Finding the right funding for you can be a bit of a minefield as there are a lot of options for you. Below we have set out a few of the options you have to fund your businesses growth.
Business mortgage (also known as owner-occupier mortgage)
If you are looking for a mortgage to purchase premises for your business you will need a business mortgage or owner-occupier mortgage. If you already own your business premises and are looking to refinance the property you will need a business remortgage (or owner-occupier remortgage)
Commercial investment mortgage
If you are looking to invest in non-residential property to rent out to other businesses you will need a commercial investment mortgage. If you already own a commercial property for investment purposes and are looking to refinance it, you will need a commercial investment remortgage.
Refurbishment / Development finance projects can be split into three categories:
Property Refurbishment Finance
A property refurbishment project would involve the purchase of a property and straight-forward refurbishment. Typically these projects have a fast turnaround.
Property Conversion / Refurbishment Finance
Property conversion projects would involve more substantial work such as an extension, conversion of an existing property into flats, or some other structural re-modelling. This type of property conversion will almost always involve planning consent, building control and sub-contractors.
Property Development Finance
New build property development is usually taken on by experienced property professionals. The site may be purchased with either full or outline planning permission which means that cash can be committed to these projects for long periods.
Property Refurbishment Finance is available for the following:
- Auction purchases
- Commercial developments
- Residential developments
- Residential refurbishments
Other Financial Packages:
Bridging finance is the term used to describe interest only, short term funding (usually up to 12 months but can be up to 3 years) secured on land or property. Speed of completion is usually critical as bridging facilities are often required to resolve a temporary cash flow problem or to meet tight deadlines.
One of the unique aspects of bridging finance is that, unlike many longer-term financial products on the market, the client is not heavily penalised for repaying the principle sum earlier than the contractual term. Both the lender and the borrower are aware from the start that the finance is only for the short-term.
Business Cash Advance
A Business Cash Advance is an unsecured alternative finance product providing cash flow to businesses needing short term finance.
It is not a loan product and as such does not have an APR, fixed monthly repayments nor is it regulated.
An upfront fee, sometimes known as a factor rate, is applied to the requested sum and then the business pays back this total amount via an agreed percentage of their debit/credit card takings. These payments are usually taken back on a daily basis and, as such, follow the business performance, thus a Business Cash Advance is cash flow friendly.
If your business could benefit from improving its cash flow then invoice finance could be the solution. More commonly known as factoring and invoice discounting, it releases the cash tied up in your invoices which are not due for payment for 30 days, 60 days or even longer.
Factoring is a disclosed facility which incorporates credit control, debt collection and funding. It can also include bad debt protection. Invoice Discounting is a funding only solution. Usually confidential, it leaves the credit management to you. This too can include bad debt protection.
Asset finance is a flexible alternative to a traditional bank loan, providing significant cash flow and tax benefits for businesses looking to purchase a new piece of equipment, a vehicle or other fixed assets.
Asset finance is a valuable alternative to conventional bank loans. It is generally secured on the asset being financed, reducing the requirement for additional collateral. It is more secure for the user as the finance cannot be recalled during the life of the agreement.