If you’re thinking of starting a business, or want to take your company forward to the next level, you may be considering getting commercial finance or business loan.
Before you get started, do you understand exactly what business finance is and what it can be used for?
Understanding the basics will help you to make informed decisions to figure out the best business loans options for you.
Luckily, one of our Zobel Finance team can help you make the right call!
What Is Commercial Finance?
Commercial Finance is offered by banks and lenders. It is a loan that can either secured by business assets that you already hold, or unsecured. With an unsecured loan, the lender will require the cash flow of your business to be able to repay the loan.
Why Do You Need Commercial Finance?
Many business owners turn to Commercial Finance as an instant cash injection. It’s very hard to run a business of any size without a strong and regular cash flow so sometimes you’ll find yourself needing a little help and considering using Commercial Finance.
Reasons for using Commercial Finance vary between companies and the industries in which they exist however they include;
- Paying operational expenses – most often payroll
- Buying equipment, vehicles and new technology
- Purchasing Inventory
- Extra cash boost during the quiet months of the year
- Refinancing business debt that you already have
How Do Commercial Finance Solutions Differ?
There are a number of different types of Commercial Finance so it’s worth speaking to one of our Zobel Finance experts to get a better understanding of the best one for you.
Have a think about exactly what you need and what sort of budget you have.
It’s really important not to commit to repayments that you can’t keep up with as this could lead to creating huge debts and defaulting on payments can seriously affect your business and personal credit rating.
The main things you’ll need to consider when choosing the right Commercial Finance for your business include;
- Whether you want a Secured or Unsecured Loan
- Whether you want to choose a Fixed Or Variable Rate
- What Line of Credit to Use
- What Level of Overdraft to Have
Don’t be put off if you do have a poor credit history.
Although rates may be higher, there are still commercial finance options that could be available to you and we always seek to find the best options to give you a second chance at success.