Business Loans

A business loan is a commercial term loan made to a business either on an unsecured basis, or secured against property assets or secured with a floating charge debenture over the companies full assets.

A business loan should complement the role of the business overdraft with the latter generally being used for day to day working capital but with the former taken on for a specific purpose.

You may require an injection of capital into the business for a variety of reasons. A business loan facility can complement other methods of raising working capital such as asset finance or factoring so when considering a business loan this is generally used for broader reasons as follows:

• To assist in the set-up of a new business
• To assist in the purchase of a trading business
• A new project / expansion
• For longer-term capital investment into the business
• To facilitate the purchase of the company premises

Business loans are a legitimate business expense and as such can be used by your accountant to offset your tax bill so any lending to the business is tax efficient. Unlike an overdraft, payments to a business loan facility are generally amortizing so over the period of the loan the debt is being paid off until at final payment the debt is redeemed in full.

Finally, business loans can be put into place very quickly when unsecured as the requirement for a solicitor to register the charge against as asset is not required and this removes a lot of stages from the process.

Other services you might be interested in

Factoring & Invoice Finance

Factoring & Invoice Finance

Invoice Finance works particularly well for expanding businesses. Increased turnover produces a larger debtor book which in turn produces more funding for working capital.

Asset Finance

Asset Finance

In theory, it is possible to lease almost anything, from equipment valued at a few thousand pounds to assets worth millions.

Commercial Mortgages

Commercial Mortgages

A commercial mortgage is similar to a residential mortgage, except the collateral is security over the Freehold or long Leasehold of a commercial building.