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If you are looking to borrow money, that you want to repay over three years, then a long term business loan is an option for you.

If you are a new, start-up or a young business it may be difficult for you to get a long term business loan from a bank, because most banks will need the following:

  • some form of security for the loan
  • personal guarantee from a director
  • evidence that your business is financially stable- such as three years of accounts
  • good credit history

As you are looking to make repayments over three or more years the bank will want to be confident that you can do this, they will not be prepared to take any risks.

Alternatives to long term business loans

Just because you are looking for a long term business finance option, it doesn’t mean you are restricted to long term business loans. There are plenty of other finance options which include:

  • Asset based finance
  • Asset lending
  • An agreed business overdraft
  • Commercial mortgage
  • Invoice Finance- Factoring and Discounting

Whilst banks and lenders may want you to take out loans, you should consider all your options, so that you find a finance solution that is as efficient and cost-effective as possible.

You should also look for a finance option that provides you with the flexibility and controllability that you need. You don’t want to find that in a couple of years your needs change and you are locked into a costly loan which isn’t good for your businesses future.

Invoice finance is a great solution for long term borrowing. It is a flexible option that can be described as a revolving loan. That is because you only borrow the amount that you are already owed in your sales ledger instead of borrowing a large sum and making repayments each month.

With invoice finance the more you sell the more you can borrow, and when your customers pay the loan is cleared.

Invoice finance work like this:

  • You raise an invoice to your customer for the goods or services that they have purchased
  • The lender pays you up to 95% of the invoice value
  • You often get the money within 24 hours, rather than waiting 30-90 days for your customers to pay you
  • When the customer does pay, the balance is settled, minus a small fee which you pay the lender.

Invoice finance is a quick, flexible, and controllable finance solution, that requires no security.

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