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The difference between Fixed and Floating Charges

Fixed and floating charges may apply to large-scale borrowing such as debentures - which are, themselves, a type of Secured Loan available, in the main, to large corporate borrowers.  At Rangewell we help businesses of all kinds borrow funds from banks, financial institutions and other companies in the form of loans to fulfil their monetary needs - which can be for the short, medium or long term. The lender will require security against the loan and so the borrower creates a charge over the assets or lien on the property. The charge refers to the collateral or security provided by the borrower as security for the debt, and usually takes the form of a lien on the company’s assets - something that will be handed over to the lender if the borrower is unable to repay the debt from their business as planned. This will only happen in a small minority of cases, but the ability to take and sell assets to repay the debt will remove much of the financial risk to the lenders, and enable them to to make an advance at a much lower rate than would otherwise be the case.  Two types of charge There are two kinds of charge, which are known as fixed or floating. The former is a charge on a particular asset of the company that is identifiable and agreed when the charge is created. The latter is slightly different, which is created over all the assets of the business and not attached to any definite property. Fixed Charge Fixed Charge is defined as a lien or mortgage created over specific fixed assets like land and buildings or plant and machinery. The most common form of fixed charge is against property, but it can also be secured against the agreed value of intangibles such as trademarks, goodwill, copyright, patents and intellectual property. In this type of arrangement, the lender has full control over the collateral asset. Therefore, if the company wants to sell, transfer or dispose of the asset, then either they need to get the approval of the lender or it has to discharge all the debts first. Are you needing help with funding for your business? Find out more about the types of funding available or apply today With a fixed charge, a lender can ensure it is the first creditor to get repaid any outstanding debt if a borrower defaults on the loan. It grants the lender possession of a borrower’s asset in the event of non-payment, and allows them to sell it to be used to pay off the remaining debt.  Floating Charge A floating charge is a lien or mortgage which is not tied to a particular asset of the company - but rather its assets in general. It covers the assets like stock, and the borrower has the right to sell, transfer or dispose off the asset, in the ordinary course of business. The permission of the lender is not required to sell or use an asset and also there is no obligation to pay off the dues first. The ‘floating’ nature of the charge means these assets might change over time, with the borrower able to move or sell any assets during the normal course of business. It’s only when the lender has to enforce the debenture in a default that the floating charge ‘crystallises’ which means it becomes a fixed charge. From that point, the borrower will no longer be able to deal with the assets unless they have permission from the lender. In an insolvency or liquidation, a floating charge will give a lender priority over unsecured creditors when it comes to repayments. It occurs when: a company is about to be wound up. a company ceases to exist  a court appoints a receiver. a company defaulted on payment, and the lender has taken action against it to recover the debts. It is possible for a lender – or lenders – to have multiple debentures on the same borrower. These can either be fixed debentures against different specific assets, floating debentures, or a mixture of both. There can also be multiple lenders, and when several lenders have a lien against the same borrower’s assets, the lenders will agree priority of payments between themselves. This is usually documented between the lenders and borrower with a Deed of Priority. Do you need a debenture? Some lenders won't lend above a certain amount without a debenture so, regardless of how much you’re looking to borrow, you may need to provide your assets as security. In this case, an Unsecured Loan might be a better option for your business, although it could mean borrowing less and paying a higher rate of interest. At Rangewell, we know that there are many solutions when you need to raise money for your business. To raise the funding that is most appropriate for your particular needs, simply call us for help. Our team of business finance experts work with you to get to know your business and understand the kind of arrangement and features that are right for you, plus our service is free. So whether you need to finance new assets, or are looking for other products such as secured finance or growth finance, Rangewell can help you support your goals. 

