Business loans broker
Here in our ABC Finance series deep dives, we investigate business loan brokers and why using a specialist can save you time and money.
Author: Gary Hemming CeMAP CeFA CeRGI CSP
20+ years experience in business loans
What is a business loan broker?
A business loans broker is a specialist who helps borrowers find finance that matches their requirements. Brokers help businesses apply for loans and negotiate with lenders to find their clients the best possible deal. Whilst business can apply to lenders directly this can be a time consuming process, and with a large range of financial products available it is preferable to seek expert advice.
Why should I choose to work with ABC Finance?
ABC Finance business has been supporting businesses since 2000 and is regulated by the Financial Conduct Authority. Our experts work with a wide panel of lenders and take time to understand your business needs to get you the best deal; our aim is to save you money.
We’ve helped over 30,000 businesses find a loan – our Trustpilot scores and reviews demonstrate how happy our customers are with our service.
How quickly can you approve my application?
The application process is straightforward and in most cases we can approve a loan application within an hour.
Our business loan experts will guide you through the application process and seek to understand more about your business and your needs to find you the perfect loan match.
You can email us, or request a callback and one of our experts will be in touch. Once your application has been approved we will need a few simple documents such as:
Business bank statements
The financial details for your business, such as your Companies House registration number
Details of the business owners
What types of finance do you arrange?
ABC Finance can arrange unsecured or secured business loans depending on your needs, it is worth considering a range of options and understanding what financial product you feel most comfortable with.
Unsecured business loans
Unsecured loans are a type of credit that isn’t based on assets such as property or stock. Lenders will assess the creditworthiness of a business and the likelihood that they will be able to pay back the loan. Unsecured loans are often shorter term arrangements.
This type of loan is considered to be higher risk as the lender does not have certainty the payments could be met, or that they will receive their money if the business defaults on the arrangement. Unsecured loans ordinarily have higher interest rates than secured loans.
Secured business loans
Secured business loans are based on assets or ‘collateral’ so the lender will have confidence that monies can be recouped if the business defaults on payments. Often assets such as property, or merchandise are used to secure loans.
Interest rates on secured loans are often lower as there is a guarantee that the lender will get their money back; however, with long term secured loans interest rates can be higher as a lender is tying up funds for a long period.
Invoice finance and factoring: this allows you to use your outstanding invoices to secure financing. Factoring is where a lender will pay you directly and take ownership of the invoices, they will collect the payment and keep the payment. With invoice factoring the lender will take a fee for providing the service or a percentage of the invoice amounts.
Invoice discounting is part of the invoice finance range of options and this is where the buyer pays promptly for a discount on goods or services.
Invoice financing can help a business maintain cash flow if payments are outstanding for a long time and money is required urgently.
Asset financing is used for short term working capital and can be based on monies due to the business or assets – this is sometimes known as ‘warehouse financing.’
Revolving credit facility. This is a flexible type of credit that allows businesses to use credit, repay it and withdraw it again as required; the arrangement is ongoing with no end date. Revolving credit is similar to a credit line, however, with a credit line the arrangement may have a specific end date.
Working capital loans are meant for short-term use and are helpful for businesses where income fluctuates throughout the year. This type of loan is usually paid back within 12 months and is not meant for long term debt or investments.
Commercial mortgages are loans that are secured on property that is not your residence. This type of loan can be secured against an office, warehouse or any other commercial property.
How much could I borrow?
ABC works with a wide range of lenders and can arrange business loans from £5000 to £750,000. In many cases ABC can arrange funding within 24 hours.
What are the advantages and disadvantages of working with a business loan broker?
Many lenders have strict criteria and a broker will be able to recommend financing options that are most suited to your business and your requirements. A broker will also manage the application processes making it streamlined and stress-free.
Using a broker can save you money as an expert business broker will be able to negotiate on your behalf getting you the best possible deal. They have access to a wide range of lenders and will be able to compare options and rates.
Brokers will charge a fee or commission, however, an expert broker is likely to be able to negotiate a good deal that can offset their fee.
It is important, however, to ensure you work with a broker that has specialist business experience and is regulated by the Financial Conduct Authority.
Frequently Asked Questions
Yes. A specialist broker can save you money by negotiating with lenders. ABC Finance has access to a large panel of lenders and we pride ourselves on getting you the best possible deal using our industry experience.
Yes, in most cases we can work with our lenders to find a solution to your finance requirements. Whilst good credit is always helpful in terms of approvals, a poor credit rating is not necessarily a barrier to getting an arrangement. It is important to work with a specialist lender who understands this type of finance and who will look at your current situation to assess what will work for your business.
The interest rates on loans may be higher for businesses with bad credit. Comparing lenders by using a specialist broker is recommended to ensure you get the best financial package for your business.
Contact ABC regulated by the Financial Conduct Authority for a callback and discussion about your needs. With twenty years of experience in trade finance and a wide panel of lenders, we focus on getting you the right solution for your business.
Cash flow finance can be arranged in as little as 24 hours, however, it can take longer. Using a broker often saves time when applying for a loan as they will handle the research and paperwork.
The money can be used for a variety of reasons from expanding your business to paying your tax liabilities. A specialist broker will advise on the most suitable financial product according to your needs and so give them as much insight into your business plan as possible as this will inform the products you are offered.
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