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Things to consider when dealing with a Commercial Loan

Published on 21st December 2018 - Last update on 4th July 2020

In order to remain competitive, continually growing your business is crucial. But if finances are tight, applying for a Commercial Loan could be one answer. Covering a diverse range of business finance products and packages, including Working Capital Financing, Commercial Loans offer you the aid and support necessary to achieve any number of business projects. However, as well as weighing up the benefits of Commercial Loans, it also pays to be aware of what else it may mean for your business so that you’re able to make an informed decision. So if you’re considering applying for a Commercial Loan, here are just some of the aspects you need to be aware of:

  • Costs of Commercial Loans
  • Some product may require collateral
  • Additional costs and fees may apply
  • Lengthy application process

What is the cost of a Commercial Loan?

Although Commercial Loan products allow you to fund and spread the spread out the total cost of projects, purchases and so on, it will cost more in the long run as opposed to using your own funds. The reason for this is that, even though lenders want to help your business succeed, they also want to earn a return on their investment which is achieved by applying interest. However, you can reduce the cost of finance by comparing products from different lenders and assessing what factors they take into account when deciding which rate of interest to offer your business.

Looking to fund a long-awaited business project? Or is your business simply in need of more cash? Apply for a Commercial Loan today or find out more about how your business could benefit.

How long does it take to apply for a Commercial Loan?

This depends on the type of Commercial Loan you’re applying for and the complexity of your request. While some products can take up to a week or more to arrange, other products could be agreed in as little as 48 hours. As such, when considering finance, try to give yourself ample opportunity to assess what products may be available. But if you are short of time, don’t panic. There are still plenty of Commercial Loan products that can help, even at short notice.

What does it mean to offer collateral on a Commercial Loan?

Although there are plenty of Unsecured Commercial Loan products available, those that are Secured will require you to present collateral for the agreement. Depending on the type of finance solution you’re considering, collateral can be offered in the form of valuable equipment, machinery, vehicles or property to intangible assets. Offering collateral gives lenders more confidence, especially when dealing with large sums because they’re able to repossess the assets in question should your business fall behind in the repayment process. However, it’s worth noting that secured products generally charge less interest than those that aren’t.

Are there any additional costs involved with a Commercial Loan?

As well as interest, some lenders may apply a number of different, additional costs and fees for certain business finance products. Depending on the product, these charges can range from arrangement fees, administration, legal costs and missed payment penalties to exit fees. Therefore, before signing any contract, make certain that you fully understand how the lender charges for the use of their product. By acquiring a full rundown of these costs you’ll be able to evaluate the total cost of finance and determine whether another product would be more suitable.

Is your business in need of a Commercial Loan?

Innovation, growth, and expansion are all important aspects of running a successful business, but achieving this can be difficult, especially if you’re planning on using your own capital. However, using your own capital can be risky, potentially depriving your business of the cash it may need later. Yet, rather than put undue strain on your business, you could take a different route and apply for a Commercial Loan. Allowing you to spread out the total cost of purchases and other business projects into manageable repayments, a Commercial Loan might just be what you need to push back the limits of your business for a brighter sustainable future. So if you’ve got a project that needs financing, apply for a Commercial Loan or find out more with Rangewell.


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David Harrison

David Harrison

Content writer
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