The differences between Secured and Unsecured Loans

Whatever your business, you're likely to need external finance sooner or later. Perhaps you want to invest in your business’s growth, or deal with unexpected costs. Perhaps you need to buy in stock, or simply need to keep afloat while you are waiting to be paid.  But getting the most appropriate kind of funding is important. There are many types of business funding but if you are looking at a straightforward Term Loan  – also known as Debt Finance – there are two types to consider: Secured and Unsecured Loans. With both you agree a loan deal with a provider, who will need to be paid back, with interest, over a set period with monthly repayments. Both have their uses, their advantages and disadvantages, and it is important to get the most appropriate kind of loan for your particular needs. Unsecured Loans Lenders make their decisions based on the risk that they might not get their money back. The higher the risk, the higher rate you will pay, and if the risk is too high they won’t lend at all. With an Unsecured Loan, the lender will make a judgement on whether or not to lend based on the creditworthiness of the borrower and their business. The risks to the lender that they will not be repaid are relatively high with this type of lending, so the interest charged will also be high, and the amount they will lend may be limited.  An Unsecured business loan works much like a personal loan. You make an application and, if accepted, a lump sum is paid into your business’s bank account. Interest is charged on the outstanding amount of the loan at a fixed or variable rate, and the lender may charge an arrangement fee which will be added to the repayments. The loan is repaid in monthly or quarterly instalments over an agreed term, usually under 5 years. The advantages of Unsecured Loans Unsecured business loans can be simple and fast to arrange. Lenders can check your online credit score and make a judgement accordingly. Some online lenders will actually make an instant decision, although the amounts offered in this way will tend to be small. The disadvantages of Unsecured Loans The main disadvantage of Unsecured Business Finance is the lack of security for the lender. To compensate for this greater risk they are usually more expensive than a Secured Loan. The lending criteria are also stricter with Unsecured Loans than with Secured Loans. This means that there is a limit to what you can borrow. In most cases, the lender will check your company’s underlying financial health a process known as underwriting, and request various types of documentary evidence from you. Modern lenders can provide a fast service for unsecured lending, but you might expect to have to answer more questions, and possibly to provide more documents in support of your application. The lender will look at: Turnover, revenue and profitability Trading history Forecasts and business plans Your clients/customers You may need to provide a personal guarantee to secure an unsecured loan. A personal guarantee means you as the business owner/ director will become personally liable to repay a loan if the business fails to pay. Companies with more than one director might need a personal guarantee from them all. Looking for business finance but unsure which way to turn? Find out more about applying for business loans Secured Loans Secured Loans are often used to borrow large sums of money, often more than £250,000. They are ‘secured’ because to arrange them, the lender will require something as security in case you cannot pay the loan back. You give the lender a ‘charge’ over your security. This could your home or your business premises if you own them. They’ll have the legal authority to take the asset and sell it if you can’t make the agreed repayments. Secured Loans are less risky for lenders, which is why they normally cost less in the long-run than Unsecured Loans - often known as a low cost secured business loan. But they mean more risk for you as a borrower because your loan provider can repossess your property if you do not keep up repayments. The lender will look at the assets you want to use and make a valuation or inspection. They’ll also check to see if there are any charges already on it. If you want to use your premises as security, it will be worth more to the lender if you own it outright rather than have a large mortgage already on it. Of course, lenders favour ‘unencumbered’ assets.  Once the security has been valued and your loan amount and repayment structure agreed, you’ll give the lender a ‘charge’ over your security. This means they’ll have legal authority to take the asset if you can’t make the agreed repayments. Remember, you can only borrow an amount less than the value of the security you provide. So you can get a £200,000 loan with security worth £100,000. Loans are usually 50–70% of overall asset value. Assets used as security can include: Commercial property: offices, shops, warehouses and factories Commercial vehicles: trucks, vans, cars Heavy machinery:  capstan lathes, CNC milling machines, printing presses These are all 'hard assets’. In some cases, lenders will accept ‘soft assets’ such as your unsold stock or even your intellectual assets. Advantages of a Secured Loan You can have longer to repay, and enjoy lower interest rates, meaning monthly repayments can be lower and easier to fit in with your cashflow. Secured Finance can cut the cost of borrowing, and can help you borrow larger sums of money than other types of lending Lenders may insist on Secured Loans for borrowers with an imperfect credit history, as they know the amount can be repaid. Disadvantages of a Secured Loan If your business doesn’t generate enough cash to meet Secured Loan repayments and you fall behind with loan repayments, the lender can take your security. Requires valuations and legal costs, which you may have to pay for upfront. These due diligence processes mean it takes more time to get the funds. Why you need Rangewell to arrange your business loans There are many lenders, ranging from high street banks and the new generation of challenger banks to specialist, niche and P2P providers. The rates and terms they offer can vary substantially, and some like to specialise in certain business sectors, where they have more experience of the risks and opportunities involved. Secured or unsecured, finding the right business finance lender is essential to minimise your costs. At Rangewell, we work with lenders across the entire UK market, and can search every lending product to help you find the most appropriate lender and the most competitive deal. Our team of experts can help you find the most appropriate kind of finance arrangement, the lenders who work in your sector, and the most competitive deals.  To find out more about working with Rangewell to find better answers to your borrowing needs, call us or apply today.

