Business loans & finance London

You’re a founder in London with hunger, passion and zeal. You want to see your business grow into what you’ve always envisioned. But finances are holding you back. Securing business loans and finance in London is no easy task. But as expected, Drop Studio has you covered.

In this blog we’ll explore:

  • How to get business loans & finance in London
  • Business loan vs finance in London
  • Do you need a business loan or finance
  • How to get approved for business loans and finance in London

How to get business loans & finance in London

You have a host of options to choose from when it comes to getting business loans or finance for your business. Some more faster and efficient than others. From loans, investors, grants, angel investors, crowdfunding & venture capitalists, identifying the best type of funding for your startup is crucial to its success. The biggest question where business funding solutions are concerned however is what options are available and which is best and faster. In this article we cover business loans and finance

To put it frankly, getting funding is no easy task. Let alone fast funding. Yes, some options are faster than others in that you may get approved / accepted faster. But the process itself can be quite tedious when you do it alone. That’s why Drop Studio exists, to help make your life way easier.

Business loans are advantageous as a relatively inexpensive way of borrowing money. However, local bank managers only have the power to approve small loans. All substantial loans need to be referred to the bank’s central credit control department, which can take weeks or even months to make a decision.

Typically when you apply for a loan the bank will ask for supporting documents such as a business plan, cashflow analysis and profit and loss forecast, and is likely to want to meet you in person before deciding whether or not to grant you the loan. In theory, anyone with a viable business and a clear plan on how to repay the money can borrow from banks. But in reality? Not so much. Banks take a host of factors into account before granting loans.

Banks prefer lending to existing businesses with a strong track record and established property or assets to act as security for a loan, also known as a form of asset finance. You can borrow as much money as the bank is prepared to lend you. This typically will be determined by your ability to pay it back and how much security you’re able to put up against the loan.

Business loan vs finance in London

Financing a business is the process of bringing money into a company. Usually this means taking on debt to secure this financing and by taking advantage of credit arrangements. That pretty much sounds like a loan, doesn’t it? Yes, but it’s not quite a loan. The common factor between business finance and loans is that both are forms of securing funds externally.

Bank loans are a way for business owners to obtain additional working capital or even starting capital. While the term business financing can mean the same thing as obtaining a bank loan, generally it implies looking for and securing the money from a non-traditional source, such as an alternative financing company.

Bank loans and loans from credit unions are structured according to the financial history and reputation of the borrower and involve various affordability checks.

Do you need a business loan or finance

Fact of the matter is unless your business has the balance sheet of Apple or Tesla, eventually, you will probably need access to capital through business financing. It’s nothing to be ashamed of and says nothing about your business acumen or character. Many large-cap companies routinely seek capital infusions to meet short-term obligations.

For small businesses, finding a suitable funding model is vitally important. Take money from the wrong source, and you may lose part of your company or find yourself locked into repayment terms that impair your growth for many years into the future.

Business loans and finance can help you start or grow your company depending on your needs and reasons for getting funding, but navigating the process and lending standards can be intimidating if you don’t know what you’re doing.

When you take out a tailored business loan, you’ll have to apply for it and tell the lender what it’s for. In the same way as applying for a personal loan, you will need to show a lender what your income is and how you plan to repay the loan. So, do you need business loans and finance? Chances are you do, and Drop Studio can help you secure it.

Trying to secure that much needed funding for your business to scale is no easy task. It may be an emotionally taxing experience.

We can help. We are proud partners of Crowdcube and Indiegogo. We assist ambitious businesses like yours in communicating their ideas, with outstanding crowdfunding video production, campaign design, crowdfunding marketing, PR and more.

How to get approved for business loans and finance in London

Unlike your typical personal loan, business loans generally involve more risk for the lender, resulting in stricter eligibility and longer applications. You’ll typically need to gather some key financial details to complete your loan application, and the application process can often take weeks.

Okay, now let’s picture this. You just walk into a bank or a lender’s office and politely ask to borrow £500,000 and pay it back whenever you feel like it. Would be a dream, wouldn’t it? Well, there’s procedure to follow when applying for a business loan or finance in London. Or anywhere else for that matter.

You know why you need the funding and the reasons behind it. But why should the lender’s give it to you? Business loans and finance are a frequently used resource to help support a company’s growth. The tricky part is getting the capital when it is needed. If the company doesn’t prepare for getting a business loan far in advance of when they require it, chances are you won’t get it.

Here are common business loan requirements you’ll find when applying for a business loan or finance in London:

  • Credit score: Lenders typically examine your personal credit report when you apply. If you’re already in business, prepare to submit a credit report for your company as well.
  • Age of your business: To qualify for most small business loans, you’ll need to be in business for at least 6 months. Your typical bank could require you to be in business for at least 2 years. You can consider a startup loan if your business is less than a year old.
  • Annual revenue: Lenders often require businesses to meet a minimum level of income to be considered for a loan.
  • Net operating income: To be sure that you can meet repayment requirements, some lenders look for a total income that’s at least 1.25 times greater than your total expenses.
  • Potential collateral: If you’re applying for a secured business loan, you may need to identify an asset — equipment, inventory or real estate — to back the loan against default. If you’d prefer not to provide collateral, you’ll need to compare unsecured business loans.

It’s no secret that acquiring and securing business loans and finance in London or anywhere else isn’t easy. Want to give your startup the best chance to grow? Ultimately, it comes down to understanding and partnering with Drop Studio.

Our growth consultants are ready and waiting to help you get your funding journey started!