Understanding Loans for Limited Companies

Understanding Limited Company loans is essential to finding the right deal for you. There are a wide variety of Limited Company business loans out there, so knowing the basics will put you a prime position to find the best loan for your business.

Many directors have concerns about the idea of applying for limited company loans. They may believe that it is a tiring, time-consuming and frustrating process that involves a lot of credit checks and paperwork.

However, the traditional idea of a Ltd company loan from the bank is something of the past, as new, alternative and refreshing methods of finance are now benefiting more and more businesses across the UK.

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<h1>Understanding Loans for Limited Companies<h1/>
What is a Limited Company Loan?

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What is a Limited Company Loan?

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What is a Limited Company Loan?

There are 4.2 million limited companies currently registered in the UK. A Limited Company refers to the legal structure of business operations – the management (directors) are distinct from the owners (share-holders). This is a specific legal definition, and you must be registered with Companies House in order to be recognised as a Limited Company. Every Limited Company has its own individual number and SIC code to identify it, as well as articles of association, which set the rules directors and officers need to follow while running the business.

The alternative is running a business as a Sole Trader, where the business is owned and operated by the same self-employed person. It’s important to note that these definitions refer only to the structure of the business, and both Sole Traders and Limited Companies can have employees.

It’s simple to form and register a Limited Company with Companies House. There’s a step by step guide on Gov.uk, including who to register as directors, what records you’ll need to keep and how much it costs. You can also learn about loans to sole traders here.

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Limited Company Loans For Any Purpose

There may be a variety of reasons that you need to take out a limited company business loan. You may be expected to cover a large and unexpected bill, or on the other hand you may want to invest in a lucrative business opportunity which will require some capital to get behind the plan. Whatever your reason for needing the finance, you could be advanced anything up to £500,000 from Capify.

Limited Company Loans Application Process

The process of applying for this particular loan is very straightforward. Capify believe in having an easy-to-use and transparent finance solution. This means that there are no mountains of paperwork or in person meetings to attend. You can simply apply online using the quick and easy application form.

Is Security Required?

There’s no complete answer as all loans are different – check with the loan company you’re considering to make sure the loan you’re contemplating is secured or unsecured. Many Limited Company loans are unsecured, which means you won’t have to put up any sort of security or find a guarantor before qualifying – providing you meet the other criteria for Limited Company loan eligibility.

<h3>Limited Company Loans: What Should You Know?<h3/>

Limited Company Loans: What Should You Know?

The key benefit of Ltd Company loans is that as a Limited Company you’re automatically viewed as less of a liability than a Sole Trader would be. This means that you could qualify to borrow a larger amount of money over a longer period of time. The drawback is that you might be required to provide much more detailed information to your loan provider during the consultation process to allow them to get the best possible view of your company’s financial situation. This could be an issue if you don&#39;t keep up to date or accurate documentation.

Who Can Apply For a Limited Company Loan?

There are a number of loans for Limited Companies of all sizes. It doesn’t matter what the business is, the products you sell, or the service that you provide – what matters is that you have registered as a Limited Company. It’s essential that you’re able to provide proper documentation, from Companies House, indicating that you are a fully registered and recognised Limited Company. You could qualify for a Capify limited company loan if:

  • Your business is registered as a Limited Company.
  • Your business has been trading for 12 months.
  • Your turnover averages £10,000 per month.
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Raise £3,500 to Over £500,000 For Your Small Business

<h4>What are the advantages and benefits?<h4>

What are the advantages and benefits?

When businesses are able to obtain secured small business loans they can benefit from relatively low interest rates. As lenders have an interest in business assets and can seize them if the loan isn’t repaid, this type of lending is typically less risky for them. Due to this, lenders are often willing to lend with more flexible repayment terms and with lower interest rates. Overall, this means businesses may benefit from paying less interest on a secured loan and, therefore, reducing their outgoings over the lifetime of the loan.

What Businesses Qualify?

Almost any type of business can qualify for a secured loan, providing they have the assets to offer as collateral. Lenders are generally more interested in the capital, assets and revenue of a company, rather than the industry in which they operate.