What’s the difference between an Overdraft and a Term Loan

If you’re looking to borrow funds for your business, you might be considering a range of funding options. Two of the most popular that are considered by most companies are overdrafts and loans. We explain the differences – and round up the pros and cons of both. Term Loans A loan is simple to define. It is an arrangement that lets you borrow a cash lump sum. You repay it, with added interest, usually with monthly instalments. It is also known as Debt Finance. There are two main types. An Unsecured or Personal Loan is based on your creditworthiness as an individual and on the creditworthiness of your business. Secured Finance, on the other hand, will usually be secured against your property – which means that the lender will have the right to take your property if you do not keep up the loan. These can be less expensive – they have lower interest rates because the risk to the lender is lower. For the same reason, they can also provide much higher sums if required. Short-term loans are typically repaid over one to three years, while long-term loans can usually be paid off over a much longer timeframe - and terms or 10 years or more are not uncommon with secured lending. The arrangements can vary depending on the deal, provider and the amount of money you’ve borrowed. Borrowing can range from tens or hundreds to hundreds of thousands of pounds with Secured Loans, but whatever the sum you want to borrow, it’s important to ensure that you’ll be able to afford to repay the amount and have a plan in place to make your repayments on time. The advantages of a loan They can be arranged fast - some smaller unsecured loans can be arranged in a matter of hours The interest rates tend to be fixed so you’ll know what you’ll be paying each month A good credit history is valuable – but it still may be possible to arrange a loan if your history show problems with repayments in the past Loans can be tailored to particular needs You can choose secured or unsecured options in many cases The disadvantages of a loan The interest on a personal loan can be high if you’re only borrowing a small sum Secured loans can allow you to borrow more, but they are linked to high-value assets such as your property - this means if you are unable to keep up with your repayments, there is a risk you could lose your home Loan repayments are usually less flexible – the criteria is set by the lender, so it’s worth talking to them if you think you won’t be able to make them in time If you want to repay your loan early, there may be an early repayment fee Whatever funding need your business has, you can check your options quickly and for free Overdrafts A traditional agreed overdraft facility allows you to borrow money through your bank's current account up to a certain limit. It is very easy to use once it has been set up – your bank allows you to draw down funds that you don’t have in your current account as though you did. You can repay these funds as soon as you have cash available.  You will usually have to pay interest or fees on the money you take out under your overdraft. There may still be a few banks that offer interest or fee-free overdrafts, but these will typically only apply up to a relatively low limit or for a set time. Banks used to offer overdrafts automatically for business banking customers, but many banks no longer offer overdrafts at all or restrict their availability. As a result, Alternative Overdrafts have become more common. With these, no bank account is involved and, instead, there is a line of credit provided by a lender which you may dip into as you require, paying only for the money you draw down and the time in which you borrow it. Overdrafts may give you access to funds of up to £2,000 or so, but how much you can actually draw down will vary depending on both your credit score and your income. Overdrafts have no specific repayment date, but it’s best to try and clear them as soon as possible – particularly if you’re being charged interest. The advantages of an overdraft You have flexible borrowing and repayments, which gives you some freedom to decide how much money you use and repay each month An overdraft tends to be the cheaper option for short-term borrowing, especially if you are you able to access one that doesn’t charge interest It can provide a financial safetynet to help you deal with unexpected costs or take advantage of an opportunity - knowing that the cash you need is ready and waiting Very short-term borrowing - for days or even hours - is simple and cost-effective Disadvantages of using an overdraft The amount of money you can access through your overdraft tends to be lower than with a personal loan Fees and interest charged on overdrafts can be high – especially if you go over your agreed limit – making it an expensive way to arrange funding An overdraft should not be considered as the solution for long-term funding, or for high levels of borrowing because of the costs involved.  Getting help with the funds you need At Rangewell, we can provide solutions both for loans and overdraft replacement funding.  We can help you decide on the most appropriate type of funding for you and search the entire lending market to find the most competitive rates for you and your business. That means, loan or overdraft, we can help you pay less for the funding you need.  To find out more about working with Rangewell to find better answers to your funding needs simply call us. Our service is free.

