Commercial Finance

We endeavour to put together a seamless and timely commercial finance package, with an emphasis on attention to detail and a client-centred approach. We know the commercial finance market inside and out, including where to find the best deals for each and every business we work with, as well as how to present your business as the most attractive new lending proposition. We help ambitious and hardworking business owners throughout the UK obtain commercial business and property finance.

A Term Loan is a loan that has a specific repayment schedule with a fixed or floating interest rate. A Term Loan can be appropriate for an established small business with solid financial statements and the ability to make a substantial down payment to minimize repayment amounts and therefore the total cost of the loan. The ability to repay over time makes it an attractive small business loan, as the expectation is that they will increase their profit over time. Term Loans are a good way of quickly increasing capital.

A short-term loan is a loan for a short period of time, usually lasting up to a year or 18 months. It is generally offered to companies that don’t offer a line of credit.

A long-term loan can run from 3 to 30 years. It requires monthly or quarterly payments from cashflow or profit. The loan may limit other financial commitments, including other debts, dividends or principals’ salaries?and can require an amount of profit?set aside for loan repayment.

An intermediate-term loan generally runs more than one – but less than three – years and is paid in monthly instalments from a company’s cash flow.

Balloon Loans are shorter long-term and intermediate-term loans and come with?balloon payments.?These are called “balloon” because the final instalment swells or “balloons” into a much larger amount than any previous ones.

IP Finance is fairly new and innovative debt facility allowing IP intensive businesses to get debt facilities in place against the value of their Intellectual Property. The facility allows businesses to realise cash from the development costs spent creating the IP and the future value that IP will bring to the business. This funding option works particularly well for software businesses.

Intellectual Property assets have a secondary market value, therefore when these assets are properly protected, as real assets of a company, many can be offered as security to an investor or lender. Funding could, therefore, be secured against IP assets in many different scenarios and sectors using patents, brands, software, trade secrets, databases and technical specifications as security.

Invoice Financing allows you to borrow money against the amounts due from customers. Businesses pay a percentage of the invoice amount to the lender as a fee for borrowing the money.

Banks have been successfully challenged in this space by alternative lenders over the last five years by a new breed of provider who offers; higher percentages, ability to extend the term, ability to be confidential, lower costs.

Invoice Financing can help with issues related to customers taking a long time to pay and difficulties obtaining other types of business credits.

Supplier Finance plays an important role in improving the cash flow and operations of a company. Supplier Finance provides companies with credit to buy goods from their own suppliers. In turn, they can use these products to deliver larger orders or build inventory

Unlike other types of financing, Supplier Financing expands the company’s existing financial capabilities. This solution is used by manufacturing companies and product distributors. It can help them purchase raw materials and products on credit. Thus, enabling them to fulfil new purchase orders or build inventory.

Supplier Financing is attractive because it is compatible with most other financing solutions that a company may have already in place, e.g. invoice factoring, business lines of credit or asset-based loans.

Order Financing or Purchase Order Financing (PO) is a funding option for businesses requiring cash to fulfil customer orders. In a small business cash flow is a major problem, and there is likely to be occasions when the cash is not readily available to deliver against an order. Turning the order down would mean a loss of revenue and impact in the business in other negative ways, for example, reputation.

Simply put, Order Financing involves one company paying the supplier of another company for goods that have been ordered to fulfil the job for a customer. Basically put, Purchase Order Financing is an advance covering some, or all, of the order.

Simply put, Asset Finance is a type of business funding used to access the equipment, machinery and vehicles a company needs, without having to find the upfront costs. Businesses can also use Asset Finance to release cash that’s tied up in the value of their current assets – this is called Refinancing.

Asset Finance is fairly straightforward in how it works. Simply put, the lender pays for the asset upfront so the business does not have to, and then the business pays a recurring fee for a set period of time to use the asset. The two most common types of Asset Finance are Hire Purchase and Lease Financing.

  • Hire Purchase gives?you the option to purchase the asset for a fee at the end of the agreement. Businesses will generally pay a higher amount upfront and then the remaining cost of the asset is split and repaid at a pre-agreed fixed-rate of interest per month until the end of the agreement.
  • Lease Financing is when the funder purchases the asset and the borrower has use of the asset during the lease period while it pays a series of instalments. With Lease Financing, businesses generally pay a lower amount upfront than you would for Hire Purchase and the remaining cost of the asset is split and repaid at a pre-agreed fixed-rate of interest per month until the end of the lease. It is possible for the business to keep the asset at the end of the primary lease period, however, this may be subject to an annual rental.

A business overdraft is an extension of credit from a lending institution that starts when an account reaches zero. The overdraft allows the account holder to have access to, or to withdraw, money even when the account has an insufficient amount to complete a transaction.

Business overdrafts can be a really useful way of small businesses accessing a working capital buffer when they need the cash quickly. For other businesses, they’re more like a safety net that is used rarely, but invaluable in times of need.

It has become harder to get traditional business overdrafts from the major banks — but luckily there are lots of alternatives.

Unsecured Loans are loans provided by a lender to a borrower without the use of property or other assets used as collateral to protect against missed repayments or defaults. An Unsecured Loan is the direct opposite of a Secured Loan, in which a borrower pledges some sort of asset as collateral for the loan, eg car or home. If a repayment is missed or the account defaults the asset used to secure the loan is seized. The seized asset is then sold as a means of repaying the loan. As there is no asset used in this case, the loan is unsecured. Because of this, the funds available for Unsecured Loans for small businesses are generally lower and the interest rate is higher – as there is a greater degree of risk attached to an unsecured loan.

Understanding types of unsecured loans

  • A Term Loan is a loan that the borrower pays in equal instalments until the loan is paid off at the end of its term. While these loans are often linked with secured loans, there are also unsecured term loans.
  • A Consolidation Loan occurs when someone pays off several smaller loans with one larger loan. A?consolidation loan?to pay off credit cards or a signature loan from a bank would both be considered an unsecured term loan.
  • A Revolving Loan is an agreement which allows for the loan amount to be spent repaid and spent again in any manner and any number of times until the loan arrangement expires. An example of this is a credit card or personal line of credit.

If you own a small business it can be difficult to identify grant funding that is available, we are able to assist in identifying suitable grant funding options and the application processes involved.

R&D tax credits are a tax incentive from the UK government, designed to encourage companies to invest in research and development. The scheme was introduced in 2000 and only Limited Companies qualify for R&D tax relief. This scheme can dramatically reduce your tax bill or you can claim payable cash credits as a proportion of your R&D expenditure. There are different types of R&D relief depending on the size of your company and whether the qualifying project has been subcontracted to you or not.

If you would like to learn more about R&D Tax Credits please do not hesitate to get in touch.

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