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If you need cash to invest in your business, then it seems that you are looking for a long term business loan.

A long term business loan is a loan that is to be repaid over a term of 3 to 10 years.

The most obvious place to look for a long term business loan is your bank, as they will already have a relationship with you. Whilst your bank should be able to offer you a loan, and would be delighted to, they might not offer you the most cost effective and flexible deal for you.

Just because you need long term finance, it doesn’t mean that a traditional loan is your only option. There are other approaches to finance that you should investigate and consider. If you are not sure what your options are, or what is best for your business and its future then it would be a good idea to get some free independent advice from a commercial finance expert.

Commercial finance brokers, specialise in matching borrowers with lenders. They will be able to discuss your borrowing needs, tell you what options are available and all the advantages and disadvantages and then help you get the best product for your needs.

An alternative to long term business loans

Asset based lending is a modern approach to finance that is gaining popularity and allows you to borrow money from assets such as your sales ledger and your stock.

Invoice finance is a great alternative to having a long term business loan. Invoice finance consists of Discounting and Factoring. Both of these methods release the cash tied up in your unpaid invoices. Factoring also offers the added benefit of outsourcing the time consuming task of credit control.

Invoice Discounting

Invoice discounting allows you to borrow the cash that you have already earned. Invoice discounting releases the cash tied up in your unpaid invoices, often within 24 hours of raising the invoice.

Discounting works in the following ways:

    • You raise the invoice to your customers for the products and services they have purchased
    • The Discounting company pays you up to 95% of the invoice value often with 24 hours of your raising the invoice
    • You collect the payments from your customers and pay back the lender your debt, plus a small fee

The benefits of discounting are:

  • Its flexible
  • Its controllable
  • You improve your cash flow
  • Its not a loan, you have already earned the money
  • The available working capital grows with your business
  • The more you invoice the more you can borrow
  • You don’t need to offer up assets as security

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