Our website works better with cookies. Browsing on means you agree to our Cookie Policy.

Commercial Finance

ENHANCE YOUR BUSINESS WITH IDEAL4FINANCE – THE FINANCE SPECIALISTS

It is not uncommon for businesses to seek financial assistance, whether this is a start-up loan, a cash injection for expansion or cash flow assistance; Irrespective of the circumstances, Ideal4Finance provide a number of both secured and unsecured finance options for small, medium and large businesses. Finance applications are quick, simple and all we require are the following details:

  • How much finance do you require?
  • How long have you been trading?
  • Are you prepared to offer security for this finance?
  • How is your business credit rating?

Following your enquiry your details will be passed on to our Commercial Team and you will be contacted within 24 hours to discuss your requirements further. Eligibility or suitability for any finance option will depend on 3 key factors: credit history of the applicant, profitability of the applicant sand the availability of any security.

Short Term unsecured business loans can be arranged very quickly. What's more, there is usually no necessity for a lot of documentation which is typically required for other loans; consequently this can help speed up the process. These types of loans are seeing the biggest growth in popularity over the last 12 months, and with new lenders appearing all the time, the criteria is changing regularly.

You can borrow up to £120,000* (available within 24 hours) or up to £500,000* (within 7-10 days).

The repayment term of the loan is generally 12 months however, some providers offer 15 or 18 months and most (but not all) allow you to make repayment early without a penalty.

The cost of the loan is a monthly interest rate (anything from 2-6%) and occasionally with a set-up fee of around 5% (deducted from the advance and not charged up front). In general, the providers with low monthly charges will ask for a set-up fee but those with a high monthly charge will not.

Short Term Business Loan providers are often more tolerant of adverse credit than other lenders, so for those with CCJs or defaults, this could be a preferred option.

It is preferable that one of the applicants is a homeowner, however they will not be asked to put a charge on their property.

One lender will lend up to £50,000 - regardless of the financials of the business - as long as the applicant is a home owner (or can secure a Guarantor who is a home owner) with sufficient equity and has clean credit. This is a great option for start-up businesses.

A Merchant Cash Advance allows retailers who process debit/credit card payments to obtain cash using their card sales as security. Repayment's made via a percentage of card sales, providing a flexible option for clients with adverse credit history.

Merchant Cash Advances are available to any business that processes debit/credit card payments. We look at the last 12 months’ statements and calculate the average turnover, which is typically the maximum that can be given as an advance.

A fee is added to give the total amount you need to repay. The fee is typically 30% but varies from 25-38% (i.e. get an advance of £10,000 and based on a 30% charge this means you must repay £13,000).

Merchant Cash Advances can be issued in circumstances where there is heavy adverse credit (CCJs, defaults and even if the owners/directors of a limited company are in an IVA).

No security is required, the applicant does not need to be a homeowner and the approval rate is very high (circa 90%). In addition, the retailer does not need to change their card provider.

The length of time to pay out depends on who currently processes the applicant’s card payments. This can be as little as 5 days or anything up to 2-3 weeks.

We see this product as most popular within the hospitality trade (hotels, restaurants, pubs etc.) especially where there is a seasonal trade that leaves cash flow tight for several months of the year.

Invoice Finance sees you pay for your invoices without having to wait for the payment term. You have the choice of either: Factoring, Invoice Discounting or a recent innovation, Invoice Trading (i.e. crowd funding of your invoices). Technically, this is an unsecured finance option as it doesn’t require any property to secure on however, the “security” here is the invoices a company generates and most providers will ask to place a debenture on the company as well.

Invoice Finance is aimed at larger companies who operate in the B2B sector, issuing invoices for work they have completed.

Receive up to 100% of invoices funded within days of issuing them (100% in exceptional circumstances however, 80% is more typical).

Two broad options:

  1. Invoice Discounting
    A formal arrangement that sees every invoice you issue get funded whether you require this or not. Available only to larger companies with a certain minimum turnover (circa £500,000) and has minimum contract lengths. In the long run if you are financing a lot of invoices, this is generally cheaper.
  2. Factoring/Single Invoice finance
    As the name suggests, this allows the financing of one-off invoices on an ad-hoc basis. It is, however, more expensive. A third option is Invoice Trading which allows you to “crowd-fund” your invoices via Internet platforms. The cost here is low but the quality of the Debtor must be good.

You can use an old pension or a SIPP to invest in your business via a loan. The process is subject to HMRC rules, subsequently the loan will need to be secured, be at a commercial rate and for a defined term. This allows a business owner to transfer a private pension they have into a company scheme and then - as the trustee of that scheme - issue up to 70% of the fund as a loan to the business.

