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What is the purpose of a bank business loan?

Before looking into which bank business loan is the most suitable to your business needs, you need to understand that whether you are approved for a loan or not will be judged on your personal credit. If you are planning on starting a new business and your personal credit is bad, with CCJs and defaults then you are likely to find looking for an affordable bank business loan difficult. Building a reputable credit history is vital if you want to lend money for your business to help make it a success.

If you find it difficult to get a traditional bank business loan, then it may be worth looking into getting a government grant. While these grants are fairly scarce, they are out there and designed to get new businesses onto their feet. While most of the grants available are funded by the government, the European Union (EU) also help new businesses by offering a range of funding. Grants are usually industry-specific or tagged to the business' location. However, a mixture of a poor economy and reduced EU funding means most grants are now only awarded to businesses who need a specific project funding. Even then competition is fierce, and you need to have a strong business plan and cash projections before you even apply for the grant.

Both Barclays Bank and Santander are currently offering the most competitive bank business loan on the high street. If you believe you have a good chance of being successful with a grant or alternative funding then you should visit the Government's Business Link website. There you will find information on grants and loans available and what you need to qualify for one.

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