The difference between loans and debentures

Business finance can seem like a complicated landscape, especially when it comes to industry-specific terms such as debentures, unless you have the right support to decode the jargon. A debenture is a type of loan, but not all loans are debentures. Both are ways for a business to raise money from outside sources, but they operate in rather different ways - and, just to make things more complicated still, the ways these terms are used is different on both sides of the Atlantic. In both the US and the UK, a business loan is a loan, a sum of money which is provided by a lender and which will be repaid, with interest, by the borrower - and usually over a set term (or time period) in monthly instalments.  There are essentially two types of business loan. With an Unsecured Loan, the borrower undertakes to make the repayments, and the lender will make a judgement on whether or not to lend based on their creditworthiness.  The risks to the lender that they will not be repaid are relatively high, which means that the interest charged will also be high and the amount that will be lent may be limited.  A Secured Business Loan can cost less because the risk to the lender is smaller. This is because the loan is secured on something of value. Secured in this case means that the borrower will need to put forward something as security - something that the lender will take and sell to recover their losses if the borrower does not keep up with the loan repayments. When you take out a mortgage to buy a home or a Commercial Mortgage to buy a factory, the property itself is securing the loan.  Business loans are often secured on the borrower's business premises or their home.  Transferring the risk to the borrower in this way allows the interest charged by the lender to be considerably smaller than with Unsecured Finance, and to offer larger sums. At Rangewell, we frequently help arrange Secured Finance in the £multi-million region. All that is required is sufficient security - the value of the security provided must be greater than the value of the loan provided. So, for example, a £750,000 house could not be used as security for a £1 million loan - but it would be perfectly acceptable for a loan of £500,000. What about debentures? In the United States, a debenture is a loan that is backed by the full faith and credit of the issuer. This means that, in the US at least, a debenture is a type of Unsecured Loan, with the high creditworthiness of the borrower prompting the lender to make the loan. So for example, if Apple or Exxon Mobile decided to borrow, their credit is so good that any commercial bank would be happy to underwrite a loan. Technically, it is an unsecured corporate bond that companies can issue as a means of raising capital. These instruments are, therefore, similar to what would be called a large-scale Unsecured Loan in the UK although, in practice, they would be relatively rare in British lending markets.  However, in Great Britain a debenture is a long-term security backed by specific assets.  Debentures allow UK lenders to secure loans against borrowers’ assets, and are the document that grants lenders a charge over a borrower’s assets, providing a means of collecting debt if the borrower defaults. Debentures are commonly used by traditional lenders, such as banks, when providing high-value funding to larger companies. To register a debenture, a lender simply has to file it with Companies House. This can usually be done in a matter of days. So while a US debenture is an Unsecured Loan, in the UK it is a Secured Loan.  With a Fixed Charge Debenture, a lender can ensure it is the first creditor to recoup any debt if a borrower defaults. In essence, it grants the lender possession and ownership of a borrower’s asset in the event of non-payment, with any subsequent sale being used to pay off the remaining debt. The most common form of fixed charge is against property. With a fixed charge, the borrower would not be able to sell the asset without the lender’s permission, and the proceeds would usually go to the lender or towards a new asset, which the lender then places a fixed charge over. A Floating Charge Debenture is slightly different, and can be attached to all of a company’s assets, or specific classes of asset, including stock, raw materials, debtors, vehicles, fixtures and fittings, cash, and even intellectual property. It’s only when the lender enforces the debenture that the floating charge ‘crystallises’ and effectively becomes a fixed charge. In an insolvency or liquidation, a floating charge will give a lender priority over unsecured creditors when it comes to the allocation of repayments. It is possible for a lender – or lenders – to have multiple debentures on the same borrower.  At Rangewell, we know that there are many solutions when you need to raise money for your business and that loans and debentures only represent some of the solutions available.  To raise the funding that you need for your business, simply call us. Our team of business finance experts work with you to get to know your business and understand the kind of arrangement and features that make sense for you. 

