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How Can I Finance My Company?

Posted 03 Nov 15

Whether you’re looking to start a new business or expand one you already own, you will need finances to cover the expenses planned.

Although the amount of funding you require might seem daunting at first, there are many ways in which you can finance your idea.

Once you understand what your company needs and what options will allow your business a clear and successful start, you will be able to find just the right loan for the time that suits you best. In this article we will guide you through various options and help you understand how business loan can help your business.

Before you apply for a loan

Before you apply for a business loan, you will need to ask yourself questions which will allow you to better plan your company’s future. Although securing finance might seem like an easy way to boost your business, every type of funding comes with its own downsides.

Before you apply for a funding, make sure you discuss your business plan with a lender and understand the terms and conditions they propose. Make sure you will be able to pay back the loan when the deadline comes. Spend some time researching your company’s expenses and determine if you can cut down the costs without lowering the quality of your products.

Make sure your plans are realistic, as many first time business owners underestimate how much money they require to start up a business.

You can apply for a short-term funds, such as an overdraft, or a long-term loans offered by banks and private lenders. If you are looking for one-off funding, getting a loan might be quicker and easier, however, in many cases long-term loans are more cost-effective and they allow you to explore more business options while taking less risks.

Ways to Finance a Company

There are many ways in which you can finance your company, however, two main options most business owners consider are bank loans and private loans. If you already own a company with a strong credit score, you might want to consider a bank loan. Banks tend to be much stricter than private lenders and require a lot of exhaustive paperwork throughout the application process.

You will need to form a strong business plan and prove that you can pay the loan back upon the date agreed. A lot of people decide to apply for a business loan, because generally bank interest rates tend to be lower, however, this can differ from lender to lender.

Banks add a lot of other costs to their loans, such as fees, reporting requirements, covenants, etc. which are not included in their rates.

Since banks have other ways to make money than through providing business funding, it is much easier to get a loan from a private lender. Private lenders, as opposed to banks, are more flexible with their regulations and are happy to lend to new or small, growing businesses.

In tough economic times, getting a loan from a private lender can often be the only option a young business has, however, it also means that private lenders have a much better experience dealing with new businesses.

If you are considering a business loan, we offer our clients loans from leading financial institutions that best suits their business requirements. At Tawanda Accountants, we will not ask you for business plan nor will we ask you to fill a lengthy application. We offer our service at highly competitive rates which you can use to develop various areas of your business, without worrying about early repayments fees.

If you would like to know more about our offer, contact us today and we will make sure you get the best option for your business.