4 good reasons to get a business loan

Commercial banks and credit unions give small loans to small businesses. Business loans can be given using inventory or accounts receivable as collateral.

There can be several reasons why a company may want to take out a business loan. For instance, you may need a business loan to invest in equipment, start a new branch, and maintain business operations. Business loans are not just beneficial for escalating businesses, but they are also easy to obtain as there is a multitude of licensed money lenders who are willing to lend money to businesses having a stable income, a decent business plan, and a credit score of 720 or higher. However, the major advantage of a business loan is that it allows you to increase working capital and expand the business. Thus the loan can be paid back through the income generated from expanding the business.

Here is a rundown of some good reasons to get a business loan.

1.     Manage Working Capital:

Business loans are greatly beneficial in meeting working capital requirements and expanding the business. It helps to maintain the cash flow during the tough economic times. During the financial instability, business loans can help strengthen the financial situation of your business. Moreover, a business loan is usually lent to a corporate entity and not the business owner himself, which means the loan will not have to be paid by the business owner in the event of loan default. That’s why many business owners take advantage of the business loan. The business liquidation helps to pay back part (sometimes all) of the loan in case of failure. You can also get a business loan at www.smartloan.sg.

2.      To Expand Operations:

There are cases when companies need a business loan to finance their big move. While expanding your business operations, the change in overhead and up-front cost can be significant. Moreover, banks are likely to loan funds to firms that want to purchase real estate to expand their operations. If a firm wants to expand, it means it has been successful at its business and has the potential to generate revenue from its expansion. That’s because the firm is already turning a profit and a positive cash flow and making a positive forecast for the future. A licensed money lender can also give a business loan for real estate in the form of a mortgage. Real estate is usually used as collateral in term loans.

3.     To Purchase Equipment:

Purchasing equipment that can improve your business offering and productivity is a good reason to get a business loan. You need certain equipment, machinery, or other IT tools to give service or make your product. You may need a loan from a licensed money lender to purchase that equipment. The equipment itself serves as collateral for a business loan. But you must do a cost-benefit analysis before applying for a Smart Loan application to analyze whether it can prove to be the best investment for your business.

4.     To purchase Inventory:

Small businesses also take out business loans from banks to purchase inventory. Some small businesses and retail businesses are seasonal in nature. For instance, if your business makes most of its sales in the winter season, you’ll want to purchase most of your inventory before the winter season. And for that, you need more cash on hand, and a business loan can help you replenish your inventory with plentiful and high-quality options. Business loans to purchase inventory are usually short-term in nature that can be paid back after the seasonal sales.

RBS provides loan victims new route to compensation

Business owners who claim they were mis-sold taxpayer-backed loans by Royal Bank of Scotland will be given a new route to ask for compensation.

The Financial Conduct Authority has said that it expects eligible companies that allege they were misled into taking an Enterprise Finance Guarantee loan to be able to use the business banking resolution service, which is being established to give firms another way of settling financial disputes.

RBS has already run its own compensation process for the loans, but the regulator believes that some complaints may need to be reconsidered.

There had been an expectation among the seven big banks taking part in the initiative that people who had been through previous redress schemes would not be able to use the new resolution service to ask for a fresh view on their complaint.

The Enterprise Finance Guarantee was set up to give lenders confidence to support viable small companies that lacked the security to get a conventional loan. It has underwritten more than £3.25 billion of credit to tens of thousands of small companies. The scheme provides a government guarantee to the lender covering 75 per cent of the debt. Crucially, this is solely for the benefit of banks, not borrowers, but RBS misled some owners of small companies by suggesting that they would be liable for 25 per cent of the loan at most and that the state would cover the rest.

In 2015 the bank admitted that it had mis-sold the loans and paid back £4.7 million it had wrongfully claimed from the government and £3.5 million to affected customers, or to their guarantors or insolvent estates.

The regulator did not say why it thought the complaints should be reconsidered, although RBS’s compensation scheme has been contentious.

