Planning a large event can be a costly process. If you are just starting out you need a lot of capital to get an events business going. If you already have your business set up it can be worrying when you aren’t sure how well an event is going to do. It is important to do your research before embarking on the process of getting a loan. Some are easier to come by than others, and some have much higher interest rates.
If your company has a good credit record, you can opt for a business loan. These have lower interest rates than personal or payday loans, averaging around 2% – 13%. Business loans also mean that you are keeping your event business separate from your personal finances. This is crucial if you reach the tax threshold, not just for the simplified data entry tasks, but because you can clearly see what you can claim off against. You can also usually borrow a lot more cash using a business loan.
A personal loan also requires you to have a good credit record. They usually max out at £25,000 so if you require more than this, you’d have to go for the business loan or borrow against an existing asset. However, if that is enough for your event and your business has a poor credit rating, a personal loan might be an option. Personal loans look only at your personal credit rating, so can be a good option if you have previously borrowed a business loan in the past and not paid it back on time.
If you can’t get a loan through either of these pathways, or you need the money quickly, it might be tempting to use a payday loan. However, these are an expensive form of borrowing, and they’re only intended to be used for emergency payments, so an event would not fall under this remit. Payday loans in the UK are subject to tougher regulations – thanks to the FCA’s objective to protect consumers – and lenders are usually required to ensure they are being used for their intended purpose.
Your last option would be to borrow money against an existing asset with a secured loan, but this can be risky if you aren’t one hundred percent sure your event will be successful.
Event planning can be very expensive, but there are ways to make sure you are able to pay off loans. Early ticket sales and nonrefundable stall spots can be a great way of bringing in cash to make sure you will be able to pay off your loan after the event has happened.
Hopefully, you now have a better understanding of how you would like to borrow the money. In events planning it is always easier later on when you have collected some capital. This way you can use this to fund your events and not worry about taking loans out at all.