As defined by the British Business Bank, a Personal Guarantee is a legally binding agreement between a finance lender and a business owner or director which states that the business owner or director will be personally liable for repaying the loan if the business defaults on loan repayments or becomes insolvent.
A loan with fixed equal repayment instalments, whereby the portion of interest paid in the instalment reduces as the capital of the loan is repaid. As a worked example, with a loan of £50,000 repaid in monthly instalments over 5 years at a 10% interest rate, the monthly payments would be £1,062.35, and in the first payment, £645.68 would be capital repaid, and the remaining £416.67 would be interest. The next payment would be £651.06 in capital repaid and £411.29 in interest.
A short-term business loan which a business repays as a percentage of its card transaction sales, plus interest and fees. Click here for the British Business Bank blog.
A flexible funding option that enables businesses to draw and repay credit when required, to reduce the cost of borrowing. Revolving credit usually has a fixed interest rate. Click here for the British Business Bank blog.
A flexible funding option that enables businesses to release capital in specific unpaid invoices. How it works:
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