Understanding loans for limited companies (ltd’s)


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.



Article Contents


  1. What is a Limited Company Loan?
  2. How do they work?
  3. Who can apply?
  4. What should you know?
  5. Limited Company Loans For Any Purpose
  6. Limited Company Loans application process
  7. How do you qualify?
  8. Is security required?
  9. Making repayments on a limited company loan
  10. Find the right loan for you



What is a Limited Company Loan?


Business Owner


A Limited Company Loan is a loan provided to a Limited Company. A Limited Company refers to the legal structure of business operations – whereby 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. The alternative is 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.



How do they work?


Cafe Owner


Limited Company small business loans work very simply. Your loan provider will seek the relevant details from you to build up a financial portrait of your business. This may include your recent financial history, the nature of your card payments (if you handle them), and for how long you have been in business. With this information they’ll determine your ability to make your repayments. In certain circumstances you may also need to provide proof of your company’s financial forecast, to give an indication of your future projected finances. This is usually only the case with longer term loans, however.



Who can apply?




There are a number of loans for Limited Companies available in 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.



What should you know?


Business Owner


The key benefit of Limited 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't keep up to date or accurate documentation.



Limited Company Loans For Any Purpose



There may be a variety of reasons that you need to take out a limited company 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 £150,000 from Capify.



Limited Company Loans application process


We Are Open Sign


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.



How do you qualify?


Working on laptop


The majority of business loans require you to have been in business for a certain period of time. For example, applying for Limited Company small business loans might see you needing to have been in business for over six months, with a demonstrable turnover in excess of £60,000. There may be specific loans available for new businesses, if you have not been in business for long. Before qualifying you will also have to show documented proof of being a Limited Company, which would come in the form of authentication from Companies House.



Is security required?


Business Meeting


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.



Making repayments on a limited company loan


Business Owner


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 anytime 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 the right loan for you


Use our Limited Company loan calculator below to determine the best loan for your business.



Raise £3,500 to over £150,000 for your small business

Capify offers flexible finance with simple repayments. There are no massive monthly Direct Debits to think about, just small manageable payments that are easy to keep track of.

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