Exploring and understanding your options

Exploring and understanding your options

Business loans are a great source of business finance and are particularly suited to long term funding requirements, where the amount of money that you need is not going to change. Loans are also useful for financing things such as assets and start-up capital.

However raising finance for a business is becoming increasingly difficult, whether you’re a start-up or a well established business. There is however a range of different finance options available, and there are still some good deals on the market. So before you make a decision about a particular business finance solution, make sure you look at all the options available to you.

Before considering the business finance options available to you, you need to first understand what you want to achieve with the funding.

Different financial needs will suit different financial solutions. For example if you are looking for funding to start a business your options can include:

  • Invoice Finance
  • Commercial mortgage
  • Asset finance

Due to the range of finance options available, working out what is best for your business and its current needs can be daunting. So it’s a good idea to get some advice from an independent commercial finance professional.

What are your business finance options?

Here are some of the most common finance options available, what they are most suitable for and what they are normally secured against:


Factoring can release up to 95% of the cash tied up in your unpaid invoices, often within 24 hours of you raising the invoice. The Factoring Company will manage your sales ledger, credit control and payment collection process.

Factoring improves cash flow which can help you to grow your business, it can also save you time and resources as the Factoring company chases the payment on your behalf.

This option is most suitable for start-ups or established businesses, which do business with other businesses, with a projected turnover of over 50K.

Invoice Discounting

Invoice discounting is similar to factoring, in the way that it releases cash tied up in unpaid invoices, often within 24 hours of raising the invoice. However it differs in collecting the payment, as with Invoice Discounting you collect the payments yourself.

The benefits include improved cash flow, and also the ability to get greater amounts of finance as the more you invoice the more you can borrow.

Again this option is most suitable for businesses that do business with other businesses, with a projected turnover of over 50K, however this option is typically used by larger businesses who can manage the sales ledger and payment collection.

Asset Finance

Asset finance is used to purchase assets, like equipment, where the cost is spread over a period of time is a similar way to a loan.

The benefits of this option are that the cost is spread over a long period of time to reduce the strain on the businesses cash flow. If the assets appear on your balance sheet you may also be able to qualify for capital allowance gains.

Asset finance is suitable for most businesses, provided that you have a sufficient deposit. Some form of security of guarantee may also be required.

For further information about business loans please contact our advice team on 0800 597 4757 or apply online using the form opposite.