Are commercial loans easy to get?

Join the Esme team to find out how choosing the right type of loan and lender could increase your chances of securing a business loan.

A commercial loan, also referred to as a business loan, is a convenient and effective way for a business to obtain finance for any future and current ventures.

Getting a commercial loan depends on the type of loan and lender you choose, as well as the financial health of your business.

Choosing the right commercial loan and lender

Commercial loans fall into one of two categories – a secured or unsecured loan.

Secured loans VS unsecured loans

What’s a secured loan?

A secured loan is when the borrower provides an asset, such as a piece of equipment, a vehicle or property as security in case repayments are not made.

A secured loan generally allows you to borrow larger amounts as the lender is confident they will be repaid through either the monthly repayments or with the value of the asset the loan is secured against. Interest rates may also be slightly lower on secured loans as the lender is taking a reduced financial risk.

If repayments are not maintained, the asset could be seized by the lender.

What’s an unsecured loan?

An unsecured loan is when a business asset is not required, as the loan is issued on the basis of eligibility, creditworthiness and affordability calculations.

An unsecured loan is particularly useful for a business looking for quick capital, as the application process is often simpler. It’s also beneficial for businesses who may not have assets or who do not want to use them as security.

A personal guarantee is usually required as security - this is when an individual, normally the owner or one of the directors of the business, is liable for any repayments in case the business is unable to make them.

Bank VS online lender

There are two main types of lender available to businesses who are looking for a commercial loan.

Bank loan

A bank loan is provided by a bank, rather than an investor or an online lender. Unsecured loan amounts available vary a lot, but normally small businesses are offered a range from £1,000 up to £100,000 and can usually be repaid over a period of 1 to 10 years.

Interest rates could be slightly lower and with many banks you can choose between a fixed or variable rate.

Getting a bank loan might take a long time from initial application to receiving the funds. The application process itself is can be more time consuming than with an online lender. Bear this in mind if you’re looking for the easiest and quickest way to source finance.

Online lender

An online lender can usually offer the same loan services as banks, usually with the benefit of a quick application process, with many lenders transferring funds in a matter of days after approving an application.

An online business loan is particularly useful for business owners who may not have the time or resources to endure a lengthy application process. It’s also beneficial for businesses looking for a quick injection of cash.

What can Esme offer my business?

At Esme, we offer online commercial loans ranging from £10,000* to £150,000, repayable between a 1 year and 5 year time period.

Our loans are unsecured; we only ask for a personal guarantee.

We’ve also worked hard to ensure our application can be completed in just 10 minutes so it’s perfect for even the busiest of business owners. Simply fill in our online application form, select the amount you need and the time period in which you’re seeking to repay it.

If your application is approved and you’ve reviewed the terms and conditions, we can transfer the funds within an hour.

 

To give you an idea of how much your monthly repayments could be, try our business loan calculator. You can also apply for a business loan with Esme using our easy ten minute application form.

* From £25,500 for Sole Traders

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