Start-up business loans

What is a start-up company?

Start-up businesses are new companies in the early stages of development. In the beginning, these companies are often funded by the owners, investors or new business financing. Securing financing for a new business, whether a ltd company, sole trader or partnership, can sometimes be a confusing and overwhelming process and many entrepreneurs feel the pressure and understand the importance of getting the very best start-up loans for them at the best possible rates. We’ve put together some tips to help you do so.

What is a start-up loan?

When it comes to financing a new business most of us do not have the funds readily available to do so! Business start-up loans are specifically designed for owners who are ready to take the plunge into starting their own company or those who are already working on an idea that is still in its early stages. It’s important to point out that start-up loans aren’t just for brand new businesses. For example, if you are already incorporated and have funded the first few months of your business personally and your company is less than 24 months old you could still apply for a start-up loan.


How to finance a new business start-up

Most high-street banks and mainstream lenders offer bank loans for business start-ups. It’s important to do your research in two key areas.


Are eligible for the loan that they are offering? Lending criteria is key here – make sure you’re not applying to a bank or lender who will never accept you for their business finance start-up loans. Repeated rejected applications can impact credit scores so it’s important to confident you’ll get accepted before making a full application with a lender.

Shopping around!

When trying to secure loans to start up a business it’s important to shop around and compare products like for like, not just on the interest rate alone. Compare new business start-up finance on a pound for pound basis, including any additional fees which will be listed in the terms and conditions.

Company reviews are available online so make sure you apply with a lender that you trust. Equally, if you need help in searching for the best banks for start-up business loans, speak with an experienced broker – they can share their knowledge and often help you get your new business finance quicker. We work alongside brokers all over the country.

How to finance a franchise start up

Franchise start up loans are available and in most cases the application process tends to be a little more straight forward, the reason for this is because often the business viability has already been checked out by the franchiser. Also the cash flow projections and business plans are often a lot more accurate.


Will financing a business start-up include a credit check?

More often than not the answer is yes, taking out a start-up business loan is similar to taking out personal finance, you are liable for the repayments. Because of this the loan companies will want to conduct full referencing prior to agreeing to lend. Finding start-up business loans without personal guarantee is almost impossible!

Obtaining financing for a new business with bad credit

A lot of applicants are concerned about applying for start-up loans for business due to historic adverse credit or poor credit. Each start up finance company will have different lending criteria, therefore although you may be declined with one bank or lender you could get accepted elsewhere. Our advice is to speak to an expert, when it comes to bad credit lending. We can help point you in the right direction.


Start-up loans for women

We get asked regularly about business start-up loans specifically for women the reason for this was that the UK government recently run a scheme to encourage women entrepreneurs. The facts are that if you are wishing to secure financing for a new business, your sex is irrelevant!

Start-up loans for young entrepreneurs

Some start-up loans companies have products available for younger entrepreneurs, due to the target age of the applicants the term can be stretched making the repayments more affordable. It’s worth mentioning the longer the term the more interest paid overall. This start-up finance option often comes with additional benefits such as help and support with getting your business off the ground!

What will the start-up loans company expect in terms of paperwork?

To speed up the process it’s advisable that you have all paperwork to hand prior to submitting the application. The lengthiest parts tend to be the finalized business plan and cash flow projections. These will be submitted alongside personal documentation such as bank statements and ID.


New business equipment financing

Start-up business equipment financing can be slightly different to securing a standard business start-up finance the reason for this is instead of choosing to take out personal business finance you could opt to use asset finance instead, the loan is secured against your new equipment. However, if you fail to make the repayments your equipment could be repossessed.

Alternative types of financing for a new business

If you wish to explore other options of financing a new business we have put together a separate quick guide. CLICK HERE

At Merchant Advice Service, we work with lenders to help you in finding the very best loans for start-up companies. Our experts specialise in the following areas, so speak to us today for a free quotation;

Loans for business start-ups in the UK and EU

High risk start up business loans

Financing a new business with bad credit

Large start up loans, for restaurants or catering businesses

Quick approval business start-up loans

Equipment financing for start-up business


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