There are many advantages to incorporating as a limited company vs. remaining a sole trader. You could instantly be eligible for a Selina BCF using your trading history.
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Ordinarily, as a sole trader begins to increase revenues they may look into setting up a limited company to reduce their tax burden or involve other people into their business as directors and shareholders. There is also a significant tax benefit once a sole trader is generating around £30,000 a year in profits.
Limited companies are also likely to find it easier to secure business finance than a sole trader, especially with more traditional lenders.
(Your property may be repossessed if you do not keep up repayments on your mortgage)
Selina’s Business Credit Facility requires 2 years worth of trading history in order to demonstrate historic business performance. This trading history can however be through a sole trader, assuming that the assets & operations are now being run through a limited company.
This would give companies, that were until recently sole traders, access to Selina’s BCF at affordable interest rates and terms from 5-30 years, helping to power their growth.
All we’ll need to provide a quick quote is; your operating profits as a sole trader, any existing credit commitments and the valuation and address of the property you would like to secure your facility against.
Unsecured finance, especially for recently incorporated businesses, can often be expensive with rates sometimes reaching over 20% at some expensive providers. By leveraging a residential property you can bring down your cost of capital and potentially free up cash every month for your business operations.
With Selina’s 5-30 year terms, you can make sure monthly payments are as affordable as necessary by ensuring terms are over a much longer period then most business loans.
Some lenders will offer finance options for sole traders, but these are often capped at £25,000-£30,000 and do not have the same flexibility as the options available to limited companies.
It will likely be a lot easier to obtain finance as a sole trader if you take card payments through a PDQ machine (e.g. run a stall at a market) as it will give potential lenders some strong verifiable data to demonstrate your revenue.
Merchant cash advance therefore is a popular choice here. Sole Traders can also opt for secured loans against personal assets or unsecured loans which are likely to come with a personal guarantee and at lower credit limits. You can also opt for a guarantor loan or crowdfunding if traditional routes are not available to you.
