Growing businesses often need funding to expand operations, invest in stock, hire staff, or open new locations. Business loans can provide the working capital you need to achieve your goals. With a wide variety of options available, it’s essential to choose the right loan for your specific needs and ensure you can afford the repayments, including interest.

Our Elan Business Group Ltd business loan calculator offers an indicative estimate for loans with fixed monthly repayments and a set term. However, every business is unique, and loan terms vary based on the lender and product.

While term loans are popular, there are other business finance options not covered by our calculator, such as:

• Revenue-based loans: Repaid as a percentage of revenue (e.g., merchant cash advances).

• Revolving credit facilities: Overdraft alternatives for flexible borrowing.

• Asset finance: Leasing equipment or vehicles.

• Invoice finance/factoring: Advance payments based on outstanding invoices.

A loan’s term refers to the time it takes to repay the borrowed amount and interest through regular monthly instalments. Loan terms can vary based on the type and amount of financing:

• Invoice finance: 1 to 3 months.

• Short-term loans: 3 to 24 months.

• Asset finance: 1 to 5 years.

• Business lines of credit: 6 months to 5 years.

The interest rate is the cost of borrowing, calculated as a percentage of the loan balance. It’s added to the principal amount (the original loan). Interest rates depend on several factors:

• Loan term and amount.

• Your business and personal credit history.

• The lender’s assessment of risk.

Even with less-than-perfect credit, alternative lenders may offer competitive business loan options.

Lenders evaluate various factors to determine your eligibility:

1. Profit and turnover: Your business's financial performance.

2. Credit history: Both personal and business credit profiles.

3. Loan term: The length of the loan impacts eligibility and rates.

For secured loans, you’ll need to offer assets like property, vehicles, or machinery as collateral. Unsecured loans often require a personal guarantee, though some products, like merchant cash advances, may not require security.

Important: If you fail to meet repayment terms, any assets used as security may be at risk.

Having the right documentation ready can streamline the application process. Lenders may request:

• Proof of ID and address: To meet Know Your Customer (KYC) requirements.

• Business bank statements: To verify income and expenses.

• Financial accounts: Detailed financial performance for the year.

• VAT returns: Typically updated every three months.

• Company directors and financiers: Contact details of key stakeholders.

Additional requirements may include a business plan or insurance documentation, depending on the lender.