Providing working capital where previously overdrafts or bank loans were provided, but with more flexibility. Unsecured loans are available for virtually any business purpose including acquiring another business, refurbishing premises, recruitment, marketing, funding orders, stock, tax bills, paying other debts and general working capital. The benefit of the unsecured loans is that there is no lien on any assets. Personal guarantees are normally required from anyone owning more than 20% equity in the business. Loans are available for periods of up to 5 years.
As loans are unsecured the finance companies are at more risk and therefore more stringent on credit underwriting and are looking for established and profitable businesses where the owners have good credit searches and don’t have a history of liquidated businesses.
Loans are generally secured against property, but debentures and other assets can also be considered. Increases in property values over recent years has meant that many business owners are sitting on good property equity and want to release some of this to use in their business. Many have gone to try and re-mortgage their property but have struggled with new regulations to prove affordability or have been affected by age constraints.
We can overcome this by providing a loan to the company and securing it against the property by taking a legal charge. These loans are available up to 10 years and can be longer in some circumstances.
Second charges are often beneficial to a total re-mortgage as it means current competitive mortgage arrangements can be kept in place. Loans are usually available up to 70% of valuation on residential properties and 60% on commercial properties.
