Frequently asked questions about Commercial Loans

Q. Are commercial loans available for people who have had a bad credit history?

Commercial loans are usually assessed on the history of the company, although personal history can be requested. If the business can show good, up to date, healthy accounts this will be considered favourable. Having a bad personal credit history shouldn’t detract from applying for a commercial loan.

Q. How much can be borrowed on a commercial loan?

The maximum amounts a lender will advance will depend very much on the individual lender but it is possible to borrow around £25 million if approved.

Q. Is a commercial loan the only way of raising funds to source equipment etc for a business?

A secure commercial loan is one of the cheapest ways of funding an extension or renewal of business equipment but it can be funded in a variety of ways such as;

• Factoring
• Invoice Discounting
• Business Grants
• Overdrafts

The product used is really dependent on the amount which is required and the repayment term.

Q. Is there an arbitration process if necessary?

Yes, the financial ombudsman can assess any dispute which is not resolved satisfactorily by contacting the lender directly.

Q. What is the best way to compare rates between the different lenders?

By looking at the APR (Annual percentage rate) this gives a clear indication of how much interest charges will be. The APR is calculated as a percentage of the total loan amount and is the interest charge for the year. If the loan was £1000 and the APR was 5% the interest for that year would be £50. When comparing the APR the lower this figure is the less it is going cost in interest charges.

 

Guide Contents

Commercial Loans
How do Commercial Loans work?
Secured Commercial Loans and Unsecured Commercial Loans
Find the best Commercial Loan
Applying for the best Commercial Loan
Frequently asked questions about Commercial Loans
Where to get more help and advice about Commercial Loans

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