Top Sources of Finance for your Business

Savvy-business people know that you need adequate finance to be able to achieve your short and long-term goals. If you want to start your own coffee café or expand an existing one, you need to discover the most viable sources of finance. If you are worried about where you can find the cheapest loans to buy ELD devices for your fleet of commercial vehicles, you still need this.

For secure and affordable ELD devices, you need to visit this site, https://www.geoted.org/ and then consider whether you need a loan. Whether you want to finance your coffee café or your electronic logging devices, here is a comprehensive list of the chief sources of business finance that you should never ignore.

Loan Stock

This option is becoming increasingly popular today among some business people. This particular debt capital is best for established companies that can make agreements with investors to give them long-term loans.

Your company will have to pay interest on this loan. Some popular forms of loan stock out there debentures. In this case, the two parties put down in writing an agreement that states the exact amount the company owes. It provides other terms such as the percentage interest as well as the anticipated amount to be paid.

The main reason you will likely find this option highly attractive is that it is relatively cheap. Your company will not have to worry about the corporation tax that you will be charged given that you will earn some interest. Besides, this is a long-term loan.

However, it is important to note that if you are new to business or have some internal issues, loan stock may not be the best option for you. Investors want to be sure you will safely take care of their money for 10 or more years.

Bank Lending

Many traders argue that bank lending is the cheapest source of finance. You can use this method to get short-term loans. Banks are often willing to grant loans for up to three years. However, in a few instances, you can also get medium-term loans from them. So, if you want to take a loan that you can take a repay between 3 and 10 years, you can try them too. This will depend on the size of your café or fleet.

Before you get the loan, your bank will consider several factors. The key ones are the purpose of the loan, security, amount that you require, the repayment terms, and your ability to pay. Create a viable business plan to increase your chances of winning the heart of your lender. Otherwise, they may deny you the loan or ask you to pay higher interests than others.

Anyone can reap the benefits of bank lending. This is the reason it is a great option for you despite your present status. Once you are sure you have all that it takes to have the loan, you are free to take your first application step. Nevertheless, you should note that if you do not meet the strict requirements of your bank, you would not get the loan.

Hire Purchase

You can also use hire purchase to buy important equipment for your business. It might be easy to think that large companies can buy ELD devices without asking for the support of another organization. That is far from the truth. Companies and individuals have diverse financial needs, and there can come a time when hire purchase is the only solution.

In this case, all you do is pay an agreed amount as a deposit and settle the rest in installments. You should demonstrate that you are trustworthy before you use this source.

The main benefit of this mode is that you will begin to use your devices or equipment before you fully settle the amount.

Peer-to-Peer Lending

Peer-to-peer lending is presently the best option for small and medium-sized businesses. You go online and find several lenders who are willing to finance your request. It is highly convenient, as you can get the amount instantly.

Since you are dealing directly with your lender, you will not pay for unnecessary hidden charges. This way, you will agree with your lenders without the interference of third parties.

This option is also highly attractive since you do not have to provide collateral. If you have a high credit score, you will not only get your loan within no time but also enjoy an incredibly low-interest rate. In this regard, if you do not qualify for the traditional types of loans, this one gives you a perfect chance to secure a substantial amount of money.

Bottom Line

There are several credible sources of business finance. But that does not mean all of them are best for you. If you want to finance your coffee café or buy the right ELD devices, consider your unique business condition before you take the next step.