Think you need a business loan?
You might well do, it’s true.
But stop to consider your options just for 2 minutes. There are so many other commercial finance solutions that you may not have heard of or considered. Are you
The term “business loan” is used almost in the same way that the term “hoover” is – what actually refers to just one type of product is used to describe a whole category of things as a generic term.
The use of the word ‘loan’ can also feel a little daunting, particularly to small businesses or those who have avoided credit until this point in their business. But it may not be that you need a loan at all.
Commercial finance covers a whole scope of products outside of the world of ‘loans’. Each comes with their own set of terms, agreements and benefits to your business for consideration. For that reason, it’s important to try and understand the difference between the key products on the marekt. .
We’re giving you a round-up here of just some of the commercial finance options available to you here.
Commercial Finance Option 1: Asset Finance
Finance for every type of asset, put simply.
From vehicles to machinery, asset finance is one of the better know alternatives to business loans. Even costs that are not often associated with finance, such as smaller invesmtents like office equipment or shop furniture can all be secured with asset finance too. As a product, it covers a wide range of individual funding solutions, some of which will be more suitable than others for your requirements.
Asset Finance is an umbrella term for Hire Purchase, Finance Leases and Refinance Deals.
Commercial Finance Option 2: Tax Funding
VAT Funding is used to spread the cost of your quarterly VAT bills into more affordable, fixed monthly payments. An application can often take as little as 24 hours and you can apply for funding each time a bill is due, as well as up to 14 days after it was due.
A very similar product to this is Corporation Tax Funding. Again, this can be used to fund your corporation tax bill into more affordable monthly payments, often spread over 3-12 month terms.
Commercial Finance Option 3: Invoice Finance
Receiving funds against money tied up in unpaid customer invoices. Also known as Invoice Factoring, this allows you to receive a pre-agreed percentage of an invoice within 24 hours of raising it, often up to 90%.
Includes Invoice Factoring, Discounting and Selective or Spot Invoice Finance.
Commercial Finance Option 4: Business Loans
There are two types of loans to consider here. Unsecured Business Loans do not require security over assets or property and are great for businesses who need funds quickly.
A Secured Business Loan is backed up by an asset owned by the business or its Directors/Shareholders, like vehicles or property. Suited to businesses wanting to borrow more than £500,000.
Commercial Finance Option 5: Commercial Mortgages and Bridging Loans
A type of loan for businesses wanting to borrow over £25,000 and securing it by a first legal charge on your business premises. These can be used for property investments, purchases or development.
Bridging loans can be used in residential and commercial property transactions, acting as a short-term loan over 12 months to bridge a funding requirement.
The good news is, indepedent brokers like Moorgate Finance exist to help you understand each of these options (and more!) in greater detail. It is our bread-and-butter to be able to best advise you on suitable choices and where to go next.
Give one of our specialists a call on 01908 92 62 62 or make a fast, no-obligation application on our website: www.moorgatefinance.com/apply-now.