Types of Commercial Loans

Common types of Commercial Loans

When it comes to commercial and business finance, there is no standard template and no magic formula. Every application is different and the key is to make sure we understand what you want to achieve.

Tailored business finance

Typically our clients fall into two camps:

• Those who are looking for a better rate or their current bank simply doesn’t want their business any longer
• Those who the banks have turned away but they still have a good project which needs funding

In five minutes we can get a good picture of what you are trying to achieve. We will either offer a solution ourselves, or point you in the right direction. This is specialist stuff which shouldn’t be rushed so we will give you a specialist to talk to and find the right solution for you.

Typical types of commercial loans include:

• Commercial Owner Occupied Mortgage – A mortgage provided for a company / business wanting to purchase premises to trade out of.
• Commercial Investment Mortgage – Mortgage provided for someone wanting to buy premises that they will own but then rent out to a separate company with a commercial lease in place. (Effectively a business version of a residential Buy to Let mortgage).
• Semi Commercial Mortgage – Mortgage provided for premises that have a mixture of commercial & residential use e.g. shop on ground floor and flat above.
• Non Status Commercial Finance – These are loans made to a limited company where there may be underlying difficulties. These can include poor accounts, bad credit, bank loans called in, tax bills overdue. The company can secure the loans against commercial or residential property by way of a first charge, second charge or third charge.
• Development Finance – Mortgage provided for someone wanting to purchase a building plot that they intend to develop into various properties either commercial or residential that they will then sell on.
• Unsecured Business Finance – Funds provided for a limited company lent on an unsecured basis over a short term.
• Invoice Finance/Factoring – Commercial funds secured against a company’s outstanding invoice book. Most companies provide a service / product but won’t get paid straight away. They may allow the customer a grace period of anything up to 90 days to settle the debt. With the above provision of funding, the company can receive an injection of funds equal to a % of their outstanding invoice book value to aid their cash flow. Also, to keep their customers happy with extended payment terms.
• Asset Finance – Commercial funding secured against company assets. This product allows them to raise money against things like machinery, vehicles, plant etc for most business use. It would typically be classed as short term finance lending and repaid over a 5 year period.