Commercial Loans

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What Is A Commercial Loan?

A commercial loan is a simple financing option that is designed for larger businesses. Much like business loans for SMEs, commercial loans offer a cash injection to an established company for a fixed monthly repayment over a pre-agreed term.

Read on below to find out more or fill in the form to talk to an expert.

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How Do Commercial Loans Work

Commercial loans are usually offered over a term of 1-5 years, however, for larger loans, some lenders will commit to a repayment term of up to 25 years.

Although larger lending is available on a bespoke basis, loans of up to £500,000 are available as standard.

Commercial loans can be offered on a secured or unsecured basis and are usually cheaper than other forms of business loans. This is because borrowing is usually higher and the business larger and more secure.

Funding sources for commercial loans are diverse, from bespoke lenders, high street banks, challenger banks and peer to peer lenders. As this type of funding tends to be at the high end of the market, the number of lenders who are willing to lend tend to be reduced. This is offset by the fact that competition among them to secure a strong client means that excellent terms are still usually available.

Commercial Loan Uses

Commercial loans can be used for a variety of purposes, including:

  • Funding acquisitions, mergers and MBOs (Management Buyouts)
  • Cash flow management
  • Funding growth
  • Cash injections to fund future trade

What Rates Are Available?

Commercial loan interest rates start from as low as 3% for strong businesses. Larger loans may even lead to rates below this figure for successful, established businesses.

The interest rate charged will depend on the strength and credit history of the business that is applying, and the type of product chosen.

Depending on the reason for funding and the sector of the applicant, other products may be used either as an alternative to a commercial loan or alongside it. Various products can be structured to provide the ideal solution to the applicant, on the ideal repayment terms.

Eligibility Details

Although we can offer loans to businesses of any size, larger commercial loans are usually available to businesses who turnover over £1,000,000. Clean credit is preferred, but any minor previous issues that have a strong explanation will be considered.

The Role Of A Commercial Finance Broker

As a specialist commercial finance broker, we are able to structure the appropriate products to ensure the cash injection you need is available and delivered on time. Our role goes beyond just securing you the lowest rate for your circumstances, we listen to exactly what you need, and how you require the product to work for you.

This may lead to a commercial loan being offered in conjunction with other products where required, to fully meet your needs.

Commercial finance is a complex area and needs specialist attention. To get started, discuss your circumstances and requirements with one of our commercial finance experts and we’ll talk through exactly how we can help.


About The Author

This content was produced by our Commercial Lending Director, Gary Hemming. Gary has over 15 years’ experience in financial services and specialises in bridging loans, commercial mortgages, development finance and business loans. He is widely respected in his field and regularly provides expert commentary for specialist trade publications, specialist business press as well as local and national press.

Gary Hemming CeMAP CeFA CeRGI CSP  -  
Commercial Lending Director

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