Loans For Businesses

Can I get a loan to set up a small business?

In the current climate, loans are for any purpose. However, individuals should be wary of borrowing money on a personal basis to set up a business. Good advice is normally that if a business needs to borrow money to set up, then it should be done within the business as opposed to by an individual.

What do I need to be aware of when getting a loan for a small business?

The main fact to be aware of when getting a loan for a small business is, is the business going to be able to service that additional debt? Many people have great business ideas and are very positive about them, but any lender also would want to be very sure that the purpose for which the money is being advanced is able to be repaid. And therefore, careful planning should go into the business plan in order to be sure it can be repaid.

What risks are involved in getting a loan for a business?

The risks in borrowing for a business are the same because this is on a personal basis. The loan is being made to an individual. Therefore if repayments cannot be met, then that impacts on the individual's credit history, not on that of the business. Also, if the loan is not repaid eventually, then a county court judgment can be registered against that individual, and if they've had difficulty with the business they may also have problems if it has been a limited company, also being disqualified as the director. Therefore you get a double hit, which is not a good place to be.