Bank loans for start up businessDespite the generally gloomy news that the media circulate, all high street banks are willing to lend money to start ups. In fact, it’s easy to forget that lending money is one of the reasons that they are in business!
Even though there is money to lend, and a variety of government and bank led initiatives (such as Funding for Lending, Enterprise Finance Guarantee Scheme, and various industry funds), it’s important to approach the bank in a professional and knowledgeable fashion. Make sure that you fully understand the detail of your business plan, and can answer any questions confidently and consistently.
As a rule of thumb at the time of publishing, banks will typically meet 50% of the funding requirement for a general start up, and some banks in the franchising sector will extend to 70% for a recognised, established franchise. There are usually arrangement fees in addition to interest, and you must also consider any covenants (restrictions and/or requirements) that might be placed on you whilst the facility is in place.