First the question:

Business loans have to battle with government grants, which cost nothing to the entrepreneur. For entrepreneurs who want not to use external sources of finance, they can retain a chunk of profits to be introduced into business. Again, remember that the entrepreneur has to shell nothing in terms of cost. Hence, business loan has a tough competition. Therefore, for business loan, it is not only optional but also crucial to be available at low rate of interest.

Same is pretty much the case with retained profits. It is a hard decision to make on the use of profits. There is plenty of stakeholders of profit. The decision to reap profits into business will be made mainly at the cost of these stakeholders.

Low rate business loan differ from these types of finance in the sense that it is available as and when the entrepreneur desires. There are lots of banks and financial institutions operating in the UK, which may be approached for a business loan. In case if the details mentioned by the entrepreneur in his application form are genuine then he will be approved for loan within a few days of application. Therefore, the use of business loans will often be less complex.

You can easily see that government grants and retained profits are available at little or no cost. Therefore how does a business loan compete with these A business loan battle with these sources of finance in terms of time. A business loan is more or less advanced for longer terms such as 25 years. During this time frame, borrower can pay loan through smaller payments every month. In theory the sum charged as interest goes towards compensating the loan provider for the opportunity lost. Moreover, interest rate at which business loan is available is competitive in nature.

Having opted for business loans from the other sources of finance, entrepreneur still has to make a number of decisions. A pivotal decision relates to the lender to process the loan request. Ideally the low rate business loan is largely dependant on the loan provider. Furthermore responsible loan providers will often try to advance the best of deals to the entrepreneurs.

If it is becoming a grueling task to find a responsible lender then online search will be helpful. An

online search involves looking out for loan providers as well as their offerings through the Internet. For start up, they need to go to any of the search engines like Google, Yahoo, AltaVista etc. Remember that on putting the requisite type of business loan in the search box, the search engine will generate thousands of results. The next step will be in the form of searching, after studying their offerings, certain number of loan providers, optimally five. These loan providers may be needed for loan quotes, mentioning the terms on which a low rate business loan will be available. Remember the point that out of these loan quotes, borrowing businessperson can accept a particular quote. A loan provider is therefore accepted to process the low rate business loan.

Businesses must though make use of low rate business loan keeping in mind the debt equity ratio. Low rate business loans enhance the debt and thereby create disequilibrium in the ratio. Business loans in that regard keep a charge on certain business assets. When bigger amount of business loans are used, they may result in ill functioning of the business.

Manufacturing or retail or any other business sectors required funds at every part of their development. Generally business cannot be carried forward without availability of sufficient funds. A business loan is the tailored alternative for the ventures or businesses facing financial crisis.

Number of banks and financial companies provide business loans. But they normally consider certain factors before lending the amount. These parameters include the quality and value of the asset provided to be used as collateral. Another parameter that is taken into consideration is the profitability of the business to be financed. And last but surely not the least, is the credit score of the borrower. Though the credit score does not have much effect on the decision of lending the amount. But fact of the matter is good credit score always helps in availing the loan at little lower rate of interest as compared to the rate offered to the poor credit scorer.

Low Rate Business Loan is generally taken for the investment in the business. These types of investments can be in different forms according to the needs and requirements of the business and the borrower. It can be whether to purchase new premises or to consolidate the business debts or for the purpose of expanding the business.

There are certain properties of business loan that make it more productive. Business loan must be provided fast. This is because of the simple reason that as every minute in business is worth million of pounds. And in case if once the person has decided to start the new venture or to invest in the business, they generally want to achieve their target as soon as possible. In other words, their concept must be transformed into profitable action quickly. Waiting for long period of time can result in the huge losses for them. Big loses are not good for the lender, borrower and his business. In addition another feature is that, the loan must be provided on the competitive rate of interest. Normally the rate of interest is dependent on the quality of asset and credit history.