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Category: Finance

Starting your own web design agency is an exciting prospect. Some of the world’s most illustrious agencies started out from nothing more than a bedroom, so if you get yours right you could very well set yourself up for life.

Many entrepreneurs start out with what they’ve got, so work from home, build up a portfolio and work from an ageing computer. This works well while you build a client base, but once you start scaling up your efforts (which can be as simple as outsourcing some aspects of your work, so you can earn more) you’ll find the confines of your home stunt your growth and hold you back.

Sound familiar? It’s time to scale up and have a proper go at this.

Scaling up costs

The first thing you need is office space that gives you room to collaborate with other professionals you either employ or cohabit with. Rent costs money, bonds cost money but your electricity will usually be included. You should budget circa £500 to £800 per calendar month for good office space with access to a meeting room.

Next up, we have equipment. Depending on your preference, you’ll need a Mac or PC, at least two monitors for yourself and genuinely licenced software. Double up equipment for every new employee you take on. Budget circa £600 to £1,500 per new workstation and you won’t be far off the equipment costs to scale up.

Other than that, the overheads for a web design agency are actually very few. You’ll have wages to pay and freelancers to pay, but these are running costs. They can be factored into your balance sheet. Depending on the clients you deal with, your next highest cost might be travel. Travel expenses can rack up because they don’t just include fuel or public transport – they also include food, leisure and overnight stays.

Taking out a loan to scale up

Unless you’re a cash rich web designer, you’ll need some financial assistance to scale up your operation and cover the costs outlined above.

The good news is business loans are available to you as a new freelancer or established entrepreneur. We’ve helped people just like you realise their potential and scale up their agency, be it a content, graphic design or web agency.

A business loan is the fastest way to raise capital. You can borrow from £10,000 to £25,000 unsecured with us. You don’t offer collateral with this type of loan. Instead, it is offered to you based on yours and your business’s creditworthiness.

Making your idea a reality is our bread and butter. If you’ve got a healthy list of happy customers, a good income stream but lack the funds to spend big on the equipment and office space you need, we’re here to help. Our specialist team has helped finance thousands of businesses in the web design industry.

Interested in scaling up your web design agency with a loan? Call us on 01234 240155 or 01234 480157 to speak to our experts today.

You might have heard we do things a little differently around here. We approve most applications we receive, and we don’t overly rely on your credit score to determine if we should lend money to your business.

We shunned computerised systems from the decision process years ago in favour of a personal review. This means we review all new loan applications in person. This ensures you get a fair shake and no weight is given to any particular criteria.

This is the reason why high-street banks say “no” to so many applications. They use a computerised system that chews up and spits out applications if they do not meet a very specific criteria that is both unfair and outdated.

That criteria might be that you don’t have a credit score above 600 points, or that you haven’t lived at your address for at least 3 years.

To banks these are red flags, but to us, they are part and parcel of existing out there. We understand no one is perfect, and that if you are looking to borrow money, there will be a very good reason for that. The bottom line is we want to approve your loan which is why we take the time to review all applications in person.

The process

When you apply for a business loan online with us, we will receive your application within seconds of you pressing submit. It will automatically be handed over to one of our experienced team members, someone who specialises in the type of loan you want to take out or the industry you operate in.

Your loan application will be reviewed by this professional and checked over by another member of the team to ensure we have what we need. A credit check will be performed to establish your credit history and that you are who you say you are.

We will then call you to discuss the loan itself. During this call, we will confirm the details you have provided and ask you if we need anything else. We will discuss a repayment plan with you and setup a plan that works for your business.

We will offer you the loan on the same day you submit your application or within 24-hours of its submission. The decision process happens in 2-hours.

We can help you find the right loan product for your business, be it a standard loan, unsecured funding, secured funding or asset refinance. Our experts are here to help you fund your business the right way.

We approve 98% of all loans, a staggeringly high acceptance rate. Our rate is so high because we help our customers make a solid application as well as understand what they can and cannot afford to take out. As a responsible lender, we take our role seriously and strive to deliver the highest quality services and products.

Interested in applying for a business loan with people who actually care? Call us on 01234 240 155 or email us at hello@ncfplc.co.uk. Thank you.  

