What is a business loan?
Businesses are expensive to start and run, and as such they generally require a large amount of capital to pay for these expenses. To pay for this, businesses may take out a business loan. As with all loans, a business loan must be repaid with interest.
A business loan can be used to pay for expenses that the business is unable to pay for itself at that particular time, such as:
• Purchasing an office or storefront
• Upgrading business equipment or IT software
• Staff wages or advertising expenses during the early life of a business or startup
A business loan can be secured by the office or storefront property owned by the business (commercially secured business loan), or by the home the business owner lives in (residentially secured business loan). Choose between the different types of business loan and business overdraft.
Business loans charge interest rates in slightly differently way to other types of loans – they charge a risk margin based on how the lender views the business’s prospects for success.
As well as interest charges, there are also fees that are charged on business loans. Find out what fees apply to business loans.