Loans
- Borrowing money from the bank is the most common form of financing available to businesses, either through a loan or an overdraft, or some combination of the both
- Banks will demand that the business can demonstrate some form of security against defaulting on its loan payments
- Interest will be payable on the loan or overdraft
- Amount borrowed plus interest must be paid back.
Soft loans
- Soft loans are those that aim to help promising businesses or social enterprises who cannot provide the forms of security asked for by banks
- They usually offer the borrower special terms on either security requirements, or on interest rates charged. Payment of little or no interest may be a condition of the loan, or in some cases borrowers can organise payment holidays.
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