A Guide To Commerical Finance
Commercial finance is a term banded around
the banks for years, but just what does it entail.
If you search the internet the big banks come out top and their offerings appear to cover just factoring and invoice discounting although GE capital finance also loan for cash flow. So is it a unique term or does it really cover every type of business finance there is?
Commercial Loans For All Business Purposes
Really when searching for commercial finance the banks are assuming you are a smaller business and in difficulty and are not targeting loans - they believe that your business is open and just needs help with cash flow.
But in reality, commercial finance is everything to do with raising any type of finance to start or grow a new or existing business with loans mainly secured against assets rather than being unsecured.
Qualifying for commercial finance is generally easier for established businesses as they already have customers generating invoices and a history that banks can look at before they start lending against existing business. But startups can also look at getting much needed cash flow if they ask.
Commercial Finance Brokers
Apart from banks there are many commercial finance brokers in the UK that will work on your behalf to get the best deal. Bear in mind some will charge upfront fees but most get commissions from the finance houses and banks themselves. Be sure to get a contract of engagement and see exactly what a broker will do for you before you engage their services. Get quotes from a selection of brokers first to see what percentage of your invoice they will take to manage the debts for you.
The material contained in this publication is intended for use as a guide and for general information only. It is not intended to be a substitute for independent professional advice.
Seek professional advice before proceeding with your commercial finance requirements.
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