In the current harsh business climate it is hard to believe that now may possibly be the best time to secure a government business loan, but there may actually be the case. The reason for this is that the government has agreed to back over £20 billion in loans to small businesses of all kinds to assist them in getting through these difficult financial times.
The government will back business loans by guaranteeing the lender that they will be repaid should the business be unable to fulfill its financial obligations as set out in the government business loan agreement.
Many existing and new small businesses currently need cash in order to expand their business or simply to survive the credit crunch conditions. There are various small business schemes available some of which take the form of grants issued by the government and local authorities in order to support small businesses around the country.
These grants can be highly effective in that they may offer an extremely low interest rate or may not have to be repaid at all. The disadvantage is that these grants could take a considerable amount of paperwork and time before the cash actually reaches the company bank account.
So it is always necessary to way the pros and cons and consider whether it is worthwhile to wait to obtain grants for if a company should push on with a much easier and faster to acquire government business loan.
These loans are fairly easy to put in place as the banks are happy to give them out to business clients as their financial risk is extremely negligible, as previously mentioned if the business were unable to repay the principal and interest for some reason then the bank would be repaid by the government from its own coffers.
As such it is perfectly practical to have the cash in your bank from a financial institution in a matter of weeks or even days depending on your company’s standing including aspects such as viability and credit worthiness.