Loan applications and multipled borrowing

[andzec]

Hi,
I am new to this forum (nice to meet you all) and I am starting up a LTD company and have sent some applications for 20k£ loans.
In my business plans, I didn't specify that I was applying at the same time to 3 banks (and I wasn't asked about this).
I just wanted to have best offer in terms of interest rates but, now, 2 banks have both accepted my request and are ready to provide funds.

My question is: what is the risk in this case? Can I take both loans? Do I have to inform anyone?

Thanks a lot
Regards
Andrea

 

[businessfunding]

The answer will almost certainly lie in the terms of acceptance - have you read them?

 

[Blue Steel]

Why would you want to borrow more than you need.

 

[andzec]

Hi,
It's just that in the meantime, we realised we have additional expenses and the second loand would suit very well...

 

[sebsuma]

That depends on the small print, I would mention it to both banks. If they say they wont give you the money, pick one bank loan and look at other ways of raising finance. Why not look at the modern method of crowdfunding? Or take a credit cards out for a little bit of extra money. Borrowing more than you need isn't a bad thing, but if interest rates are high then you want to stay away from that sort of thing.

 

[businessfunding]

That depends on the small print, I would mention it to both banks. If they say they wont give you the money, pick one bank loan and look at other ways of raising finance. Why not look at the modern method of crowdfunding? Or take a credit cards out for a little bit of extra money. Borrowing more than you need isn't a bad thing, but if interest rates are high then you want to stay away from that sort of thing.

Personally I would say that borrowing more than you want is a bad thing for several reasons

It shows lack of focus
It creates a false sense of security
It adds unnecessary costs

Also, before worrying about interest rates it is far more important to look at repayment schedules - in particular to what extent your loan capital is being used merely to repay itself.