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How to apply for a business loan

Potential borrowers need to be aware of what information they will need to provide lenders when they decide to apply for a business loan. The average lender will not consider lending money for commercial reasons unless they have seen a thorough business plan. In this plan borrowers will need to include the purpose of the loan and how much money they need to borrow. If the money is for a business that is already running, the borrower will need to provide a current profit and loss statement. Banks and finance companies will want this information as they need to know whether or not the business is capable of making repayments on the loan.

The next step of the process will be choosing which companies to approach for lending. People who have good credit history and a good relationship with their bank should contact a loans adviser at the bank. Generally the quickest way to apply for a loan and have it paid out is to visit the bank with a copy of a business plan. Borrowers can also apply online and over the phone however this will take longer as the bank will need to sight the business plan or profit and loss statement before they make a decision. Banks in the UK that offer business loans include Barclays and HSBC.

Those who do not qualify for a bank loan will need to approach a finance company. However it is important applicants know that finance companies will charge them much higher fees and interest rates.

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