Small Business Loans
 

Small Business Loans

Small Business Loans

The Government introduced the Small Firms Loan Guarantee Scheme (SFLGS) backed by the DTI. It is designed to help small businesses fund sustainable growth when other borrowing options are not available either through lack of a track record or security.

Commercial Loans

In the context of the invoice factoring and invoice discounting industry there are occasions when a factoring or invoice discounting facility is not enough to provide all the funds a small business needs to achieve its plans. A commercial loan in the guise of a small business loan can be used in combination with the invoice discounting facility by providing a term loan under the Small Firms Loan Guarantee Scheme.

Lines of credit for new businesses

The small business loans scheme provides valuable lines of credit for new businesses as well as being available to most companies with up to 200 employees including:

  • Manufacturers having a turnover up to £3m
  • Distributors, service providers and other non-manufacturers with a turnover of no more than £3m.

Loans cannot be provided however, to buy out members of a partnership, finance interest payments or buy company shares. However, from 1st April 2003 coverage is expanded by removing sector exclusions for retailing, catering, hairdressing, house and estate agents, libraries, museums and cultural activities, motor vehicle repair and servicing, steel and travel agents.

How much can I borrow?

Small business loansUp to £250,000 is available to assist with the following purposes:

  • Expansion and Growth
  • Investment in plant and machinery
  • Acquiring new business equipment
  • Project development costs
  • Improving operational efficiency

If you have been trading for less than two years you can borrow from £5,000 to £100,000. A company that has been trading for more that two years can borrow up to £250,000.

Terms and Conditions

  • Loans are re-payable over 2-5 years
  • Repayments are made either monthly or quarterly
  • For loans over £15,000 it may be possible to defer repayments for up to two years
  • Security will be required in the form of business assets such as machinery or property

Borrowing costs comprise:

  1. Loans are re-payable over 2-5 years
  2. Repayments are made either monthly or quarterly
  3. For loans over £15,000 it may be possible to defer repayments for up to two years
  4. Security will be required in the form of business assets such as machinery or property
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