There are rules and regulations in respect of how the loan is set up and how much loan you can provide as well as the security that is required, however the most common form of security is Intellectual Property which is fully permitted under HMRC rules.

If correctly administrated, there is a double benefit here with the business receiving a cheap loan (usually around 6% is recommended) as well as having access to future finance once the process is set up; in addition the applicant’s pension has an investment earning 6% pa.

A minimum pension pot of £80,000 is required and fees are circa £7-10,000 depending on the size of the pension.

With a Commercial Mortgage you can either purchase the building your business is in or buy property for investment purposes. We search through both High Street banks and private lenders to find the best deal for your circumstances.

Up to 70% LTV available depending on the nature of the property, the location of the property, the credit score of the applicant and the profitability of the applicant’s business.

Up to 100% finance can be provided if there is additional property on which a first or second charge can be placed.

Terms are up to 25 years and rates are 3.5%-6.5%.

Whilst first charge loans are most common, we can also offer 2nd, 3rd and even 4th charge loans subject to LTV for periods up to 10 years but they are more expensive (circa 18-20% AER).

Non-status loans are available for those with no income or poor credit but LTVs are restricted and they are more expensive.

We charge a 1% broker fee, the lender usually charges an arrangement fee of 1-2% and it is also standard for the borrower to pay the lender’s legal and valuation fees.

Asset Finance allows you to acquire cars, vans, lorries, equipment, plant and machinery for your business with fixed rate finance over a 3 or 5 year term. You can either buy the asset outright or lease it as suits you.

Generally up to 80% of an asset value can be purchased on finance usually over 3 years but 5 years is also possible.

This market talks in terms of “flat rates” which are different (and often lower) that the Annual Equivalent Rates (AERs) used in other markets. Typically we see flat rates of 4-7% which is AERs of 7-12% (depending on loan term).

Two broad options are:

  1. Hire purchase, which sees you buy the asset outright.
  2. Leasing, this sees you renting the asset without ever owning it, although you may have an option to buy at the end of the term. Each option has cash flow and tax benefits and which is most suitable depends on your individual circumstances.

This type of finance is mostly used for purchasing vehicles and machinery.
Generally Asset Finance is only available for new assets but some assets can be refinanced.

This is a great option if you have poor credit - or indeed no credit - as it is focused solely on the asset and you can use any valuable asset you own as security for a loan for periods of up to 3 years. Payment is available within days and this finance option can be used with either Personal or Business Assets.

Up to £50,000 available for a period up to 3 years.

Any asset can be used as long as it can be taken and held by the lender for the duration of the loan.

Think of this as a long-term pawn broking option for business purposes.

An upfront fee of £395 is charged to value the security. Rates thereafter are approximately 30-40% AER.

Nowadays you don't have to go to your bank for an overdraft since there are several private firms who will provide you with a flexible overdraft facility ranging from a few thousand pounds up to as much as £500,000. As the name suggests, this is a facility from which you can draw down or pay back within pre-approved limits.

Up to £500,000 is available.

There is a fee to have the facility of about 0.5% per month and also a per day charge on any funds used of approx. 0.1-0.3% (all rates depend on credit).

Available only to limited companies in England & Wales and they must have been trading for at least 6 months.

Good credit score required and security in the form of either a property or invoices are essential in addition to a debenture over the business.

Can be arranged in less than a week.


* Accurate at the time of publication but maybe subject to change.

Crowdfunding is a relatively new finance solution and one that you may have heard about in the news and online. Crowdfunding involves borrowing from several small investors simultaneously rather than from a financial institution. Crowdfunding loans are attractive as they can often be achieved at a cheaper rate than those offered by conventional institutions.

To qualify for crowdfunding:

  • Your business must be profitable
  • You must be able to provide evidence that repayments can be met; crowd funders assess historical data and will not lend against projections.
  • Businesses need to be established for a minimum of 2 years*, be profitable and have a clean credit profile.
  • Owners and Directors will also need to pass a credit check.

There are further options available for Limited Companies however; Sole Traders and Partnerships can also receive funding.

Rates depend on credit and vary from circa 7% to 17% (AER)*. As a rule of thumb the maximum loan available is 25-30%* of the annual turnover of the business.

All loans require Directors’ Personal Guarantees and loans greater than £50,000* may also require at least one Director/Partner to be a home owner.

Full financial accounts, management accounts and/or bank statements are required as well as details of existing borrowing.

For Crowdfunded Business Loans, the whole process takes around 7 to 10 days from when we receive your data to funds being transferred to your bank account.

Apply for Commercial Finance