Business entities require a regular flow of working capital so that their business should not get hampered. The business requirement may be on a higher side if you are engaged in a manufacturing business. Service based businesses usually have less capital requirement. However, you need to ensure that there are minimum impediments in the business stream, whatever it is engaged in.
Loans are available in the UK financial markets for all small to large businesses. The loans meant for commercial activities may be secured by providing a security in the form of your office premises or business stock. A new business is always in need of financial assistance as the initial stages of are very demanding. The capital expenditures like purchasing plant and machinery, equipments, etc., take a huge toll on the businessman.
If, as a new entrepreneur, you manage to get commercial loans, it is a blessing in disguise.
Secured commercial loans have their own merits like low rates, longer repayment periods and smaller instalments. These types of loans take care of your business fluctuations and allow you to accelerate or decelerate the pace of repayments. As business is such a dynamic activity, you can predict very little but still you have to plan for each contingency.
Online lenders offer commercial loans to the tune of ?250,000 against security. If you cannot provide a security, the loan amount would be restricted to ?25,000 only. Besides, these types of loans, you can avail overdraft facility for short term money requirements. In case you prefer to take a commercial loan against security, the rate of interest will most probably be very low. However, this may not be possible if you are not providing security to the lender.
Commercial loans are also taken for buying commercial real estate. This comes in the category of commercial mortgages. The only difference between a secured loan and mortgage is the type of charge that it creates. In the former case, a second charge is created while, in case of mortgage, a first charge comes into place. First charge means that, in case of default in repayment, the lender has first right over the property in question, irrespective of the subsequent numbers of charges created on the same property. Both types of loans are available with banks and building societies in the UK. As a consumer, you can apply online without any need to personally go to the lender.
