Business Loans - Fact or fiction?
- You believe you have a business loan but is it just another mortgage against property (possibly the family home)?
- You need an increase in your overdraft but your bank, whom you've dealt with for years, has eventually told you "no". Do you understand why?
- You have a finance/bank facility but are unsure if it's a "good deal". How do you check?
Ask us, we'll tell you if you should stay with your current lender.
Every day we speak with seasoned business people who are unaware of what they have signed when obtaining business finance.
Do you understand the security you have provided for business loans?
Do you understand how vulnerable you are if your business experiences difficulties?!
- We can look at your current business loan and tell you in plain English why your bank has rejected your application for additional funding.
- We will outline what funding is possible and what security you will need to provide for your business loan.
- We will tell you (at no cost) if you currently have a good deal with your current financier.
We specialise in looking at the total business picture and assessing all other options to find the right financial solution.
We understand the realities of business finance: To source a "pure" business loan, your business needs to be strong, i.e. healthy turnover, with good asset backing and a track record of profitability.
What is a Business Line of Credit?
If you are a business that has stock and trade debtors but do not -
then you may be interested in a Business Line of Credit drawn against your debtors and stock.
The amount available to you will be less than and more expensive than traditional forms of debtor finance, but if it provides the funds you need to generate profit and reuse the dollar, then it may address your needs.
Generally, the funder will advance say 50% of the value of debtors and say 25% of the value of your stock. The facility will be a revolving facility.
What are the Charges?
- Service Charge - A fee charged on the value of the purchases.
- Interest - Charged on the funds in use.
- Application Fee - A fee charged either on the facility or on the take-on value of the purchases.
The rates charged will depend on volume, the level of service provided by the financier and the assessed risk.
Of course, negotiating the optimum business loan is also important. That's why you need someone with the necessary experience and knowledge of the industry to negotiate the most suitable and cost-effective solution.