Business Loans

If you are in a position where as by you wish to start up your own business, but do not know where to turn, maybe this example of a Mr. Tarbuck that came to us seeking similar advice will assist you.

Mr. Tarbuck came to us with this enquiry;

I want to start up my own graphic design company. To do so I have estimated that I will require a loan of £8,000 to see me through the first few months.
Should I go to a high street bank for a business loan or should I go through a loan company such as Egg who at the moment are offering competitive rates for the amount I require?

One of our advisors responded to Mr. Tarbuck with this advice;

As a general rule of thumb it is wise to avoid borrowing money from a high street bank. They impose all kinds of charges, cover you with paperwork, and then fix exorbitant rates of interest. Their whole rationale is to make sure their money is safe whatever the cost. In my experience, the claims by banks that they are trying to help small businesses are complete baloney.

I don't know your circumstances, but have you considered taking out a mortgage, or increasing the loan if you already have one? A friend of mine relied purely on credit card borrowings to start her business, taking advantage of the free credit period, but that may not be practical in your case since the subsequent interest rates can be punitive. I cannot recommend a particular loan company to approach. All l can say is that business loans from a high street bank should be a last resort.

If you have a specific query regarding loans do not hesitate to contact us via e-mail to ihaveaquestion@loans.org.