Business loans are a way of financing entrepreneurs to start their businesses or helping established businesses to grow or expand their operations. If you are thinking of applying for a business loan, you may be wondering what’s involved with the application process and how to get a “yes”.
During one of our Business Growth webinars, LinkedFinance shared their tips on how to make a loan application and provided advice on how to make the application process easier for you.
In this guide, we will explain the different types of loans available from LinkedFinance, tips for writing your loan application, and business loan success stories so you can make sure you’re making the right decision.
For more information on LinkedFinance and business loans, check out their website and complete the following form for exclusive access to no application fees, saving you €125.
Business Growth webinars focus on topics around growing your business. For a full list of our upcoming webinars, visit our events page.
About LinkedFinance
LinkedFinance is an Irish finance provider that offers loans to SMEs that are at least 2 years old. Their agents support clients in a range of industries (apart from Real Estate).
They believe all Irish SMEs should have an alternative to traditional bank loans. They offer everyday loans and are also a facilitator of the government-funded Credit Guarantee Scheme.
Types of loan
Everyday business loans
Amount: between €5000 and €300,000
Repayment time: between 12 and 60 months
Interest rates start at 6% per annum
Everyday business loans can be used for improving your business. Uses include:
- Business growth
- Working capital
- Purchase of equipment and vehicles
- Digitalisation of business
- Increasing staff count
- Brand development
Covid-19 Credit Guarantee Scheme
Amount: Between €10,000 and €250,000
Repayment time: Between 12 and 60 months
Interest rates start at 4.75% per annum
The Covid-19 Credit Guarantee Scheme offers finance providers, like LinkedFinance, a partial Government guarantee of 80% of losses on finance agreements for SMEs whose revenue has been negatively affected by Covid-19. Businesses whose revenue has decreased by 15% or more because of Covid-19 can apply. The interest rate for these loans is 4.75%, which is lower than the interest rate of a general loan. There are no personal guarantees or drawdown restrictions for this kind of loan. LinkedFinance is the first non-pillar bank approved lender under the Credit Guarantee Scheme, which has been extended until December 31st, 2021.
So, what does it take to get a yes when applying for a business loan?
Applying for a business loan and getting a yes on your application doesn’t have to be complicated. LinkedFinance recommends focusing on getting the basics right. For example:
- Minimise your costs. You can do this by ensuring you are availing of all the government business grants or government startup support that you are entitled to and renegotiating some of your current costs, such as rent
- Establish new revenue sources. The more sources of revenue you have, the easier it will be to prove you can pay back a business loan
- Be transparent about any other financial arrangements you have, for example, other loan repayments you are liable to pay.
- Be upfront about what you intend to use your loan for. LinkedFinance has advisors who can discuss your plans and help you use your loan in the best way for your business
- Develop your financial plan. Invest in your strengths and consider what you need to improve on and what resources you need to make these improvements. For help managing your accounts, talk to our Client Services team – we’re always here to help.
Advice for preparing your application
The longest part of applying for a business loan is gathering documentation. By having your bank statements, financial accounts, tax clearance documents, and other documentation on hand, you can make the application process quicker.
LinkedFinance recommends that businesses that maintain a good relationship with their accountant and meet with them regularly tend to get these documents more quickly. Once you have all the documentation that you need, LinkedFinance can make a decision on your loan in less than 24 hours.
LinkedFinance Success Stories
Businesses often have to adapt to make sure they survive. For example, during the Covid-19 pandemic, many Irish businesses had to change how they did things to stay in line with the public health guidelines and restrictions. LinkedFinance helped these businesses adapt with the Credit Guarantee Scheme. Some of their success stories include:
Example 1
Pre-Covid-19: Family run fruit and vegetable producer, primarily supplying B2B customers, such as hotels and restaurants
Loan: €195,000 over 3 years
Diversifying during Covid-19: Started selling direct to customers using an online ordering platform, which offered delivery and click and collect options
Example 2
Pre-Covid-19: Plastic manufacturer who produced plastic components, primarily supplying customers in the aero and pharmaceutical industries
Loan: €80,000 over 1 year
Diversifying during Covid-19: Started producing Personal Protective Equipment (PPE). Their customer base changed to include hospitals, GPs and care homes
Key takeaway
Traditional bank loans are not the only option when it comes to growing your business. Finance providers like LinkedFinance can give you the loan you need to expand or adapt your business. However, you need to be prepared for the application process.
For more information on LinkedFinance and business loans, check out their website and complete the following form for exclusive access to no application fees, saving you €125.
#BusinessGrowth webinar series
Larissa is a Fellow Chartered Accountant (FCA) and is the CEO of Accountant Online, which specialises in company formation, company secretarial, annual accounting services, bookkeeping, tax, and payroll services for micro and small companies in Ireland and the UK.
