Commercial finance can be confusing to even the most experienced business owners. Changes in legislation and policy updates due to the recent pandemic can be overwhelming and often leave many businesses at a loss when making a decision. Securing not only the right option but ensuring it’s the best option for your business needs.
That’s why is it pays to work with an experienced finance broker who is well versed with policy updates and who is best placed to advise on the most cost-efficient products whilst ensuring the client (you) are securing the best rates on the market.
The most common question we get asked is – What’s the difference between asset finance and commercial finance. And, what is the best option for me?
Asset Finance
Asset finance includes loans that business owners might need to purchase assets such as equipment or vehicles. There are several different options available.
Read More – The Complete Guide to Asset Finance
Now, let’s take a closer look at some alternative finance options commonly available via the commercial finance route.
Commercial Finance
Commercial finance consists of several different types of business loans. These products are often used to free up working capital and improve cash flow.
Overdraft –
Typically used as a temporary loan to cover short term cash flow gaps. The lender charges interest on the amount overdrawn – a very straightforward form of borrowing.
Line of credit –
Typically over an extended period wherein the business has access to funds up to an approved limit. This type of loan offers flexibility because the company can access the funds when needed, thus not paying interest on any unused borrowing. Interest is based on the funds drawn down, and payments are not required until the agreed term ends.
Term Loans –
A traditional loan that is repaid over an agreed term with a fixed APR, typically used by companies who want the peace of mind of fixed payments over a set period of time
Cash Flow Finance –
Also known as invoice financing and used by clients who provide a service or product upfront and offer payment terms, typically 30, 60 and 90 days. A portion of this debt is paid upfront by the lender, which is secured against the outstanding invoice. This enables the borrower (company) to manage their cash flow better.
The CMF Capital Promise
As an independent broker, we have access to the best deals on the market. This is why we have one of the best client retention rates in the industry. Our clients put their trust in us to ensure we find them the best rates available.
Call the CMF team now on 01252 302183 or email info@cmfcapital.co.uk
