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A fixed rate business loan is a tradition form of business finance, and several years ago, taking out a fixed rate business loan from a bank was the only way that you could get extra cash to finance your business.

A fixed rate business loan is where the business owner borrows a fixed sum of money, and repays this monthly over an agreed team, with a fixed interest rate. So you know what your repayments will be for the life time of the loan.

In today’s business world, you and your business probably want something more flexible than this, which is why over the last few years the ways to borrow money and finance business have increased dramatically, giving today’s businesses a wide variety of choices.

Asset based lending has become increasingly popular recently. Asset based lending means that you can borrow money based on the value of something you already own. So for example this could be a physical asset like a building or the money tied up in your unpaid invoices.

Is a fixed rate business loan right for me?

A fixed rate business loan is usually secured on a physical asset, and as a result this can mean that the loan takes time to set up. Because of the security required to access these loans, businesses often have to demonstrate to lenders a track record of consistent good performance over several years. This can be quite restrictive for business and it makes accessing these types of loans particularly difficult for younger businesses.

The benefits of fixed rate business loans are:

  • You can make the repayment over a number of years
  • You can use the loan for whatever you want
  • You can often pay interest monthly or quarterly
  • Lenders offer highly competitive rates

However there are plenty of reasons why a business fixed rate loan is not as flexible as other forms of asset based lending.

Invoice Finance

A more flexible solution which is gaining a great deal of popularity in the business world is Invoice Finance. Invoice Finance is a process where you borrow against you sales ledger, so instead of waiting 30-90 days to be paid by your customers, the lender pays you often with 24 hours of you raising the invoice. The loan is then settled when the customers pays the invoice.

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