£150,000 fit-out funding for a nursery: cutting the cost of growth

If your clients include childrens nursery operators, you will know the financial challenges they face. Owners face restrictions on what they can charge per child, and overheads are high. You may advise a small nursery to grow its numbers as the best route for profitability - but space requirements are specified by the regulations. What’s more, many parents - and children, and probably staff -  may prefer a smaller facility with a friendly atmosphere. They will actively seek out a small nursery, and even be prepared to pay more for a place where there are not too many children competing for attention. We recently helped an accountant find a solution for a nursery operator who had no choice but to grow her business.  “We didn’t have any more room - even though we had built a great reputation and had plenty of parents knocking on our door.” The challenge The accountant's client ran a nursery serving a commuter town and had premises close to the railway station - an ideal position for parents dropping off their children before heading off to work. However, when a major development plan was proposed, it was clear that the nursery would need new premises - and need them fast.  Ready to find out more about finance for your clients' growth plans? Our experts can find the most appropriate solutions and the most competitive rates  Fortunately, the developers were sympathetic, and were able to offer alternative premises nearby. “The offer was a good one financially, and we saw that the new premises would allow my client to offer more places and to grow her business - but the unit was a bare shell, and would need a complete fit out before it could be used as a nursery.” The unit would offer a more spacious environment with more opportunity for active play. It might be possible to provide 60 or 70 places - but the costs involved were daunting.  “My client looked at the costs involved, and realised that she would need to spend around £150,000 to fit out the interior to meet all the regulatory requirements. She came back to us to help her find the most cost-effective way to provide the funding. We contacted Rangewell on her behalf.” At Rangewell, we can help provide any kind of business funding - and the first step in our process is to find the most appropriate source of funding for a particular need.  In many cases, business equipment can be provided by Asset Funding. The items acquired act as security for the loan, which means that rates as low as 4% can be offered - because the lender can simply repossess the equipment if the business defaults on payments. However, when fitting out much of the cost will be for the work involved with decorating and construction, and for ‘soft’ assets such as carpet. These have no potential resale value which means that they cannot be covered by conventional Asset Funding. It may be necessary to arrange a business loan to cover the work - which can often be more expensive.  “Our client received quotes from a leading lender which would mean paying 11% interest on a loan over five years - which would mean repayments that we felt would simply not be affordable from our client's limited cashflow. We hoped Rangewell could do better.” The solution We saw tha,t by splitting the funding into two parts, we could cut costs. We developed a loan package which would provide Asset Funding for all the equipment - seating, lighting and heating systems - and cover the rest with a Secured Loan. We approached a number of high street banks. By approaching those we knew were sympathetic to the sector, we were able to get a loan secured on the owners home for the balance required at just 6% and to spread it over ten years. Her accountant believed that the repayments would be affordable. At Rangewell, we work with over 350 lenders to offer you an overview of more than 23,000 business finance products. We work closely with accountants to help find the most appropriate - and affordable - funding solutions for their clients.  Simply call us on 020 3637 4150 - or email [email protected] Our service is free.

£550,000 Property Finance secured - when the banks said ‘no’

Land and property are always going to be in short supply in the UK. This means that prices will be high - but, if a particular property is within your reach, it may well be an excellent investment. The competition for property, however, means that prices of versatile business property in good areas may continue their historic climb. However, although residential property and established business premises are seen as exceptionally suitable for funding by lenders, there are some surprising exceptions. Land that has no buildings is seen as ‘unimproved’ and may be of surprisingly low value. Many lenders who are considered to be property specialists will not lend on land. This caused a problem for an entrepreneur who wanted to acquire a caravan site in an attractive area of Cornwall. He had found land with easy access in an ideal location close to the coast that was already in use as a caravan site - but although he had a sound business case, he was unable to find a lender to help. “The location - close to the north coast of Cornwall - is a favourite destination of caravanners. I had the site lined up, and informal discussions with the local council told me that there would be no problem with planning if I wanted to expand the existing business - in fact, the local authority was keen on bringing in extra tourists. But when I started looking at funding, I hit a brick wall.” Looking to purchase land for a new venture, or been declined by other lenders. Contact us to see if we can do things differently The challenge The site was large and had access roads already in place, and there were some areas of hardstanding which would be ideal for larger mobile homes. Services were already in place and the site had already been in use for camping for several years. The entrepreneur had estimated that he could have upwards of 120 caravans on site in the first year, and that his revenues would go up after he installed additional facilities during the closed season. But although his projections showed that his business had every chance of being profitable, he could not find the lending he needed. He was happy to put in £500,000 of his own money, but he would need another £550,000 to secure the site. He approached all the high street banks, but none could help him.  “To me, the land was a caravan site and the basis of a profitable business. To the banks, it was just a field.” He came to Rangewell instead.  Understanding the potential Our finance experts understand the property lending market, and we know the challenges our new client faced. The problem is that banks need to see security for a large loan, and that unimproved land is likely to be seen as of minimal value. Agricultural land is not expensive in many parts of the country. The campsite was an established business and had basic amenities - but the shower block and clubhouse were basic, and did not meet the banks' standards for secured lending.  How we helped We saw that there were two challenges to overcome. The first was the fact that the business was seen as a start-up. Business lenders can be reluctant to lend to any business which cannot demonstrate a long trading record. The second was the status of the land as ‘unimproved’. We believed that by approaching specialist property lenders we know who are sympathetic to the camping sector we could secure the funding required.  We were able to secure the funding required at just 5.99% Our client took possession of his site and has already started to look at funding for improvements which will make his second summer season even more rewarding than his first.  “I was able to go ahead with the purchase, and have some cash left over which would go to setting up a shop and bar in the clubhouse. The site is already showing a small profit - now I am confident that I can turn that into a large one. “ We help people with business ideas find ways to put those ideas into practice. Loans, Land Purchase Finance, Asset Finance, Commercial Mortgages, or any other kind of finance - our expert teams find the most appropriate funding solutions while our network of lender contacts and our unique online tool let us find the most cost-effective rates. Our service is independent, fast and absolutely free. Simply call us at Rangewell on 020 3637 4150 - or email [email protected]