In some instances, the only information we need to approve your application for finance is your personal information, including your name, date of birth, address and NI number. This will enable us to run a credit search and confirm you are who you say you are.

This applies to sole traders and partnerships. If there’s more than one director of your business, then we require their information too.

In the case of a limited company including a limited liability partnership, we will need your business information, including your registered company number and registered business address. This will enable us to check with companies house the legitimacy of your business and establish who the directors really are.

Sometimes, we will ask for two or three-months business bank statements. Whether we require these depends on the type of loan and the amount you wish to borrow.

For example, if you are borrowing because of cash flow problems, then we will naturally want to establish if you can repay what you want to borrow. Bank statements are the best tool we have at our disposal to establish this. We will usually ask for bank statements if you want to borrow unsecured or secured for your business.

With this information, we can usually provide a finance decision in two hours and release funds on the same day.

Start-up loans

For start-ups, we have a few more questions because your business won’t have any companies house records or a credit profile.

We will ask to see your business plan and financial projections. We will also want to chat with you about your experience and what your business will do. Think of it as a character assessment. We basically want to know who we are lending to. Providing we’re happy with your experience and drive, we’ll lend to you.

It’s also important to remember that with a start-up loan we will run a credit search on you, the owner or director, and base that information in our decision.

If you have a poor or new credit history, this may affect your ability to take out a business loan. We review applications in person and so offer a fairer decision process than banks. We approve 98% of new business loan applications.

Asset refinance

With asset or equipment refinance the application process is much the same as a standard business loan except less stringent. That’s because the loan itself will be secured against the equipment, providing security for the lender.

In addition to the standard information highlighted above, we will ask for information about the assets such as serial numbers.

A value will be placed on your assets after we have received a full valuation. We can lend you up to 100% of the asset value, allowing you to release lots of cash.

If you’re interested in applying for a loan or refinancing your equipment, call us on 01234 240 155 or email us at hello@ncfplc.co.uk to speak with our team. Thank you.

No one likes paying tax, but it is necessary and your duty to pay HM Revenue & Customs their dues is a legally binding one. It’s also a tough one for many business owners, since paying a tax bill can take a huge chunk out of the bank account. This can create unresolvable cash flow issues and put a business under.

If your business is healthy but doesn’t have the cash to pay its tax bill, a loan could be the right solution. It will inject cash into your business, allowing you to settle the bill and wipe the slate clean. Once HMRC receives payment, that’ll be the end of the matter and you can go back to running your business without worry.

Taking out a loan to pay HMRC is an option you have if you’ll struggle to pay your tax bill this year. It is perfectly legal to finance a tax bill in this way and the predictable monthly payments on such a loan make it an affordable one. Here are some of the situations where you might want to take out a loan to pay HMRC:

Quarterly VAT bill

If you owe VAT to HMRC this must be paid on time. It’s an important obligation for any business that is VAT registered. HMRC will pursue you if you are late paying your VAT bill, so it is important to settle up in a timely manner. We can approve you for a VAT loan fast and release the funds you need within 24-hours. This should then be paid directly to HMRC, thus clearing the bill and wiping the slate clean.

Corporation tax

An untimely or higher-than-expected corporation tax bill has been the end of many a business. If your business is a limited company, you’ll pay tax once a year on profits. This is paid retrospectively, so you will pay last year’s tax this year. If you’ll struggle to pay the bill, we can lend you the money you need. Most businesses need to borrow between £10,000.00 and £20,000.00 to pay their tax bill.

Payroll / PAYE

If you run a business with several employees, wages will be run through payroll under a PAYE scheme. You will receive a PAYE bill from your accountant each year where applicable, but the more pressing issue here is one of paying those wages. Christmas is a particularly stressful time because wages are often brought forward, and bonuses paid. If your business is going to struggle with that, we can lend you what you need.

Unexpected bills

Sometimes, a tax bill comes unexpectedly, and a business is faced with the stressful situation of being unable to pay their rent, rates and pay the taxman. If you’ll struggle to pay your rent or keep your business going because you need to pay a tax bill, we can lend you the money you need to cover your bills. Most of the businesses we lend to seek working capital for this reason. Get in touch if you need the same.

