Loans & Finance

A loan can be described as the sum of money that is advanced to a business or an individual by a financial institution or any other entity. There are different types of loans including short term loan, long term loans, secured loans, unsecured loans, soft loans, personal loans, business loans and even student loans. An individual or business can qualify form several types of loans depending on their needs.

What is needed when wanting a loan?

What you need to take up a loan differs on the type of loan you are taking up as well as the institution or individual advancing the loan. However, most institutions will only advance a loan to people who have accounts with them, those with collateral, a good credit rating, guarantors and a stable source of income to repay the loan. For business purposes you will require an application form that has been signed by the directors or business owner and the signatories to the bank account. The bank will also require a clear business purpose like buying new solid handling equipment to increase production. Some bank may also require a business plan and forecast on returns. The value of the item used as collateral, your credit rating and credit history will be used to determine how much you qualify for.

Read more about solid handling

How can accountants help you with finances?

A chartered accountant in the UK can help you come up with an appropriate finance plan that will ensure that you meet your short terms and long term goals. They can also help you in maintaining proper financial statements for your business which can be used to determine how much money banks and other financial institutions can advance to your business. Accountants can also assist with prudent utilisation of financial resources to enhance success in your business.

Who can help with loans?

There are different people who can help you out with either getting ready to take a loan, financial planning to ensure you repay the loan successfully within the stipulated period as well as in making great use of the money borrowed. These include personal financial planners, accountants, and financial consultants. When choosing the expert to work with, it is essential to consider trustworthiness besides their expertise and experience for optimal results. Remember, engaging them and not acting on the plan fully will not bear results.

Why do people need loans?

There are numerous reasons why people may need loans. For instance, a businessman can use a loan to acquire business assets, to expand the business, to pay recurring expenditure as well to improve the working capital of the business. Individuals can use the loan advance to acquire assets such as property, to take care of their expenses, to set up businesses, for education of self or dependants, to offset other liabilities and generally take care of their families in the face of financial challenges.

When loans are used efficiently, they can be a great way to improve life and business. However, discipline is needed to keep up with loans and to gradually improve your credit rating. Default attracts penalties that may lead to financial stress if not dealt with accordingly. As with all other financial related transactions, ensure that you evaluate your options well to select the best service provider as well as type of loan.