How to apply for a Business Loan

Whether you’re a younger SME or a more established enterprise, many UK-based businesses often rely on business loans to gain access to the funds they need for a wide range of purposes. These commonly include growth, debt financing and even refurbishing premises. Yet, despite business loans having been part of the UK lending landscape for a very long time, many business owners still don’t know how they work or how to apply for one, which could be depriving them of an invaluable source of funding. However, it doesn’t need to be this way. If your business needs access to a cash injection for any purpose, applying for a business loan could open the gateway towards a more prosperous future. Why do I need a Business Loan and how much should I borrow? Before anything else, the first step to take involves identifying what areas of your business need funding and what your desired outcomes are. Are you looking to support a long-awaited growth project? Obtain new equipment? Provide training opportunities? Raise your bottom line? Or, do you need capital following a previous financial commitment? Whatever it may be, once you’ve pinned it down, you can then think about how much capital you need to ensure it’s achieved successfully. However, you should also give your business some breathing space too, in case of any unexpected challenges. Just remember not to borrow more than what’s necessary since this can lead to you paying out more money in the long run. Looking to raise funds in order to support growth, innovation or sustainability? Need access to additional capital? Apply for a Business Loan and learn more about how your business could benefit Do I have a detailed business plan? Creating a business plan is essential in order to co-ordinate the efforts of you and your team, guiding you towards specific objectives. However, it’s also a task that many lenders will expect you to have completed beforehand. Without one, you can’t be certain about how much capital you need to borrow and the time frame in which your business can repay it by, let alone whether you can safely afford it. As such, although it takes time and effort, lenders will expect you to clearly outline: Detailed research and reporting in regrards to the sector you’re operating in A statement discussing your experience and those of any associated directors What assets are you’re willing to provide as collateral along with relevant documentation Growth strategy Operation plans Descriptions of products and services Competition analysis Financial assessments Cashflow forecasts Where does my business stand financially? When applying for a business loan, lenders will always want to check where both you and your business stand financially, which will enable them to assess whether you can safely afford the agreementor not. To that end, lenders will usually request permission to review your credit profile. So if you’re considering applying for a business loan, you need to understnad that lenders will incorporate into their checks everything from: Recent and past County Court Judgements (CCJs) Accelerated Payment Notices (APNs) from HMRC Outstanding debts (e.g. credit card debt) A reliable history paying off debt on time Any financial associations Whether you’ve been a victim of fraud How many credit accounts you have How many addresses you’re linked with To how many names you go by All of this information helps lenders to gain a more insightful understanding of your current situation, enabling them to identify the risks that are involved and decide whether to offer you an agreement. As such, the weaker your score, the more interest you’ll be charged throughout the agreement, and vice versa. Therefore, before applying, you should always generate a report using one of the UK’s leading credit agencies: Experian, Equifax or TransUnion. Once you have one, inspect its contents and check whether there are any areas of concern that may be having a negative effect on your score, whilst considering what you can do to improve the situation. You should also look out for any discrepancies, such as misspelled addresses, since they too can prove problematic. Should you identify any issues that are logged in error, you need to get contact the relevant credit agency and provide sufficient proof that their report is incorrect. What type of business loan should I consider? If you’re thinking about applying for a business loan, there are two types of agreements available: Secured and Unsecured. Secured Business Loans If your business possesses unencumbered assets such as equipment, machinery, vehicles or property, you could use them to provide security for Secured Business Loans. Using a Secured Business Loan could allow you to borrow anywhere between £5,000 - £1,000,000, which is gradually repaid using a Fixed Monthly Repayment scheme, plus interest. Because it requires the use of collateral, it could enable you to borrow a larger lump sum and gain a more favourable interest rate (compared with unsecured agreements), but does mean putting your asset/s at risk. So if your business defaults for any reason, lenders will gain the right to repossess these assets. Unsecured Business Loans Unsecured Business Loans don’t require the use of collateral and may allow your business to borrow anything from £5,000 - £250,000, which, again, is repaid using a Fixed Monthly Rate plus interest. Since this means that the lender is exposing themselves to a greater amount of risk (should they approve your application), you may incur a higher interest rate as a result. Could your business benefit from applying for a business loan? At every stage in your business’ development, being able to gain access to sufficient funding opportunities is vital for ensuring the success of your vision. However, raising the funds you require isn’t always easy and can often be a frustrating process. Yet rather than depleting your cash reserves or abandoning your goals, applying for a Business Loan could hold the keys to brighter tomorrow. The challenge is sourcing an appropriate agreement from a reliable lender. Fortunately, help is at hand. At Rangewell, we’re an Access to Finance specialist who’s mapped over 400 lenders to offer you an overview of more than 23,000 business finance products. Our services are free to use and we’ll also guide you through the application process. So if you’re looking to raise capital for your business’ development and future success, apply for a Business Loan today or find out more with Rangewell.