Sprung a business emergency and need funds fast? We approve finance applications in 2-hours and release funds within 24-hours. If you need cash in the bank now there’s no better team to work with than ours.

We offer market-leading interest rates and a same day decision. Many of our customers are approved for a loan inside a working day.

How to apply

To apply for an emergency loan with us, all we need is some basic personal and business information. You can discover what we need and apply here. After you’ve submitted your application, we’ll provide a decision in only 2-hours. If we say yes, then we’ll arrange finance for you and release the funds. Job done.

As part of the process, we may call you. This is just to chat about your experience, what your business will do with the funds and how healthy your business is. It’s a way for us to find out more about the person behind the business.

Borrow what you need

You can borrow £10,000 to £500,000 with us. Most business emergencies such as IT database malfunction and plant equipment breakdown can be handled for less than £20,000. The most important thing is we release funds fast, so you can have confidence in us to get you in funds for when you need it.

As a responsible lender, we will only lend to you if we are sure you can handle it. We don’t lend to businesses in the red or in a state of financial meltdown. We expect our customers to have a handle of their finances. Emergencies can spring up anytime, which is why we are happy to lend to you if this is just a one off.

Have assets? You could refinance them

If you have business owned assets that we’re familiar with such as vans or farm machinery, you could refinance these to release cash into your business. We have a dedicated refinance team, so the application time is very fast. We allow you to release 100% of the valuation of your assets, so if we say your asset’s worth £10k, you can borrow £10k.

With refinance, the agreement works in the same way as a business loan. You repay what you owe plus interest over a term. This is usually 3 to 5 years with refinance. You keep hold of the assets during this time, so they remain deployable in your business. After the finance is repaid, we go our separate ways and ownership passes back to you.

Look out for early repayment charges

Lastly, it’s important to point out emergencies happen, and if you have a healthy business, it stands to reason you’ll have a capability to repay the loan early. Doing so will save you money because you’ll pay less interest overall.

If you want this flexibility, make sure you go with a lender with no early resettlement fees such as us. We don’t charge a fee, which means you’re free to pay off your loan in part or in full to reduce the term and cost of the loan.

When you take out a loan for your business, you borrow a set amount of money over a term. This term dictates the minimum period the lender expects the loan to be repaid by.

For example, if you borrow £20,000 over five years, then the lender expects you to repay the loan in 5-years. To put you on track for that, the lender will create a monthly repayment plan which incorporates the amount you borrow plus interest.

Here’s a working example:

If you borrowed £20,000 over a five-year term with 3.6% interest, this would create a repayment plan of x60 payments of £364.21. The total amount repayable is £21,852.64, so the loan will cost you £1,852.64.

With us, you can borrow over one to five years. We lend sums from £10,000 to £500,000 to start-ups and established businesses alike. We recommend taking out a loan over a term that makes your monthly repayments comfortable.

Simply put, take out a loan over a term that makes repayments affordable for your business based on cashflow. If you are unsure about this, talk to a Chartered accountant to work out the numbers. Their advice is worth its weight in gold.

If it turns out you can’t afford the amount you need over 2-years, borrow it over 3. It will cost you more overall, but your monthly repayments will be lower.

What if I miss repayments?

This is a serious matter. If you miss repayments, this will set your term back. If you don’t communicate with your lender, they may even default your loan. This will have a catastrophic effect on your credit score, so always communicate with your lender who will work with you to bring you back on track. It’s in their best interest as well as yours to ensure the loan is repaid in full by the term agreed.

Early repayments and settlement

The above example applies if you stick out the loan term. However, you can actually reduce the loan term by making early repayments.

Making early repayments reduces the loan term and, in turn, the cost of the loan because you pay interest over that new shorter term.

Some lenders also allow early settlement. This means you can pay off what you owe in full anytime. At Nationwide Corporate Finance, we allow early settlement and we don’t charge any fees for it. This means you are free to pay off your loan without a fee, although we will recover some interest as part of standard practice.

Beware lenders who charge a fee for early settlement. Fees can make early repayment uneconomical compared to sticking out the term. If you are unsure about this ask the lender to clarify their position so you’re in-the-know.

Interested in borrowing £10,000 to £500,000 for your business over one to five years? Talk to our finance team today. Call us on 01234 240155 to get started. We approve applications in 2-hours and release funds on the same day.

