Where To Look For Loans Long-Term Loans for my Business

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Where to Look for Loans

Long-term loans

Long term loans are more likely to be provided by insurance companies, pension funds, building societies, 3I's (Investors and Industry) and the institutions which provide industrial property mortgages, many of whom are connected with insurance companies. These lenders look forward to high returns on the funds. Contractual term loans are formalized by a specific agreement to cover a specific purpose, period and repayment programmer, which might match the cash flow of a project.

Medium-term loans

Medium term loans are much more home ground for the banks. Every bank has some form of development lone scheme providing five or seven year money. Most have a start-up loan scheme by which they will lend money to new businesses, and hope to recover their money and make a profit from those that a successful. The cost of schemes, if they involve quality options or royalties, may be difficult to quantify, although in general the banks will want to charge the equivalent of between 3 and 5 percent above base rates of the money lent. The cost of more conventional medium-term finance may be slightly less, and the bank will generally look for security in the form of fixed or floating charge over the companies' assets. A commitment fee is usually charged and the browser is required to pay any costs.
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Short-term loans

Factoring provides sales accounting collecting services and sometimes an element of protection against bad debts; sometimes 80% of the debts are recovered. There is a range of other discounting services, which may not involve managing the sales accounting. They tend to be a little expensive but can the business of time and trouble. The cheapest form of borrowing is often by the simple overdraft. 'Blue Chip' companies have frequently enjoyed overdrafts at a margin of 1 percent above the bank's base rate. Smaller companies usually bear a margin of 2 to 3 percent, with new ...

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