What is a Commercial Property?

Commercial property represents an opportunity for British business owners, giving them the opportunity to expand their operations and penetrate unexplored markets. Regardless of whether you operate in retail, catering, warehousing, technology or construction, commercial property offers a distinct advantage that needs to be seized upon. But in order to do so and take the next step in your development, overcoming the cost barrier is an absolute must - but how? Rather than make a large dent in your finances to support an upfront purchase, there is a more cost-effective solution - Commercial Property Finance. Granting access to a variety of business finance solutions, Commercial Property Finance gives you the means to purchase any type of business premises across either a short- or long-term duration. So what exactly is commercial property and why is it so sought after? What is commercial property? Commercial property covers a wide range of forms and generally describes land or property which is used to generate an income through either the sale of good and/or services, rent or capital gains (investment). As such, commercial property could be suitable for any type of UK business, no matter your sector. Whether it’s office buildings, industrial units, a shopping centre, restaurant, shopping frontages, farm land or HMOs, the next question to ask yourself is ‘What’s in it for me?’ Thinking about purchasing commercial property for your business? Need help supporting the purchase? Apply for Commercial Property Finance and learn more about how your business could benefit. Why should I purchase commercial property for my business? Despite the expense involved, many UK businesses still compete for the ability to purchase commercial property in the local area - and for good reason. Commercial property offers a number of distinct advantages, ensuring the viability of your business, yet in order to help make an informed decision, here are just some the benefits: The basis for a steady income - By deciding to own a commercial property you can choose to rent either a section or the whole property to either another business or household (depending on the type of property). As such, you are able to maintain a steady income through the collection of rental payments each month. More control and flexibility - Owning commercial property as opposed to leasing a workspace gives you more control over how your business operates, not to mention the savings. Plus, you can make changes to the property and adapt it to your own needs and personal tastes without having to ask anyone else, with the exception of planning consent - if you want to alter its structure or if it’s grade listed you will still require planning permission for this. In addition, owning the premises also gives you the freedom to change to how much of the property is being let - if you intend to do so. So you can potentially increase the number of tenants you are accommodating to raise your rental income or, alternatively, decrease the number of tenants to expand your operational capacity. It’s entirely up to you. Appreciation - The property market has been consistently experiencing a year-on-year increase in value so, unlike other assets such as equipment and vehicles which generally depreciate over time, a property is a great way of making a return on your investment should you decide to eventually sell up. Favourable tax treatment - By purchasing commercial property for your business you might be entitled to a number of tax benefits as well. This could include reclamation of interest, amortisation expenses, and services costs on a quarterly basis. Plus, there may be other tax benefits available to you, but it is important to discuss these with, and get the appropriate advice from your accountant or advisor. Prestige - Commercial property is a highly sought-after commodity and by deciding to own instead of lease, it shows customers, agencies and investors that your business is reliable. As such, it may help you to entice customers and/or draw more contracts. Plus, owning commercial property could make it easier for you to gain finance since you might be able to borrow capital against it. How can I finance a commercial property purchase? There are plenty of commercial properties for sale all across the UK. Yet in order to benefit, you need the capital - which is a pitfall for all too many business owners. But rather than rely on your own savings, you could spread out the expense using Commercial Property Finance. Depending on how you intend to use the property in question, you could be eligible for either a Commercial Mortgage, Buy-to-Let Mortgage or a Bridging Loan. However, with each of these products working in different ways to support the costs of purchasing property, speaking with a qualified business finance professional could prove invaluable to you and your business. Thinking about purchasing a commercial property? Purchasing a commercial property is a major decision, and one that shouldn’t be taken lightly. But if this is the course you intend to follow, you need to make sure that you’re fully prepared in advance. One of the greatest challenges of acquiring property for your business is the expense. Bu,t rather than allow it to delay your plans or cancel them entirely, you could explore what the Alternative Finance industry has to offer. Yet with so many different products and lenders to choose from, how can you be certain you’re making a suitable decision for your business’ future? At Rangewell, we’re an Access to Finance specialist and have mapped over 400 lenders to offer you an overview of more than 23,000 business finance products so you don't have to. Our services are free to use and we’ll also guide you through the application process through to drawdown. So if you’re planning on purchasing commercial property but need access to more capital, apply for Commercial Property Finance today or find out more with Rangewell.

