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Boost your business resilience with a tranche loan

With forecasts suggesting we’re entering a period of economic uncertainty; many entrepreneurs may be wondering if borrowing right now is the right thing to do.

However, getting a loan even in uncertain times, might still be the right option for your business and there are different ways of reducing your initial outgoings.

One way Start Up Loans can support your business is through a process called tranching your loan.

What is a tranched loan?

The French word for ‘slice’, tranche means to divide something into smaller segments, especially money.

Simply put, a tranched loan allows you to borrow part of the amount your finance provider has agreed to lend to you now, with the rest (if you need it) to follow at a later date.

Why you might consider tranching your Start Up Loan

The main advantage is having the certainty of a lending agreement in place without having to borrow the entire amount in one go.

This means you won’t have to pay interest on money that you don’t need to use immediately.

This is especially useful when the economic forecast is uncertain.

If in the future you decide that you don’t need the full loan amount you don’t have to take it, you just pay back what you’ve borrowed under the normal terms of the loan agreement.

The Start Up Loan has a fixed interest rate of 6%, so no matter what interest rates do in the future, you’ll know exactly what you have to repay.

Learn more about Tranched Loans

Read about social enterprise Amandla Ubuntu, a company that used a tranched loan to finance its growth.

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How do I tranche my Start Up Loan?

For further help or information, you can contact our Customer Services team.