Most people, especially “first-time buyers”, tend to think only with regards to approaching their particular banks in regards 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 based on existing pensions, refinancing of existing commercial finance and much, much more. Also consider 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 Mezzanine financing Dorset extremely tough to get finance for a lot more than 70% of the worthiness of the loan – although in a very limited amount of cases – not impossible! If you should be looking for a lot more than 70% – anticipate to look for other alternatives. For smaller loans, vehicles, plant, equipment etc. may be acceptable. Some lenders even enable you to refinance equipment that you already own (say a car) thereby enabling you to produce capital into your business.
Which Commercial Finance Sector Does Your Application Fall Into
Its not all lender is interested in lending across the complete array of business sectors. They are competitive only in the sectors in which they’re keen to lend. Like, land and property – mortgages, vehicles, plant and machinery – asset finance. You need to therefore decide which business sector your requirement falls in.
What Is Your Credit History
The higher your credit history the lower the interest rate that you will have to pay. If your credit history isn’t perfect (and in this current credit crunch hardly any will be viewed as perfect credit history) you should be signing up to a specialist commercial finance lender.
The UK government provide various grants for businesses. Some of the very most common are Underneath the Small Firms Loan Guarantee Schemes [EFG] (which are easy to set up),. 75% of risk is taken by Government and provides another means of introducing vital growth capital to small businesses. Not available if you have existing potential security such as high equity in property in which 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 qualified to receive claiming R & D tax credits. This could mean very same of an injection of capital for around £70,000.
DTI Marketing [and other] Government grants can be offered 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 use a Broker then your Broker will even usually charge a fee for arranging the loan. Whilst the natural reaction is to approach Lenders direct, a Broker will handle plenty of lenders covering many different sectors and so can be more efficient in the long run. A good Broker will be able to supply help in sourcing of finance for all the above loan and more.