5 Factors You need to understand In relation to Commercial Finance

A lot of people, especially “first-time buyers”, tend to believe only when it comes to approaching their particular banks when it comes to arranging finance. You can find, however, other sources. You can find Commercial mortgage Lenders, Asset Finance Lenders, Lenders that specialise in factoring/invoice discounting, lenders that could provide finance centered on existing pensions, refinancing of existing commercial finance and much, much more. Also think about 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 today’s economic climate it is very difficult Commercial Finance Bournemouth to obtain finance for a lot more than 70% of the worthiness of the loan – although in an exceedingly limited amount of cases – not impossible! If you’re trying to find a lot more than 70% – anticipate to look for other alternatives. For smaller loans, vehicles, plant, equipment etc. might be acceptable. Some lenders even allow 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 enthusiastic about lending across the complete array of business sectors. They’re competitive only in the sectors in which they are 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 low the interest rate that you must pay. If your credit history isn’t perfect (and in this current credit crunch almost no will be regarded as perfect credit history) you will have to be signing up to a specialist commercial finance lender.

Government Grants

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

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

DTI Marketing [and other] Government grants can be offered to companies in many 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 your Broker will even usually charge a fee for arranging the loan. Whilst the natural reaction would be to approach Lenders direct, a Broker will cope with plenty of lenders covering numerous sectors and so can be more effective in the long run. A great Broker will be able to offer aid in sourcing of finance for all of the above loan and more.

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