It is understood that the FCA does not anticipate a wholesale rerun of every complaint, but people who can produce evidence that the outcome of their past redress decision was not fair may be able to get a fresh verdict.

The FCA also wants thousands of business owners who claim they were mis-sold business loans by Clydesdale to be able to use the banking resolution service. The loans were embedded with complex interest rate swaps, which left companies facing ruinously high costs when rates fell during the financial crisis. Clydesdale, which is due to be rebranded as Virgin Money, had already conducted its own redress review and has settled some complaints.

Ian Lightbody, a campaigner for people who say that their businesses were wrecked by tailored loans, said: “I’m pleased mis-selling victims will have another route for redress, but we are not waiting around. We are currently securing finance for legal action.”

The resolution service is due to be launched this year, but small business representatives who are helping the banking industry set it up have threatened to withdraw their support unless access is widened.

Things to keep in mind when financing for a property

Buying property can be a very hectic task as it involves many different elements that should be kept in mind.

On paper, the process might look straightforward, but in reality, it involves a lot of stuff that you might not be familiar with. Before actually looking for a financer, you need to do a lot of research work and invest some time it. I have compiled together a few ideas that will create a basic mind map and help you choose a suitable financer.

Think Smartly

The outcome of any result highly depends on the time you have spent studying it. It’s better to do thorough research about a subject instead of regretting your decision in the future.  Your research needs to involve all the essential aspects such as the locality of the property, its importance in the coming future, and most importantly, the terms at which you are getting your funds or loans. You will be able to calculate if you are getting your money’s worth by keeping these things in mind.

Selecting the Right Loan or Mortgage

Buying property is not cheap. Most of the properties cost more than a person earns in a year, and require loans to cover the expense. The next step is choosing a loan that best meets your needs.

1.    Bridging Loans

Bridging loans leverage your current investment properties and give you cash. It is particularly beneficial when you need to buy a property in a short period. The most important thing to look for is the best possible deal. Property Finance Partners – Bridging Loans offers one of the lowest rates in the market and provide very helpful guidance.

2.    Private Lending

Privately lending money is becoming more and more popular because of the recent awareness programs. Private lending is finding individuals that will lend you money rather than going to banks or funding firms. The only thing that concerns most people is the trust that an investor and a lender have to put in each other.

3.    Mini-Perm Loans

These are medium-term loans needed to renovate a property or acquire an apartment. These loans have a high-interest rate and are used as a sub-let until better term loans can be secured.

Finding the Right People

The most important step is choosing a financer who is best in the business and trustworthy. Someone who will put your interests before theirs, get you the best possible deals you can imagine. You need a financer who has a team qualified enough to look into all intricate details which can be easily overlooked otherwise. They might also help you by creating a profitability study which will give you an overall idea of how successful your venture will turn out to be.

In the venture of being a real estate developer, you will be indebted to a lot of people for their help and resources. Instead of getting tangled up with the wrong company, choose someone who truly cares for you. You can click the Property Finance Partner website, one of the most respected firm, to get in touch with its team. Don’t let someone inexperienced handle your property. A good financing group at your side can help you become a successful real estate developer in no time.

Metro Bank plans £500m sale of loan book to private equity firm

Metro Bank is beefing up its senior management and preparing to sell a £500 million portfolio of mortgages to restore confidence among investors.

The struggling lender is set to sell the portfolio, which is thought to be mainly made up of loans to landlords, to Cerberus Capital Management, the private equity firm.

Shares in Metro bounced 27¾p to close at 500p on the news, which comes two days before it reports its results for the first half of the year. Sky News first reported the talks with Cerberus.

Metro announced two appointments to its executive committee yesterday. Daniel Frumkin, a Briton has who worked at Royal Bank of Scotland, Northern Rock and, most recently, the Bermuda-based Butterfield Bank, will join as chief transformation officer with a brief of improving efficiency and customers’ experience. Cheryl Newton, a Canadian technology specialist who has worked for banks including JP Morgan and Lloyds, will become chief information officer. Both are 55.

