Business loans are not our core specialism, asset finance and refinance are. But loans complement those services well, and we arrange them through the same broad lender panel.
An unsecured term loan provides a lump sum that is repaid in fixed monthly instalments over an agreed period. We can arrange unsecured business loans from £1,000 up to £350,000, over terms of two to five years. No asset security is required and no property needs to be offered as collateral, the loan is assessed primarily on the strength of the business's trading history and financial position.
Term loans suit a range of purposes: working capital to take on a larger contract, clearing a tax bill, funding a deposit for an asset finance agreement, purchasing stock, or meeting an urgent operational requirement. Because no asset is involved in the security, the process is generally faster than asset-based lending, though the cost tends to be higher to reflect the lender's greater risk exposure.
Short-term business loans run over 12 to 24 months. Decisions tend to be faster than for longer-term facilities, which makes them well-suited to time-sensitive requirements. They are typically more expensive than a term loan of three to five years, because the lender is taking a concentrated risk over a shorter period and pricing accordingly.
They are most useful where the business has a specific, near-term need, repaying an expensive bridging loan, covering a tax demand before an asset refinance completes, or funding a deposit on a purchase that needs to move quickly. If the requirement can wait and a longer-term facility is appropriate, we will usually say so, because the cost of a short-term loan should be weighed against what the business actually needs.
A revolving credit facility works differently from a fixed term loan. Instead of receiving a lump sum and repaying it over a set period, the business is given a credit limit that it can draw on and repay flexibly as its needs change. Repayment options can be structured over 1, 3, 9 or 12 months depending on the facility and the lender.
This type of facility is particularly useful for businesses with unpredictable or lumpy cashflow, where income arrives in irregular amounts, or where stock or materials need to be purchased ahead of a contract being paid. Rather than drawing down a full loan and paying interest on funds it does not yet need, the business draws only what it requires and repays when it can, keeping the cost proportional to actual use.
Invoice finance allows a business to release cash tied up in unpaid customer invoices before those invoices are actually settled. Rather than waiting 30, 60 or 90 days for payment, the business can access a proportion of the invoice value, typically 80% to 90%, almost immediately after raising it.
There are two main models. Factoring involves the lender managing the credit control process on behalf of the business, chasing payment, processing receipts and reconciling accounts. This removes the administrative burden but means customers are aware they are dealing with a finance provider. Invoice discounting is a confidential arrangement: the business continues to manage its own credit control, and customers have no visibility of the finance arrangement. Which model suits a business depends on its customer relationships, its own capacity to manage credit control, and the preferences of the lender.
Invoice finance is most useful for businesses with long payment terms from customers, or where a single large contract creates a significant cashflow gap before settlement.
Loans and refinance are often most powerful when used together. A business may have significant equity in its existing assets but also need working capital beyond what the refinance alone releases. Or it may want to use a short-term loan to fund a deposit on a new asset purchase while a refinance of existing assets is being arranged. We look at the whole picture, what the business has, what it needs, and what it can comfortably repay, and find the combination of facilities that makes most sense.
In practice, this might mean a refinance that settles existing finance, releases cash and is supplemented by a revolving credit facility for day-to-day working capital needs. Or it might mean a term loan to cover a tax bill while a longer-term refinance is being structured. Every situation is different, and we will always tell you what we think rather than recommending the most expensive route.
There are situations where an unsecured business loan is not the most appropriate solution, and we will tell you plainly when that is the case. For larger requirements, or where the business already has significant asset value, asset refinance is almost always cheaper and more accessible than an unsecured loan. A refinance secured against a piece of plant or a fleet of vehicles will typically carry a lower rate than an unsecured facility of the same size, because the lender's risk is lower. If refinance is a better route for you, we will say so and explain why, even if the loan would also have been possible.
As with all our services, we receive a commission from the lender on successful completion. Nothing is charged to you beforehand, and the initial consultation is free. We disclose the commission model fully before any agreement is signed, and we are happy to explain exactly how we are paid.