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Types of Commercial Loans

Common types of Commercial Loans

When it comes to commercial and business finance, there is no standard template and no magic formula. Every application is different and the key is to make sure we understand what you want to achieve.


Tailored business finance


Typically our clients fall into two camps:

  • Those who are looking for a better rate or their current bank simply doesn’t want their business any longer
  • Those who the banks have turned away but they still have a good project which needs funding

In five minutes we can get a good picture of what you are trying to achieve. We will either offer a solution ourselves, or point you in the right direction. This is specialist stuff which shouldn’t be rushed so we will give you a specialist to talk to and find the right solution for you.


Typical types of commercial loans include:

  • Commercial Owner Occupied Mortgage – A mortgage provided for a company / business wanting to purchase premises to trade out of.
  • Commercial Investment Mortgage – Mortgage provided for someone wanting to buy premises that they will own but then rent out to a separate company with a commercial lease in place. (Effectively a business version of a residential Buy to Let mortgage).
  • Semi Commercial Mortgage – Mortgage provided for premises that have a mixture of commercial & residential use e.g. shop on ground floor and flat above.
  • Non Status Commercial Finance – These are loans made to a limited company where there may be underlying difficulties. These can include poor accounts, bad credit, bank loans called in, tax bills overdue. The company can secure the loans against commercial or residential property by way of a first charge, second charge or third charge.
  • Development Finance – Mortgage provided for someone wanting to purchase a building plot that they intend to develop into various properties either commercial or residential that they will then sell on.
  • Unsecured Business Finance – Funds provided for a limited company lent on an unsecured basis over a short term.
  • Invoice Finance/Factoring – Commercial funds secured against a company’s outstanding invoice book. Most companies provide a service / product but won’t get paid straight away. They may allow the customer a grace period of anything up to 90 days to settle the debt. With the above provision of funding, the company can receive an injection of funds equal to a % of their outstanding invoice book value to aid their cash flow. Also, to keep their customers happy with extended payment terms.
  • Asset Finance – Commercial funding secured against company assets. This product allows them to raise money against things like machinery, vehicles, plant etc for most business use. It would typically be classed as short term finance lending and repaid over a 5 year period.

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    Promise Money is a broker not a lender. Therefore we offer lenders representing the whole of market for mortgages, secured loans, bridging finance, commercial mortgages and development finance. These loans are secured on property and subject to the borrowers status.

    More than 50% of borrowers receive offers better than our representative examples

    The %APR rate you will be offered is dependent on your personal circumstances.

    Mortgages and Remortgages

    Representative example

    Borrow £270,000 over 300 months at 7.1% APRC representative at a fixed rate of 4.79% for 60 months at £1,539.39 per month and thereafter 240 instalments of £2050.55 at 8.49% or the lender’s current variable rate at the time. The total charge for credit is £317,807.66 which includes £2,500 advice / processing fees and £125 application fee. Total repayable £587,807.66

    Secured / Second Charge Loans

    Representative example

    Borrow £62,000 over 180 months at 9.9% APRC representative at a fixed rate of 7.85% for 60 months at £622.09 per month and thereafter 120 instalments of £667.54 at 9.49% or the lender’s current variable rate at the time. The total charge for credit is £55,730.20 which includes £2,660 advice / processing fees and £125 application fee. Total repayable £117,730.20

    Unsecured Loans

    Representative example

    Annual Interest Rate (fixed) is 49.7% p.a. with a Representative 49.7% APR, based on borrowing £5,000 and repaying this over 36 monthly repayments. Monthly repayment is £243.57 with a total amount repayable of £8,768.52 which includes the total interest repayable of £3,768.52.


    THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME

    REPAYING YOUR DEBTS OVER A LONGER PERIOD CAN REDUCE YOUR PAYMENTS BUT COULD INCREASE THE TOTAL INTEREST YOU PAY. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.


    Promise Money is a trading style of Promise Solutions Ltd – Company number 04822774
    Promise Solutions, Fullard House, Neachells Lane, Wolverhampton, WV11 3QG

    Authorised and regulated by the Financial Conduct Authority – Number 681423
    The Financial Conduct Authority does not regulate some forms of commercial / buy-to-let mortgages

    Website www.promisemoney.co.uk