The current economic climate is generating a change in the business sector, as well as in the private one. In December 2015, the number of owner-occupiers who have taken out housing credit went up by 0.7%, making the total increase over the year 6.8%; that’s the highest increase since December 2010. However, the other side of the coin – house investment loans – had a minimal increase of just 0.3%. What does this tell us? We discuss Business Loans vs Investment Loans and how the borrowing climate is changing.
Business loans are on the rise – what does that say for start-ups?
Corporate credit increased by 0.5% in the same month of December, which makes the year to year increase of 6.3%. Obviously, this benefits the business sector, and it demonstrates that if companies are taking out business loans, then the business is going well. This type of loan can also be very helpful for start-up businesses who may find that applying for them in 2016 can lead to their success.
Fixing cash flow issues
A problem for start-ups is cash flow. You don’t have money until you’ve had time to get off the ground and actually do business, so something as basic as keeping the lights on in the place and paying your employees can be a struggle; there’s still a long way to go until you start making a profit. Business loans can fix these issues so that a small, start-up business has a chance to make money instead of being forced to close shop before it can really start working.
Offering a chance for investing
In addition, in business, you have to spend money to make money, and since a start-up would lack the crucial financial component, that can send it to its untimely grave. That can, of course, also be improved with business loans, which would allow the company to invest and give it a chance to turn a profit. A business at the beginning of the road is in need of help, and such a loan can be exactly what it was missing.
Flexible options are available
Perhaps the most beneficial aspect of a start-up is the fact that business loans can be very flexible, depending on where you get them. Different financing options are available, and the company may even be able to decide how much money they want to take, for how long, what the repayment schedule will be like, etc. There are flexible repayment options, as well as lenders who incur no early repayment fee. To a business that is just starting up, all of these are vitally important details that can make them or break them.
In conclusion, the incremental rise in business loans over investment loans can only be taken as a positive sign and proof that the business sector is once again thriving. Among those who can benefit from them, start-ups are, perhaps, the most apt, because of the many advantages they stand to enjoy when taking such a loan for their business. In the competition of business loans vs investment loans, business loans are coming out on top. So, speak to ALC Commercial about getting a business loan today!
