Use bank finance to start your business

Overdrafts and bank loans are the most common sources of additional finance.Before lending, a bank will want to know that you are a good risk. Typically, the bank will want you to:present a credible business plan ,provide evidence that you have a successful track record in business ,offer security for any money it lends you - either business assets or a personal guarantee ,invest some money in the business yourself

If you don't meet all the bank's normal requirements, you may qualify for a loan under the government's Enterprise Finance Guarantee scheme. For more information, see our guide on loans and overdrafts. Increasing the capital invested in the business makes it easier to borrow from the bank.


Whatever type of borrowing you use, you may have to pay arrangement fees as well as interest.Many small businesses use an overdraft to cover their borrowing needs. If you need longer term financing, it's a good idea to consider taking out a loan. Your plan should include detailed financial forecasts and demonstrate what you will do with funds invested in the business. You will also need to prepare a pitch, which will sell your business to potential investors


A flexible way of funding your day-to-day financial requirements ,interest is only payable on the amount you are overdrawn you can match the term of a loan to your requirements ,easier to budget for repayments Always take advice from your accountant or business adviser to ensure the loan meets your requirements and you understand the terms before signing any agreement.