What is an MOT garage business loan?
An MOT garage business loan is a form of business finance that allows business owners to raise funding for their garage business.
In this case, MOT garage business loans come in the form of Business Loanthat allows businesses to borrow money and repay it by committing a percentage of their future monthly card sales that they generate.
With a merchant cash advance, there are no interest rates compared to standard business loans. This is because a Business Loancharges a one-off upfront fee instead of charging monthly interest.
How can I apply for a business loan for my MOT garage?
MOT garage owners can apply for funding by going online to the For Kredit website where they can complete the online application form.
The application guides applicants through the process and takes a matter of minutes to complete.
How much money can I get from a Business Loanfor my MOT garage?
Businesses are allowed to borrow between £1,000 – £500,000 when they apply for a merchant cash advance.
Is my MOT Garage business eligible for a merchant cash advance?
Businesses need to meet the following criteria in order to meet the minimum requirements to apply for a merchant cash advance.
- Provide proof that the business has been operating for a minimum of six months.
- The business must generate a minimum of £1,000 in monthly card sales.
- The business is registered as a limited company.
- The business owner is a resident of the United Kingdom and over the age of 18.
How does a Business Loanwork?
- The owner of an MOT garage decides to borrow £25,000 in the form of a merchant cash advance.
- Because there are no interest rates, the owner is asked to pay an upfront fee. The owner is offered a fixed fee of 10% which takes the total cost of the cash advance to £27,500.
- The business owner is then asked how much of their future monthly card sales they would like to set aside to repay the loan. In this example, the business owner decides to contribute 10% of the business’s future card sales to repay the loan
- In the first month, the business generates £25,000 worth of card sales, so £2,500 (10% of £25,000) is taken to repay the loan. In the following month, only £15,000 is made in card sales so £1,500 (10% of £15,000) is used to repay the loan.
This process continues until the loan is fully repaid. As the example shows, the repayment process ebbs and flows alongside the performance of the business – ensuring that money is always being repaid.
How can an MOT garage benefit from a merchant cash advance?
One of the reasons owners apply for finance is that it helps generate capital during periods when a business might need it. It can help during times when working capital and cash flow may be having some issues, especially for seasonal businesses.
One of the benefits of a Business Loanis that the business repays the loan in tandem with how the business performs. It lets businesses repay more of the loan when the business is performing well and repay less when the business goes through a quieter period of trading. For businesses that perform well, it can be a useful short-term solution for garages or MOT centres looking to raise funds.
Quickly access funding
One of the benefits of an unsecured Business Loanis that the application and funding process is super quick. As a credit broker, not a lender, we can help pair businesses up with suitable lending partners which helps speed up the process. Overall, successful applicants can receive the money within as little as 24 hours of their application being approved.
What types of businesses can apply for Business Loanfunding?
business loans are not limited to MOT garages alone, there are plenty of other businesses that can benefit from this finance solution. Provided that the small business takes card payments, the following industries can apply for business funding.
Can I apply for an MOT garage business loan if I have bad credit?
Yes, business owners who have a below-average credit score can still apply for business funding.