss! Your 3 monthly repayments will then begin 30 days after your agreement has been activated. It is a simple as that!
Corporation Tax Loans
A corporation tax loan is a fast and effective way for companies to gain access to capital. It works by allowing businesses to receive an advance payment against their future corporation tax liability.
Using this method, companies can pay off their tax bill without compromising their cash flow. This can be particularly beneficial during periods of rapid growth or when launching new products and services, where access to extra cash quickly can make all the difference.
How do they work?
Here at WestWon, our corporation tax loans start from £8,000+ with repayment periods of either 10-12 months. Just like our VAT loans, payment can be made directly to HMRC.
Working Capital Loans
Businesses often need to access extra funds in order to cover costs while they wait for cash to come in. So, whether this is cash needed to purchase stock, cover overdue invoices, manufacture products or to pay suppliers or staff, a working capital loan can cover all bases! A working capital loan offers fast access to money and can provide immediate cash flow relief. This instant cash injection means that your business does not have to wait for income from customers before beginning a project.
Many businesses find that taking out a loan for working capital offers an excellent alternative funding line. So as opposed to using credit cards, overdrafts, or personal finance they can undertake a dedicated asset-backed loan from a lender.
An equipment loan is a type of financial product that allows businesses to purchase equipment necessary for operations without breaking the bank. These loans tend to have terms and conditions responsive to the needs of the borrower, depending on the size and nature of the project. They are useful for those in need of large, expensive items such as machinery or vehicles needed for business purposes. However, they are also used for smaller asset types too- especially for instances where equipment is purchased in high quantities.
Equipment loans can help business owners acquire what they need while spreading out payments over an extended period. This structure provides security as businesses don’t have to risk draining their operations funds at once by making a large purchase all up front.
A dilapidation loan is a form of loan used to finance the repair, maintenance or restoration of a property or assets that require urgent repair. The aim of the loan is to enable investors to purchase and restore properties – such as residential structures, office buildings or retail centres. This will then inevitably improve their quality and increase the value of the property.
The term length of these loans can be tailored to your needs. However, paying back a dilapidation loan early can be beneficial as it could save you on interest payments.
Peer to Peer
A peer-to-peer loan is a type of financing devoid of traditional institutions like banks. In this scheme, businesses invest funds and companies borrow from the pool of investors without having to go through the banking process.
Usually, capital is advanced against pre-agreed periodic repayments by the businesses for venture capital or asset acquisition. Not only does peer to peer lending solve cash flow problems instantly, but also helps to improve credit ratings if payments are made timely. It is undoubtedly an attractive option to help entrepreneurs grow their business and increase chances of success.
We hope that this guide has proved useful to you, however, should you have any additional questions please don’t hesitate to get in touch! Give us a call on 01494 611 456, or send an email to firstname.lastname@example.org and a member of our expert team will be able to help!
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