Business Loans

Term loan: Ready cash for your growth opportunities

What to look out for

  • Red Lenders will focus on the affordability of the loan and may require business plans and forecasts to support the application
  • Amber Requires solid business finances and personal guarantees, so they’re not for start-ups or operations with small or unpredictable cash flows
  • Green A great way to take advantage of new business or growth opportunities quickly and affordably

Make the most of a growth opportunity by using a non-bank term loan to provide a ready cash injection into your business.

What is a non-bank term loan?

Term loans can provide your business with ready cash that you pay back over just a few years, rather than decades. And they can be finalised much more quickly than your average mortgage. Today, it’s easier than ever to find alternative, non-bank sources for significant amounts of cash for your business . . . though you’ll usually need to meet a few essential requirements.

What’s the fine print for a non-bank term loan?

Well, first, you typically need to have been in business for at least a couple of years. You’ll need to be profitable, too, and have annual revenues that are pretty healthy… in the order of at least £75,000 a year and up.

Do I need to provide a guarantee for a term loan?

Non-bank term loans may also need you to be able to guarantee the loan somehow, whether that’s through good personal credit, guaranteed cash flow or collateral of some kind.

How does a term loan work?

Well, they’re usually for much shorter terms, generally one to five years, although longer-term loans of 10 years or more are also available. Second – and this is the really appealing part – you can be approved in as little as a day or two and can have the money in your account shortly afterwards, usually in days and almost always in less than a week.

There’s a price to pay for the convenience of a term loan

You’re typically going to pay more in interest than you would for a standard bank loan. And the time you have to pay back the loan is usually fairly short too, though your payments can be handled weekly, bi-weekly or monthly, and there’s generally no penalty for paying back early.

What else could I use a term loan for?

Businesses can use term loans for lots of things: paying for additional staffing during busy seasons, covering expenses during a seasonal slowdown or many other purposes. You could also use a term loan to buy a new piece of equipment that can help you operate more quickly or efficiently, although asset finance might be a more preferable avenue for this.

As with any other type of financial decision, it pays to understand the options available to you, our platform should be able to help with that. Compare interest and payment terms before making a decision.

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