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By miguel-ingles
- In Uncategorized
It is possible that, when managing a corporation, we would need a capital injection to afford business expansions, reforming the offices, hiring more employees, etc. Asking for loans to banks is the easiest and most safe way to do so. In this article, I will explain how to get bank funding for British companies.
Types of Bank Funding for British Companies
Business Loans
These are the most chosen option for financing asset purchase, expansions or any other thing that the company needs. They consist of a lender that loans an amount of money to a company.
Some entities offer more advantageous conditions for small companies, while others will do the same for enterprises that operate in certain business fields. Therefore, we should investigate which bank would be more beneficial for our specific case. Before accepting a loan, we should check the conditions the entity provides us: the interest rate, how they want us to give back the money, the periods, or if we need to use an asset of the company as security.
In this link, you will find several examples of small companies’ business loans that the bank HSBC has made.
Credit Lines
A credit line is a sum of money that a bank makes available for a person or business. They will be able to withdraw whatever they need during a period of time. After this, they will need to pay some interests, but only of the money they have taken. However, it is usual that the bank also demands them to pay some minimum commissions of the money they have not used.
Steps to Get Bank Funding for British Companies
Commercial Bank Account
To be able to access bank funding, or, if we needed it, public grants and subsidies, it is essential to have a commercial bank account. In addition, it will allow us to separate personal from business economy. As a consequence, we will get a better view of the company’s finances. In this article, I explain how to open one in the UK.
Elaborating a Business Plan to Get Bank Funding for British Companies
It is necessary, especially for attracting venture capital investors or the so-called “business angels”, but it is also important for guaranteeing that a bank grants us funding.
It must be clear and to the point but also convincing. Moreover, it must gather several aspects. The first one is a market research, in which the competence and potential consumers are analysed. The second one, the commercial strategy the company will follow (prices, business’ location, how we will advertise the products, etc.) The third one, how the production process will unfold. At last, we will elaborate an economic study of the company looking into the next 3 or 5 years. In addition, at the start of the plan, we will gather all these contents into a summary.
Other Requisites
Banks will require us to give them some data about the loan. They will ask how much money we need, the windows to give back the loan, the reason why we are asking for a capital injection and how will we return the money. If we want to get a credit line, we will also tell them how much time we want to count with it.
Other Information
Apart from the business plan and the previous requisites, they will also ask us to inform them about other aspects of the company, such as the details of its finances, its credit history, the assets and liabilities it has or the business activity in which it operates.
Filing the Application
Once we have all the documents prepared, we must complete the forms the bank requires us to do. This process can be done online or in-person. It will depend on the bank. When we have filed the application, the entity will evaluate it. They will analyse, according to the documentation we have sent, if we have the ability of returning the loan.
We must know that this process can take days or even weeks, so, if we need the funds urgently, we should seek for another way of funding.
Rejected Application
If the bank has rejected the application, they will explain why they have done so and which services they can offer to us. Depending on their explanation, we can solve the problems and file it again or trying with another bank.