Business Borrowing - Business Finance Solutions | moneyfacts.co.uk
 

Business Borrowing Comparison


Every business requires funds at some point. What’s available will depend on how much you need to borrow and the type of business you run. We help businesses compare the best business credit cards, business loans and a range of business development and commercial property financing options to help you find the right business finance solutions and manage cash flow.
 

Business borrowing explained

If you're not sure what the above business finance terms mean, we're here to help.

On this page:

  1. Invoice factoring
  2. Commercial mortgages
  3. Business credit cards
  4. Business prepaid cards
  5. Business loans
  6. Bridging finance
  7. Property development finance

Invoice factoring

This refers to a service that would allow your business to cover the cost of unpaid invoices. When you hire an outside business to do invoice factoring for you, they will purchase your invoices from you at say 80-85% of their value, so you don't have to worry about raising extra funds to compensate for late payments.

The invoice factoring firm will then give you the rest of the money, minus their fee, once they get it from the company that owes you. This can be a powerful tool for small businesses that don't have the time or the clout to go after bigger firms to make sure they can pay their own bills.

Note that your customers will be aware that you have outsourced your invoicing, which may put some people off. That's why it's important to find an invoice factoring firm that not only offers you a competitive fee, but also matches your own level of professionalism and service.

Commercial mortgages

Much like with a regular residential mortgage, you can use a commercial mortgage as a loan to help purchase your business premises. The property you are buying is used as the collateral in case you are no longer able to make your repayments. However, there are some key differences between residential and commercial mortgages.

For one, you will not be able to get a commercial mortgage with just a 5% deposit. Such business borrowing will require at least 25% of the property value to be put up as a deposit. Additionally, there may be costs related to planning permissions, licencing and other issues that you wouldn't encounter with a residential property.

Commercial mortgage contracts tend to last longer, too, with periods of 30 years quite common in the market. While this means you'll have longer to repay the loan, it also means you'll need to make a bigger commitment than you would when buying a home.

Finally, you will likely have to pay a higher interest rate to secure funding on business premises. That's why it's so important to compare the market. To find out more about this type of business funding, click through to the chart and the detailed information underneath it, or go directly to our partners, B2B Finance, for additional support.

Business credit cards

Certain businesses require their staff to have their own credit cards, especially when employees need to travel often. That is where business credit cards could come in. They help fund your employees' everyday expenses in a way that is a lot easier to manage than expense claims. And you, as the owner, could naturally use such a card yourself as a form of short-term business lending.

They differ from regular credit cards in that you'll be able to have multiple cards in the names of different cardholders. There will likely be higher charges to pay, and there might be some limitations (as some cards can only be opened by certain businesses), which is why you'll want to find a competitive and appropriate deal.

Business prepaid cards

Business prepaid cards allow you to give your key employees their own card to cover their business expenses, without you having to worry about them spending more than they're allocated. These cards won't let the user spend more than the card balance, so you can simply load up however much you want and let your staff get on with their everyday business.

Business loans

These can be quite different from personal loans. Businesses may be able to borrow more than personal customers, depending on the type of loan and business, and you may be required to put up collateral such as a property.

Given the vast number of different loan types out there, it's important to do your research before you apply to any lender. However, business lending can be crucial if you've got a start-up or small business, either to get your business off the ground or help it expand. So, why not have a look?

Bridging finance

Technically, bridging finance is just another type of loan. It has certain advantages for those looking to get a loan quickly, however, as it offers a short term and a fast turn-around.

Bridging loans are meant to be used as a stop-gap measure for a business, with a quick injection of funds that can be paid back usually within a year. If this is what you're looking for, then why not click through above to get a quote.

Property development finance

This can be thought of as something between a commercial mortgage and a bridging loan. While all of these loans can provide funding for business premises, property development finance specifically offers short-term lending for the purposes of property renovations and such. Find out more by clicking through on the link above.

Business Borrowing

Commercial Bridging LoansCommercial Bridging Loans
'Bridge’ the gap between you selling a property, or securing longer term finance once a project is completed. Loan rates from 1% per month with finance available between £100k and £5million.

Property Development FinanceProperty Development Finance
Short-term lending that allows you to finance a renovation or refurbishment of a property. Loans up to 65% property value. Defer repayment until you sell or get a mortgage.

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