Do You Need A Medium Term Business Loan?
Is your business looking to borrow money that’s repayable over a term of between 1 and 3 years? That’s a medium term business loan.
It’s a very common way to borrow, and it’s one way to fund business development. The money can be used in a variety of ways to fund growth including:
- Opening new premises.
- Buying new equipment.
- Developing a new product.
- Purchasing new stock.
But in the same way that there’s more than one way to develop a business, there’s more than one way to finance it. Just because a medium term business loan is the most common solution it doesn’t mean it’s right for you.
Alternatives to Business Loans
It’s good news if your business development succeeds in growing turnover and profitability. But it can lead to your cash flow being squeezed. You can get trapped in the gap between needing to pay suppliers and waiting for customers to pay you.
At times like that the burden of making medium term business loan repayments can become a major problem. Which is why alternatives, like invoice factoring, are becoming more popular.
Invoice Factoring Explained
Factoring is different from a medium term business loan, because it’s based on releasing the money in your sales ledger.
The organisation advancing you money, the factor, will let you have up to 90% of the value of your invoices, giving you a valuable cash flow boost that could be equal to the value of the loan you might be considering.
This means if you have a sales ledger with debtors worth £100,000, you could release up to £90,000 in cash. The process works like this:
- You raise an invoice on your customer – eg for £2,000
- The factor immediately pays you up to 90% - £1,800
- The factor carries out credit management and collects the debt
- The factor pays you the balance of £200, minus their fee
If necessary, factoring can be carried out confidentially so your customers are not aware.
Find out how much you could release from your sales ledger instantly online >>
How Could Touch Help?
We want to hear from you because we know we can help. Thousands of other UK organisations have found the right finance solution through us, so we’re confident we have the experience and expertise to solve your finance need.
We’re independent, impartial and our service costs you nothing. We’re funded through introduction fees from the finance organisations we work with, which include Lloyds TSB Financial Service and the Bank of Scotland.
Our team of commercial finance experts is ready to give you the help and advice that you need. Why not get in touch with Touch today?
Compare factoring quotes instantly online >>
Also in this section:
- Read more about business loans UK wide
- Short term business loan
- Business IT Loans Overview
- Learn more about a business development loan
- Medium terms business loan overview
