Large Business Loans

A large business loan is a term used to refer to a significant or sizeable loan, rather than loans that are only available to big businesses. Large business loans are quite common for a range of companies looking for finance, including start-ups that are ready to expand.

One of the key points about large business loans is that they are often more difficult to arrange, owing to the sums of money involved. Larger loans are likely to require assets to be used as security in case of default, however, there are many funding options available – both secured and unsecured.

When dealing with complex and significant funding arrangements it is always recommended to take specialist advice from a broker regulated by the Financial Conduct Authority with experience in this area. An expert broker will be able to assess the multiple options available and negotiate on your behalf, finding you the very best deal and saving you money.

What is considered a large business loan?

Typically, a large loan would range from around £50,000 to £10 million, although in some circumstances can exceed this figure. The amount of funding provided would depend on the purpose it was required for. 

When seeking a loan it is essential to be able to show a comprehensive business plan that outlines how funds will be used and why they are required; for example, cash flow might be needed to fulfil a large order or to pay tax liabilities. 

Whilst business loans can be used for almost any business related reason, if a business is expanding and investing in a new property this is a clear reason why funds are required.

How to access a large business loan

In the first instance, request a callback from one of our experts at ABC Finance to discuss your needs. To be eligible to apply for a loan your business will need to have been trading for six months or more, and it will need to be based in the UK.

After filling in a simple application form, ABC will seek out the most appropriate lenders for you and negotiate with them on your behalf, guiding you through the application process.

The main documents you will need vary between lenders, however, you are likely to need the following information upon application.

• Proof of company incorporation.
• Bank statements.
• VAT returns.
• Inventories.
• Business plans.

What types of funding are available?

There are several key types of funding that suit a large business loan and can be arranged through ABC Finance, here we examine the main ones: 

Invoice finance

This is an arrangement where unpaid invoices are sold to a third party financier. The financier pays immediately for the invoices and then the debt transfers to them. Invoice financing can help a business maintain cash flow if payments are outstanding for a long time and money is required urgently. It should be noted, however, that a third party financier would likely pay below the outstanding amount owed or charge a fee.

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.

Asset and inventory financing

Asset and inventory financing, also known as warehouse financing provides short term funding based on the value of a company’s inventory or assets, helping businesses manage cash flow tied up in stock. 

This option is often used by smaller privately owned businesses that don’t have access to other lines of credit. Asset financing can fund expansion plans without compromising cash flow.

Unsecured business loans

Unsecured business loans typically up to £500,000, are a form 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.