While running a business an individual requires funds for almost every reason. Whether he wants to takeover an organization, purchase plant and machinery, buy buildings and offices, raise money to pay off debts, expand your business or other business expenses, a business loan becomes a pre-requisite if the funds are scarce.
A business loan is available for businesses from all market sectors including manufacturing, retail, leisure, farming, professional practice and services. These loans are designed to cover the cost of the operations of a business. Both new companies that aspire to establish themselves in the market and the older companies that are undergoing a transformation may benefit from this type of loan.
Finance is often considered as the backbone of any business. Business is one of the best ways of earning money provided you have an effective and efficient management and planning. Business loans provide the borrower with an amount ranging from ? 25,000 and ? 1,000,000 for a repayment term of 5 to 25 years.
Business loan comes in two different forms: secured and unsecured. For secured business loan, you need to pledge your property or assets as collateral. Such loans offer lower interest rate and flexible repayment period. On the other hand, unsecured business loan offer somewhat higher interest rate and a short repayment period. It does not require any collateral.
There are various types of business loans available in the market. These are invoice finance, business overdrafts, commercial mortgages, leasing/asset based lending, factoring, invoice discounting.
The main benefit of a business loan is its flexibility. Flexible business loans make it more easy and convenient for the borrowers to repay. They offer you a choice to opt for fixed interest rate or variable interest rate. Other advantages of these loans are capital repayment holidays and deferment, long repayment duration and highly competitive rates.
Your credit history will mainly affect the interest rate you will have on your loan and the lender may include additional fees as insurance against default.
Andy burton is a business writer specializing in finance and credit products and has written authoritative articles on the finance industry. For more information related to Business Loans, Bad Credit Commercial Loan, Commercial Secured Loan please visit http://www.commercialsecuredloan.co.uk/
Source: http://loan.learntrend.net/commercial/business-loans-financial-assistance-for-business-operations/
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