Many lenders will only offer secured small business loans to companies which have traded for a certain amount of time, although this varies between loan providers. Similarly, some lenders may stipulate that businesses must have a certain level of revenue before they qualify for a secured loan.

However, lenders have additional security due to the secured nature of the loan so businesses may be able to access more flexible terms, providing they have the appropriate amount of collateral in the business.

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Who Can I Use a Secured Business Loan For?

Business loans can be used for a range of purposes but they’re commonly used to expand or grow the business in some way. If you want to open a new branch in a new location or purchase new equipment to increase production, for example, a secured small business loan can provide the funding you need upfront and enable you to pay it back in regular instalments.

Perhaps you want to launch a viral marketing campaign, refurbish your premises or need to undertake urgent repairs? If so, a secured small business loan could provide the capital you need to keep your company operational and allow you to increase your revenue in the long-term. Designed to facilitate business growth and expansion, a secured small business loan can be used to achieve your corporate objectives and business ambitions.

Of course, lenders may ask for specific details about your intentions when you apply for a secured small business loan and your business plan may affect the success of your loan application. If the lender considers your business objective to be viable, for example, they may be more likely to offer you a loan.

Whilst secured small business loans can be used in numerous ways, there may be restrictions or limitations within your loan agreement. If so, you’ll only be able to use the funds in accordance with your contract or loan agreement.

Raise £3,500 to Over £500,000 For Your Small Business

What Businesses Qualify?

Almost any type of business can qualify for a secured loan, providing they have the assets to offer as collateral. Lenders are generally more interested in the capital, assets and revenue of a company, rather than the industry in which they operate.

Many lenders will only offer secured small business loans to companies which have traded for a certain amount of time, although this varies between loan providers. Similarly, some lenders may stipulate that businesses must have a certain level of revenue before they qualify for a secured loan.

However, lenders have additional security due to the secured nature of the loan so businesses may be able to access more flexible terms, providing they have the appropriate amount of collateral in the business.

What can I Secure Against One?

In order to obtain a secured small business loan, the business must own assets in some form.

Of course, the assets needed will depend on the size of the loan. If you wish to borrow £10,000, for example, a lender may accept fairly modest assets, such as a selection of company equipment which meets this value. Alternatively, a secured loan of £100,000 will only be provided if the business has assets worth this amount. In such cases, business properties, vehicles and plant machinery are often used to secure the loan.

If the business does not own enough assets to obtain a secure small business loan, loan providers may still be willing to lend if the company director or directors offer a personal guarantee. This means that their personal assets, such as their home, can be used as collateral in order to obtain a secured small business loan.

Do Capify Offer Secured Business Loans?" alt="Do Capify Offer Secured Business Loans?">

Do Capify Offer Secured Business Loans?

Capify specialise in business funding and we can help you to obtain the right type of finance for your business. Offering both unsecured business loans and merchant cash advances, our financing options provide a workable alternative to traditional secured loans.

Available to all types of businesses, Capify business loans are perfect for limited companies with at least 6 months of trading history. Whilst you may not have the assets to obtain a secure small business loan, a Capify business loan will ensure you can access much-needed working capital and grow your business accordingly.

Alternatively, a Capify merchant cash advance offers increased flexibility to small businesses.

Aimed at companies which accept debit and credit card payments, a merchant cash advance allows you to access the funds you need and allows you to make repayments via a percentage of your daily card payments. With no collateral required, a merchant cash advance is available to a wide variety of businesses and ensures companies can access the capital they need, regardless of their size.

To find out how much funding you could obtain, why not try our small business loan calculator now?

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Making Repayments On a Limited Company Loan

Repaying this kind of loan is also a straightforward process. Your repayment schedule is calculated on a daily automatic basis, which means that small amounts of money are taken out of your chosen business bank account each day.

The consequence of this is that you will not need to worry about large, lump sum monthly repayments or late fees.

If at any time you feel that you need more money, as long as you are able to meet certain conditions then you could be eligible to extend the loan even further if a certain percentage of the original has been repaid.

Find Out How Much You Can Raise 

Grow your Limited Company now. Use our Limited Company loan calculator to find out how much you could raise, and which type of finance will work best for your business.

Making Repayments On a Limited Company Loan

Our Unsecured Business Loan Calculator

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