When you’re running your own business, you’ll need finance. Whether it’s for start-up costs, expansion, growth, or day to day operations, finance is necessary to meet your business goals.
Business finance offers a range of different solutions and products, from unsecured loans and hire purchase to commercial mortgages and secured loans, to merchant cash advances and invoice financing.
Business finance can be used from anything from paying a VAT bill, to purchasing or leasing the latest equipment, or securing new premises and funding expansions.
We offer a range of business loans and finance to suit every need, in every sector and industry.
Our panel of lenders can provide loans and finance for any purpose, with flexible repayment terms to suit your timelines and budget.
Our easy, online application process has no impact on your credit score, and decisions are made within hours, meaning you can have the money you need on the same day.
Ways to contact us
Buying equipment, machinery or vehicles to run a business can be very expensive, and you might not have the money available to purchase these items outright.
Asset finance is a way to purchase or lease these assets while spreading the cost.
The main types of asset finance are hire purchase and lease.
Hire purchase allows you to spread the cost of buying an asset, rather than use up your capital by paying for it all at once. You’ll make monthly payments over an agreed term. At the end of the term, once all of your payments have been made, you will own the asset.
Some hire purchase agreements include the option of a balloon payment – your monthly payments will be cheaper over the term, but at the end you’ll make a larger, final payment to purchase the asset.
Hire purchase agreements are mainly used to purchase vehicles, equipment and machinery.
A lease allows you to use the asset over an agreed period of time in return for monthly repayments, however, unlike a hire purchase, you won’t automatically own the asset at the end of the term.
Instead, at the end of the lease agreement, you will generally have the following options:
- You can renew the agreement and continue to use the asset.
- You can return the asset to the provider.
- You can sell the asset and keep a percentage of the proceeds.
- You can buy the asset outright.
Like hire purchase, leases are mainly used for vehicles, machinery and equipment.
Leasing also lets you hire the most up-to-date equipment and machinery, helping your business keep up with technological developments or new regulatory requirements.
Some lease agreements come with the option of adding insurance and maintenance, giving you peace of mind that any faults or repairs are covered.
Asset finance is available for a wide range of business sectors:
- Farming and agriculture.
- Waste and recycling.
- Haulage, transport, and logistics.
- Retail and service.
- Professional practices (dentistry, doctors, veterinary practices.)
With a business loan, you can obtain funding for a variety of business needs – such as purchasing stock or equipment, a new property or premises, recruiting staff, or marketing.
Business loans can also be used to meet your tax liabilities when working capital isn’t available, ensuring that your tax is paid on time and you avoid any unnecessary penalties from HMRC.
Business loans work in the same way as any other loan, but may have clauses to ensure that the money is used for a specific business purpose.
Business loans can be secured or unsecured.
A secured business loan is secured against an asset such as a property, equipment or machinery that you own.
Unsecured loans work in a similar way to a personal loan. Because they are unsecured, no business or personal assets are at risk and no charges are placed on your assets or property.
Commercial mortgages work in the same way as regular mortgages, but are specifically used to purchase business premises or land.
Semi-commercial mortgages are for premises that combine a commercial and a residential property, such as a building with a retail unit on the ground floor and a residential flat above.
Commercial and semi-commercial mortgages can be a cost-effective alternative to taking out a commercial lease. The monthly payments can be cheaper, and it can also be easier to sell the premises than it is to exit a long-term lease when it’s time for your business to move on.
Owning your business premises means that you can generate further income by renting out office space or parking, and you will also benefit from any increase in the property’s value.
You can refinance existing mortgages to get a better rate or to release equity to inject cash into your business.
Invoice finance is a way of accessing cash that is currently tied up in outstanding invoices, helping to ease cashflow pressure. Funds can be released instantly, giving you the cash you need to meet the daily costs of running your business, without having to wait until the payment is due, or until a late invoice can be chased up.
The lender will advance you a percentage of the invoice amount and when the full amount is received, the lender will pay you the remainder of the funds, minus any fees and charges.
There are three types of invoice finance available:
- Invoice discounting.
- Invoice factoring.
- Selective invoice finance or spot factoring.
The difference is in who collects the full invoice amount and communicates with your customers – you or the lender.
Invoice discounting is when you chase up the outstanding invoices and maintain all communications with your customers yourself. Invoice discounting helps you maintain confidentiality – your customers will not know that you have taken out invoice finance. The potential downside to invoice discounting is that it can be time consuming, chasing up late paying customers.
Invoice factoring is when you let the lender chase up the outstanding invoices. The lender will contact your debtors directly, so they will be aware that you have taken out invoice finance. With invoice factoring, the lender provides credit control services, ensuring that your customers pay on time. They can also conduct credit checks on new customers, helping to avoid bad debts and reduce the risk of late payments.
Selective invoice finance or spot factoring doesn’t involve the entire sales ledger, and allows you to choose which invoices you’d like to finance, and which invoices you’d like to deal with yourself.
A merchant cash advance is a lump sum loan that you pay back with a percentage of future credit and debit card sales. Unlike other loans, there are no fixed monthly payments.
A merchant cash advance is a great way of obtaining quick, short-term finance, and because the loan is paid back with a portion of your sales, it helps your business maintain a healthy cash flow. The lender collects the payments either daily, weekly, or monthly, until the loan is repaid.
The lender works with your card terminal provider, and payments are taken at source, at the agreed percentage. The percentage will stay the same, but payments will fluctuate, depending on your card payment income.
As an example, let’s say your advance was £20,000, at a rate of 10% of your daily sales. If your daily sales on Monday amount to £1500, your payment would be £150. On Tuesday, your daily sales are £2000, so your payment would be £200. On Wednesday, sales are £1000, so your payment would be £100.
Because of this flexibility, a merchant cash advance can be a good product for businesses with seasonal or variable income.
Merchant cash advances can be used for a range of purposes, such as operating costs, maintaining cash flow, purchasing stock or new equipment, or funding renovations.
Merchant cash advances are ideal for retail and service businesses, such as high street shops, hairdressers and salons, restaurants and cafes, and pubs and bars.
To qualify, you’ll need to use a card terminal to process payments and meet the minimum volume of card payments set by the lender, which can vary, depending on the lender.
Structured finance is for larger businesses and corporations with more complicated financial needs, such as funding acquisitions and mergers, refinancing debt, financial restructuring, management buy-outs, or obtaining growth capital.
Structured finance can combine the value of a company’s assets to provide a larger cash injection into the business. It can involve a combination of financial products, such as asset finance, mortgages, loans, and invoice financing.
For larger businesses with more complex needs, structured finance can involve using a range of different products across the different asset classes – cash, fixed interest (bonds), equities (shares) and property.