Owning a business in the United Kingdom is a financial decision that might have repercussions in the future. Dealing with business loans the right way—paying on time, avoiding debt—would surely result in the business owner eventually paying the equity of the business. Dealing with the loans the wrong way—failure to keep up with financial obligations—would increase one’s debt, not only affecting his or her credit rating but may potentially face the possibility of bankruptcy. Of course, no one wants to experience the latter, and as such, the individual may find seeking professional help an integral part of searching for the best loans payment deals and rates.
Before, planning to establish a business, prospective business owners turn to banks.Although they are still relevant in today’s financial world, a so-called “new kid on the block” emerged in the industry of business loans, and these are the unsecured business loans. Also known as business loan brokers, they are licensed professionals who work with multiple lenders. They also have access to a plethora of rates that business owners can find enticing to take advantage of.
With the playing field now even, it is now really up to the people searching for business to establish to choose between the bank and business loans. To put this into perspective, here is what business owners can expect from the two. In terms of market share, banking institutions who have been there in the business loan industry take up 60 percent, whereas unsecured business loans take up the remaining 40 percent. The benefits of availing the services of a bank for taking business loans rates and payment terms is that it allows the person to maintain an already existing working relationship with a banker. This is often the reason why a lot of people searching for banks; they are familiar with them and they trust them to take care of the business loan services. Conversely, banks can only look up and provide their own loans rates and it is often the responsibility of the client to deal with it.
The benefits of availing the services of a business loan broker, meanwhile, is that he or she will do everything on behalf of the business owner. From there, the client will decide which is best suitable for his or her needs. The downside of this, however, is that the broker may deem as untrustworthy, especially since a client hasn’t establish a working relationship with the broker yet.
Looking at what is mentioned above, it all comes down to personal preference. On one hand, people who have been used to going to banks for personal banking and dealing with credit cards can as well take advantage of the business loans services these institutions can offer them. On the other hand, people might find it way more convenient if they enlist the services of business loans broker. Instead of visiting a bank, potential business owners are exposed to a person who has a portfolio of potential lenders, banks, and business loans products. It also helps that they have someone who has years of experience in the industry, as well as the knowledge of the market. Whether business owners choose either a loan broker or a bank, it is still important to decide what is best for them, considering the circumstances of their finances.
After knowing the types of business loans, the thing you should focus on is the tax. In 2020, majority of businesses in UK will be required to go the route of Making Tax Digital for VAT. This government initiative is practical and logical as it will save businesses from the stress of filing everything in person.
The main goal of MTD is to make the process faster and more efficient. If you are planning to establish a business in UK soon, then make sure that you contact people who have good knowledge of how Making Tax Digital for VAT works.