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Business Loans Guide

Commercial Finance

A guide to helping you understand and compare commercial finance online

How to secure commercial finance

With so many loans available it can be difficult to know how to secure commercial finance. The first step when searching for any type of loan is to work out how much you need to lend and what the ideal repayment terms will be.

Once you understand what type of commercial loan you need, it will make it much easier to compare the various commercial business loans.

By partnering with over 30 lenders who specialise in providing every type of commercial finance, it is possible to find the ideal loan for your business. With loans available for just £1,000 through to a maximum amount of £20,000,000, we can provide you with the finance your business needs to grow.

To help you quickly secure the commercial finance you need, we have compiled this comprehensive guide to applying for a commercial loan.

What forms of commercial finance are available?

Whether you need a short-term form of commercial finance or a larger amount to repay over several years, our lenders can provide loans tailored to your required terms. By working with traditional lenders and more alternative options such as peer to peer lenders and online banks, we can provide a variety of unsecured and secured forms of commercial finance.

If you are looking to improve your working capital, the most popular forms of commercial finance are credit cards, overdrafts, invoice finances, lines of credit and merchant cash advances.

However, if you have specific plans in place for the future, such as making a large purchase, expanding the business or purchasing a new property, a larger amount will be required.

Our lenders can provide anything from asset finance and fixed term loans to a commercial mortgage, with repayment spread over several years.

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How to secure competitive business commercial finance

Whether you need assistance with anything from short-term cash flow to a commercial mortgage, securing a competitive commercial loan could make a significant difference to the finances of your business. By spending time reviewing the options available, you may save yourself a vast amount over the loan period.

To make this task quicker and easier, we have developed our finance finder tool. By asking some simple questions our system will present a list of lenders, who can provide commercial finance to match your unique requirements, with industry leading commercial loan rates.

The comparison tool is broken into three simple stages, which begins with simple questions about the amount you require and how long for. The second stage will ask a variety of questions relating to your business’s finances, such as your average monthly income, how you accept payments and how long the business has been operating for. The third and final step, will ask details about the type of business you run, as this will help us to locate specific forms of commercial finance suited to your industry.

The tool will then search our vast panel of lenders to find options which closely match your specific requirements. The system is designed to rank the available loans in order of how well they match the loan you require, the interest rate and the flexibility of the repayment terms. Generally, lenders will charge interest based on a percentage of the loan amount, in addition to various charges and fees.

By clearly displaying what you will need to pay at the start of the loan and throughout the agreement, you will be able to make an informed decision. However, if there are quite a few options, it is possible to refine the list by answering a series of more detailed questions. These will look more closely at your finances in the past and how you are currently trading, so that the lenders can be closely aligned to your requirements.

How to complete the commercial finance application

To save you time when applying for commercial finance, our finance finder passes the information you have entered across to the lender when you apply. Each lender will require information which you will probably need to supply in the form of documents such as, bank statements, financial accounts, asset valuations and a business plan.

To save time during the application process it can help to familiarise yourself with the lender’s requirements, as you can prepare the required information in advance.

A detailed business plan is likely to take time to complete but could significantly improve the chances of your application being approved. The business plan is your chance to show how the commercial finance will be used to help the company grow. You should include information about expected monthly profits, as this will display clearly that you are able to afford the repayments.

The lender will then use the information provided to build a clear picture of your business both now and in the future, which will be determined to calculate the risk in lending you commercial finance. This information will be used together with your credit report to calculate the interest rate and the terms required.

Once the lender completes the underwriting process you will be sent a loan agreement, which you will be required to sign and send back. The agreement will include details about the interest rate, additional fees, the duration of the repayment period and frequency of payments. You should read these terms in detail to ensure you are familiar with every aspect, especially any charges which may apply for missed payments or repaying the loan early.

Is my business eligible for commercial finance?

The checks carried out by the lenders will indicate whether your business represents a high or low lending risk. If your business is high risk, the lender will be looking to recoup their funds quickly through high interest rates and a short repayment period. The most competitive commercial finance terms are offered to businesses with excellent credit ratings and a strong financial history.

The most common reasons why lenders reject loan applications are poor credit scores, lack of assets and poor financial performance. However, if your business is likely to struggle with obtaining commercial finance, there are a variety of options provided by our lenders. For example, if your business has a poor financial record, but owns valuable assets it may be possible to obtain commercial finance through a secured loan. This involves using your business assets as security against the loan, with lenders typically able to lend to the value of these assets.

If your business is not able to supply security and is struggling to access a commercial loan, it may be possible to provide a personal guarantee. A director or shareholder can take responsibility for the loan repayment, based on their own personal assets and credit rating. However, this will mean that assets such as a home and vehicle are at risk, if the business falls into financial difficulty. It can also impact your own financial position, which could make it difficult to obtain personal credit in the future.

It is our aim to provide competitive and flexible commercial finance to every business, regardless of the industry, business age and financial position. If you would like to discuss the commercial finance available to your business or find out more about any lenders on our panel, please contact our experienced team.

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