The bank is searching for one or more new directors to join its board. Critics are pressing for Metro to replace Vernon Hill as its chairman.

Metro was set up by Mr Hill, 73, in 2010, winning the first new banking licence in the UK in more than 100 years. It now has 67 branches, 1.7 million customers and a £22 billion balance sheet, built on its customer-friendly model of seven-day opening and high service levels. At its peak in spring last year, Metro was worth £3.5 billion.

However, it has been struggling with scepticism about its business model and criticism of its corporate governance. It shocked the stock market in January by revealing that it had wrongly assessed loans to companies and landlords, requiring it to increase its risk-weighted assets by £900 million and to hold more capital than it had expected.

Metro has lost four fifths of its value from its £3.5 billion peak in March last year. The London-based lender raised £375 million in May at £5 a share, but last week dipped below that level.

The bank yesterday confirmed that “discussions regarding the potential sale of a loan portfolio are taking place”. Metro did not give details of what loans it is in talks to sell. John Cronin, an analyst at Goodbody, the broker, said they were likely to be among those whose riskiness was underestimated.

Metro appears to be unwinding part of two earlier deals where it bought assets from Cerberus for £1.1 billion.

Selling all the miscategorised loans at their face value of about £1.6 billion would increase its core equity tier 1 capital, a key measure of financial strength, by 2.4 per cent, Mr Cronin said.

Analysts at Exane BNP Paribas said Metro could also free up capital by securitising about £2 billion of its loan book, but both moves would reduce revenues and profitability.

‘Bank on Dave’ moves step closer to realising dream of being first UK-owned High Street bank in 120 years

Business champion Burnley Savings and Loans Limited (“BSAL”), also known as “Bank on Dave!”, has taken another step towards becoming the first UK owned high-street bank in 120 years and today are announcing a £2.5 million funding round on equity crowdfunding platform Seedrs.

BSAL was established in 2011 by local millionaire businessman Dave Fishwick in the wake of the financial crash and the devastation it left across the North of England.  As a man passionate about his hometown of Burnley, Dave wanted to set up his own business in Lancashire to help inject much-needed support into local community and businesses, and to prove that financial service providers can be socially responsible.

BSAL seeks to respond to the significant market need from SMEs and individuals who may have difficulty or are unable to access credit from mainstream high street financial companies. One of the driving aims of the Company is to lend responsibly, therefore providing the customer with greater opportunity to control their debt, which in turn will help support an improved credit rating in the future.

Over the past 7 years, the Company has seen that customers seeking a modest loan may in the future turn into a customer that wishes to borrow a much larger amount to support their business’s growth, therefore creating a compelling ‘feeder’ acquisition strategy for the Company. 

Dave wants to put the trust, ethics and best-practice back into banking, treating customers as individuals and valued clients. Creating a bank that is an institution from the community, for the community.  

Having already lent nearly £20 million to over 3,000 qualifying borrowers across the UK, the Company is now seeking to grow its reach by becoming an authorised UK bank, which will be called “Bank of Dave”. To do achieve this, BSAL is launching their fundraising round on Seedrs to support the procurement of the IT systems needed in preparation for its bank license application. 

Burnley Savings and Loans Founder, Dave Fishwick said: “The core vision for Bank of Dave is to be the ethical choice provider of loans and savings products to honest hard-working families, helping every generation to grow their business and to save for the future.

We have had brilliant few years acting as a savings and loans provider, but the opportunity to become a fully authorised UK bank will expand our horizons even further, enabling us to help more people around the UK.

We are delighted to be launching our first ever funding round on Seedrs, giving our hundreds of thousands of amazing supporters a chance to share in the first new UK-owned high street bank in over a century.”

CEO James Bradley commented: “We are going through the authorisation process to become a bank and are advancing towards our goal of becoming an authorised UK bank. We continue to witness a real market demand for financial providers that offer essential banking services to customers that traditionally found it difficult or have been unable to access affordable credit. We are confident that once fully authorised that the Bank of Dave will be the bank that delivers this capability.”

For more information, visit: www.seedrs.com/bankondave