Long Term Business Loan
If you want to borrow money that’s repayable over more than three years, you’re looking for a long term business loan.
If your business is relatively new or small business it may be difficult to secure a long term business loan from a bank. Three years is a long time in business and banks need the confidence that you’ll be able to make the repayments.
They’ll want evidence that your business is financially stable, such as three years of accounts. They will also want other assurances, often in the form of security for the loan or a personal guarantee from a director.
Alternatives to a Long Term Business Loan
Whatever the reason for your business to borrow money, there are plenty of options beyond a bank loan. Alternatives include:
- Asset leasing.
- Asset based finance.
- Agreed overdraft.
- Commercial mortgage.
- Invoice finance – factoring or discounting.
Banks and other lenders want you to have the money, because that’s their business. What you need is a way of borrowing money that’s as efficient and cost-effective as possible, giving you what you need.
You don’t want to be locked into a finance arrangement that’s inflexible, or ties up assets as security. That’s why invoice finance – factoring or discounting – offers so many advantages.
The Flexibility of Invoice Factoring or Discounting
Invoice finance can be described as a revolving loan. It’s not like a long term business loan where you repay a fixed amount every month. Instead you effectively borrow money that you’re already owed – in your sales ledger.
It works like this. You raise an invoice on your customer and the lender pays you up to 90% of the invoice value within days – rather than the weeks the customer will take to pay.
When the customer does pay, the balance is settled less a small fee. But by then you’ll have raised other invoices, and been paid further advances.
Because you’re borrowing money you’re already owed, invoice finance doesn’t require security. You can borrow what you need, when you need it. The arrangement can last for as long as you want.
Find out how much you could release from your sales ledger instantly online >>
Touch Financial Can Help You
If you want to know more about the alternatives to a long term business loan, we can help. As the UK’s leading online commercial finance broker we help all sorts of businesses to find the best finance deals.
We save you time and money by deciding what product is right for you and introducing you to the right lenders. What’s even better is that our service is free to you.
Our expert finance team have the knowledge and experience that will make a difference to your search for the right finance option. Put them to the test now, with a no-obligation quote or consultation.
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