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What are the Types of Finance Available?

When making a decision about raising business finance, it naturally helps to know what the options are – and there are many.

At Funding Track, we will help you gain an insight into what these options are, consider which ones might be most appropriate for your business, and then arrange the required funding.

The potential funding options include:

Business finance

  • The premises you own or are looking to buy and from which the business operates can be used as security for a business loan;
  • this is a commercial loan, secured against the property in question;
  • a commercial loan is different from a residential mortgage (a mortgage for home owners) because – a commercial mortgage is not regulated by the Financial Conduct Authority (FCA) in the same way as a residential mortgage;
  • so, whether you own a retail shop, restaurant, hotel, pub or wine bar, care home, industrial unit, warehouse or office, we can help you secure business finance secured against the commercial premises;

Property finance

  • property finance involves taking security against a property you either already own or may be acquiring for investment purposes;
  • this might be a buy to let property, whether a flat conversion, a purpose built flat, a student let or an HMO – a house in multiple occupation;
  • or it might be a commercial investment property – such as offices, shops, warehouses, or industrial units which are leased to tenants for use as their own business premises;
  • again, any such mortgage is unregulated by the FCA – unless you or a member of your immediate family are living in, or intend to live in, the residential accommodation;

Unsecured business loans

  • we are also able to arrange unsecured business loans of up to £350,000;
  • just as the term suggests, these are loans which do not need to be secured against any of the property or assets owned by your business;
  • unsecured business loans are usually for a shorter term, typically for up to 5 years;
  • many businesses make use of such a facility to meet immediate cashflow requirements or to provide working capital,
  • very often this type of funding is an excellent alternative to a bank overdraft;

Property development finance

  • we arrange funding for the development of both residential and commercial property, including new builds, conversions, extensions and refurbishments;
  • typically, property development is split into two parts – the first is a loan to either purchase a development site or to refinance a site that is already owned, and the second tranche to fund the building works – which is then released in stages to coincide with the completion of each construction stage;

Bridging Loans

  • not only prospective home owners, but businesses, too, may require a bridging loan;
  • this type of short-term funding is typically secured against property or other assets owned by your business, with the loan being made available for practically any purpose, including as a deposit for further property acquisition, to increase working capital in the business or even to pay an existing tax liability;

Asset finance

  • the existing assets of your business – such as plant, machinery and equipment, computers, fixtures and fittings, and vehicles – may be offered as security for funds which are then used to acquire new equipment or for additional working capital;

Invoice discounting

  • invoices not yet paid by your customers have an inherent value, and you can use their value to raise funds either as invoice discounting or factoring – these funds can then be used as working capital to help grow the business or help perhaps to help manage immediate cashflow issues;

Clearly, there are many different types of funding solutions available for your business.

In future blogs, we’ll outline each solution in greater detail, give you the “pros and cons” so you can make an informed decision about what’s best for your business.

Next week – business finance.