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Business Loan Uk - Options for finding a business loan UK

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In these tough economic times, small business owners and everyday entrepreneurs looking to start their own companies may have a difficult time obtaining a business loan in the United Kingdom. However, if you are willing to put in the time and effort in research and investigation, it is not too difficult to locate a business loan UK. This article looks at some of the more common sources of loans provided to private individuals in the UK, as well as how to obtain these valuable sources of funding. The two main sources of obtaining a business loan UK that will be discussed are bank support and development funding that comes from public support.

The first source of obtaining a business loan UK is bank support. Most business owners that think seriously about ways to raise money will soon begin to think of loans. When they begin to think of loans, it is natural that they will think of approaching their local banks, credit unions, and similar financial institutions for loan support. A bank will typically look for some sort of security or collateral to increase its confidence in any loan it offers to a small business owner or entrepreneur. If you are able to provide a sufficient amount of security or collateral to the bank and you can also satisfy the bank with the plans you have drafted up and your future projections of company earnings, it should be possible to secure some sort of business loan from the bank without too much trouble.

However, if the bank declares that you have not provided a sufficient amount of collateral or security for it to take the risk of giving you loan money, yet also tells you that if you provided enough collateral, your business venture would interest the bank enough for them to provide you with a loan, then you may be able to use the Enterprise Finance Guarantee scheme. The Enterprise Finance Guarantee scheme and the Small Firms Loan Guarantee scheme, which preceded it, are two options for small business owners who have bank approved ideas but insufficient collateral to secure loans from the bank. In these circumstances, they can turn to the government for collateral, as the government will provide a partial loan guarantee to the lender instead of the lender having to generate sufficient collateral. However, many small business owners in the past have been hesitant to pursue this option for some reason, perhaps because they see the process of government and bank involvement as needless bureaucracy. An additional issue of contention is that the process does not remove all of the risk of the loan from the lender, as the guarantee the government provides is designed to only partially cover the necessary collateral. That said, it is an option for small business owners interested in a business loan UK that involves the bank and government assistance.

A second option for obtaining business loan UK money involves development funding that is publicly supported. In this case, money that comes from public support can come from soft loans which are offered at interest rates that are favorable or repayment terms that are friendly to small business owners and entrepreneurs. Similar options involve investment of equity that goes through development agencies, and in some cases, it is even possible to obtain direct funding through grants. The primary advantage of funding through grants is that you will not need to pay back the money you receive through the grant as long as you follow the terms and conditions that are attached to the grant money.

Public funding can still be considered a form of business loan UK because it is primarily designed to assist small business owners and entrepreneurs who are interested in business development projects within the community. In this sense, it is a loan as there is an expectation that the eventual business, should it succeed, will bring commerce and customers and further business to the area. As a result, money offered through public funding tends to be related to projects that involve training of local personnel, development of new products projected to aid the public, or investments in technology and equipment related to the local city or town.

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