5 Stuff You should know Around Commercial Finance

Most people, especially “first-time buyers”, tend to believe only with regards to approaching their particular banks as it pertains to arranging finance. You will find, however, other sources. You will find Commercial mortgage Lenders, Asset Finance Lenders, Lenders that specialise in factoring/invoice discounting, lenders that could provide finance predicated on existing pensions, refinancing of existing commercial finance and much, much more. Also look at a personal loan or mortgage.

What Security Do You Have For The Loan

For big commercial loans, commercial finance lenders usually require land and buildings as security for the loan. In the current economic climate it’s very hard Commercial Finance Bournemouth to get finance for significantly more than 70% of the value of the loan – although in a very limited number of cases – not impossible! If you should be looking for significantly more than 70% – be prepared to try to find other alternatives. For smaller loans, vehicles, plant, equipment etc. might be acceptable. Some lenders even permit you to refinance equipment that you already own (say a car) thereby enabling you to release capital into your business.

Which Commercial Finance Sector Does Your Application Fall Into

Not every lender is thinking about lending across the whole range of business sectors. They are competitive only in the sectors by which they’re keen to lend. For instance, land and property – mortgages, vehicles, plant and machinery – asset finance. You should therefore decide which business sector your requirement falls in.

What Is Your Credit History

The greater your credit history the reduced the interest rate that you must pay. If your credit history is not perfect (and in this current credit crunch almost no has been seen as perfect credit history) you will have to be applying to a specialist commercial finance lender.

Government Grants

The UK government provide various grants for businesses. Some of the very common are Under the Small Firms Loan Guarantee Schemes [EFG] (which are easy to set up),. 75% of risk is taken by Government and provides another method of introducing vital growth capital to small businesses. Not available if you have existing potential security such as for example high equity in property where a secured loan could be set up.

R&D Tax Credits may be available to companies who carry out any research and development, including engineering, software, computer hardware or any product development, may be qualified to receive claiming R & D tax credits. This can mean the equivalent of an injection of capital for around £70,000.

DTI Marketing [and other] Government grants may be available to companies in most sectors for the development of business by using DTI Marketing (and other) Grants.

Approach A Lender Direct Or Use A Broker.

When obtaining a commercial loan, the Lender usually charges a fee for providing the loan. If you choose you work with a Broker then a Broker will also usually charge a fee for arranging the loan. Whilst the natural reaction is always to approach Lenders direct, a Broker will cope with a lot of lenders covering many different sectors and so may be better in the long run. An excellent Broker will have the ability to provide help in sourcing of finance for every one of the above loan and more.

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