Other Sources Of Business Finance
Asset finance can be used as an alternative source of funding and is designed to help businesses raise the capital needed to purchase new assets. If your business is looking for funding to help with new equipment, vehicles or machinery, then asset finance could be the best solution.
Asset finance can also be used to release capital into the business by refinancing assets that are already owned. Asset finance generally takes around 1-2 weeks for funds to be released.
Merchant cash advances can be used to raise cash quickly. They are designed to work with businesses who take payments through a card terminal. Generally, you are able to release around 1 months turnover and repayments are collected straight from the card payments you receive. A set percentage of income from card payments is agreed upon as the basis for repayment.
Merchant cash advances can complete very quickly, with funds often released on the same day that the application is submitted. The cost of credit is agreed upfront, for instance, an advance of £10,000 may require a total repayment of £13,000. The term of repayment is not set in stone, due to a set percentage of takings being agreed upon, rather than a set monthly payment. As a result, an APR comparison against business loans is very difficult to provide.
Commercial Mortgages can also be used to release cash into a business. Commercial mortgages are usually available up to a maximum of 80% of your property’s value. Rates on commercial mortgages tend to be very low, meaning it is often the cheapest method of raising finance for a business.
The flipside to the low rates offered on commercial mortgages is that there is a lot of work to do on an application, with valuations and legal work needed. A commercial mortgage can’t generally be completed in less than 4 weeks, meaning they are often not suitable when funds are required urgently.
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