Start-ups and new businesses don’t have a credit history, which makes them a riskier proposition to lenders. Lenders use credit history to determine the creditworthiness of the applicant, including how likely they are to keep up with their repayments and whether any issues have arisen with credit in the past.

Without this insight, many lenders just say no, shutting the door on perfectly legitimate and honest business owners who just need a little help.

The good news is you can take out a business loan without credit, but only with certain lenders. High-street banks are an immediate no-no because they use computerised systems that spit out applications that don’t meet their criteria. You’re better off applying with a B2B lender who approves applications in person, like us.

We are a specialist lender to businesses in all stages of their development. We have a great deal of experience helping start-ups and new businesses get the funding they need, even in cases where there’s no credit history to go on whatsoever. If you need a business loan with no credit, speak with our team today by calling 01234 240 155.

Loans with no credit

Getting a loan with no credit is very different to getting one with good or bad credit because by definition, there’s no credit history for the lender to go on.

This means the lender views you as someone with moderate risk.

What this translates to is you can expect a higher entry interest rate on a loan than someone with a history of good credit; and you are unlikely to get the ‘representative’ interest rate a lender advertises. A representative interest rate is an example of the interest rate some customers receive, but it may not be relevant to you.

In your situation, the best thing to do is call the lender and speak with an account manager to get a quote. This will ensure no surprises.

Building up your credit history

One thing all businesses should do is build up their credit profile. This can be achieved in a variety of ways but borrowing money and paying it back is the best way because it creates a pattern of responsible borrowing and repayment.

When it comes time to borrowing again, with a good credit score you’ll find it easier to get approved and more lenders willing to lend to you.

Remember that building up your credit history is a marathon, not a sprint. Your short-term profile is important to a lender to determine your current situation, but your long-term profile is the more important part because it shows responsibility.

Any business that can show a history of responsible borrowing is an attractive proposition to lenders. If you can build up a good credit profile, you can expect a lower interest rate on future loans as a result. Just remember to keep up with your payments as missed payments will destroy the credit score you’ve worked hard to build.

A business loan could be just the ticket to take your business to another level, or just a means to pay wages for the next six months. Whatever the case, loans are a flexible and proven way to raise funds and cash for your business.

How do you get a loan from a lender for a business? Here’s how to get a business loan in five steps – take heed to bag the funding you need:

  1. Pinpoint why you need a loan

When you borrow money it’s for a reason. Pinpointing the reason will help you understand how a loan will help your business and what the pros and cons are. This is one of the crucial stages of getting a loan because it’s the stage of reflection.

  1. Find the right loan

Now that you know why you need a loan, you can find the right loan. There are two types of business loan: secured business loans and unsecured business loans.

The former boasts lower interest rates but requires collateral such as property to secure, the latter has higher interest rates but doesn’t require collateral to secure. Most loans are of the unsecured type, with a borrowing limit of around £25,000.

  1. Find the right lender

We’re a specialist lender to businesses in the United Kingdom. High street banks are usually the first port of call for business owners, but the reality is many get rejected out of hand by the bank they’ve banked with for years. There’s no reward for loyalty with high street banks and you’d be wise to remember that in your search.

Specialist lenders like us are always a sound bet because we lend to start-ups, scale-ups and established businesses alike across all sectors.

  1. See if you qualify for a loan

Don’t apply before checking your eligibility for a loan with the lender. Most lenders have a qualification form on their website (here’s ours). This is free to fill out and checking your eligibility won’t affect your credit score. Only when you apply for a loan is a ‘hard check’ on your credit profile performed. The answer you get back isn’t a guarantee you’ll be approved, but it does offer a good indication a lender likes you.

  1. Get everything ready and apply for the loan

To apply for a business loan with any lender, including us, you will need to provide information about your business and yourself as the director.

We require the names, dates of birth and home addresses for all directors, details about what you plan to do with the loan and a chat about your experience. We have a more personal approach to loans because we like to know who we’re actually lending to. The pro to this for you is a fairer application review.

If your business loan is approved, happy days! We’ll release your funds within hours on the same day. Getting instant cash for your business has never been easier.

As the director of a business you’ll have a unique series of questions about taking out a business loan. In this article, we’ll answer the most common of these to help you decide whether taking out a loan is the right financing option for you.

How much can I borrow?

With us, you can borrow £10,000 to £25,000 unsecured, or £10,000 to £500,000 secured. If you need more, look for outside investment.

Who signs for the loan?

With both unsecured and secured business loans, the person signing for the loan must be the director of the company or the primary shareholder (owner).

In the case of SMEs, this person is usually one in the same but larger companies tend to have a more complex structure. Larger companies tend to sign a loan in their own name, but the director may be asked to provide a personal guarantee. This isn’t always necessary but is common practice for larger amounts.

What criteria must the director meet?

The director who signs for a business loan must be over the age of 18, have a good credit profile, and be a named director with Companies House. They must have a legitimate address in the United Kingdom, traceable through a credit check. This helps the lender verify the director, i.e. determine they are who they say they are.

If more than one director is signing for a loan (not uncommon) then both directors must meet the criteria set out above.

Will I have to provide security?

This depends on the lender and the amount you wish to borrow. We can’t speak for all lenders, but we offer both secured and unsecured business loans.

For a loan amount under £25,000, unsecured funding is typical for a healthy business. For amounts larger than this you may be asked to provide security. This can be offered by you in way of business-owned or director-owned assets.

Who is responsible for making repayments?

The business is responsible for making repayments, unless your loan agreement states the director (or the person who signed for the loan) is responsible. If you sign a personal guarantee to secure the loan, as the director of the company you will be responsible for any repayments in the event the business falters.

Please note this brings its own risks. If you offer your own home as collateral and don’t meet repayments on the loan, your home may be repossessed. If this is a risk too far, consider taking out an unsecured loan.

Will I even be accepted for a business loan?

This is the golden question, and without looking into your individual case we can’t say for certain you’ll be accepted. What we can say, however, is that we review all applications in person so can guarantee a fair decision process.

If you are a new business or your finances aren’t 100%, you should avoid high-street banks because their application criteria is harsh. You’ll be better served by specialist lenders like us because we approve more applications. It’s as simple as that.

Short answer: No, but the interest on the loan is.

Here’s a longer, detailed and more helpful answer to your question:

If you’re weighing up taking out a business loan, one of the questions you might have is whether you can deduct the repayments from your taxable profits to reduce your corporation tax bill. The answer is no, you can’t. Loan repayments are not an allowable expense, so they cannot be deducted from your taxable profits in the same way expenses can. That’s the short of the matter on repayments.

However, the interest on a loan is an allowable expense, so you can deduct the interest paid on a business loan from profits but only if the loan is exclusively for a business purpose, such as buying plant machinery or paying wages.

This means, very simply, that the interest paid on a business loan can be factored into your yearly profit and loss statement as an expense.

If your business has already taken out a loan, you should request a calculation of interest from your loan provider and use this figure as the one on your profit and loss statement to ensure its accuracy. It is tax efficient to include interest as an expense and completely legal to do so. Your accountant would recommend it.

This applies to all types of business finance, including standard business loans, hire purchase agreements, equipment leases and asset refinance.

Another question you might have is whether it’s just the interest or the APR (Annual Percentage Rate) paid that’s tax deductible. The short answer with regard to this is it’s the APR that’s tax deductible, so the interest rate and any fees factored in. This is because the APR on a loan is the true cost of it over a year, and it’s the total cost of the loan that’s tax deductible, which is made up of more than just interest.

Please note that the above information only applies to loans taken out exclusively for business purposes. The loan must be in the business’s name and all repayments must come out of the business’s nominated bank account.

The above information applies to the 2018/19 and 2019/20 tax years. There are no changes on the horizon with regards to it.

Since you’re here, we might as well cover personal loans too.

In the case of a personal loan, HMRC will not let you include interest as a deductible expense from your income tax bill. However, HMRC does allow you to claim a tax relief called HS340 against income tax for interest paid on “qualifying loans”. The specific guidance for this can be found here, but in a nutshell qualifying loans are those that are used to buy shares or assist in the buying of shares. The business must be a close company and the lender cannot own more than 5 per cent of it.

If you found this article helpful, please share it. If you would like to speak with our experts about taking out a business loan, please contact us. Thank you.

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