Secured Loans: are they right for your business?

Every business owner has goals that they strive towards, but not everyone knows how to achieve them. For many, the single greatest obstacle standing in the way of their aspirations is a lack of sufficient capital. Yet, it doesn’t need to be that way for you. Secured Business Loans exist in a variety of forms, providing invaluable financial support wherever it’s required. However, with so much diversity, this can make it difficult to understand the role that Secured Loans play and what they mean for your business. So, to answer the question of whether a Secured Loan is right for your business here’s a rundown of what you need to know. What are the Pros and Cons of using a Secured Loan? Secured Loans provide many UK business with a variety of benefits that reinforce your business’ growth and ability to succeed. But in order to make the most of the opportunities available and make the right decision, understanding what a Secured Loan involves is essential. The Pros and Cons of Secured Loans. Pros of Secured Loans Cons of Secured Loans Secured Loans exist in a variety of forms including Secured Business Loans, Bridging Loans, Mortgages, Factoring, Discounting, Hire Purchase and Asset Refinance. On account of interest, using a Secured Loan will always cost more than using your own capital. Secured Loans can be short or long-term agreements, making it easier to spread out the cost of your goals. Using a Secured Loan means presenting unencumbered assets (equipment, machinery, vehicles, property or capital) as security, putting them at risk of repossession. Secured Loans can be short or long-term agreements, making it easier to spread out the cost of your goals. Some Secured Loans may require you to make an upfront down payment.                Since many Secured Loans impose no usage restrictions, there’s no limit what you can achieve. The strength of your credit rating will affect how much interest your business is charged, and could potentially lead to a rejection. Compared to most Unsecured products, Secured Loans often impose less stringent application requirements, though lenders will always carry out the necessary checks. Although APR is the most common, some Secured Loans used different methods to charge interest, such as interest per day. Secured Loans tend to charge lower interest rates compared with Unsecured products. Committing to making repayments places additional strain on your finances, and can make it difficult to budget. A choice of repayment options is available depending on the type of Secured Loan you use, including Fixed Monthly Repayments and Deferred Payments. As well as interest, you may be charged additional costs including setup, service and legal fees. Got an urgent project that needs funding? Able to present collateral? Apply for a Secured Loan or learn more about how your business could benefit. Are there any alternatives to using a Secured Loan? Although Secured Loans are a useful way of raising capital in support of a wide range of products and goals, they may not always be appropriate and you could benefit from looking at other finance solutions. Thanks to the rising prominence of the Alternative Finance industry, you could gain access to next-generation business finance solutions, including an array of Unsecured finance agreements, which don’t require the use of collateral. However, in order to source a suitable finance agreement for your business, you need to have a comprehensive understanding of what’s on offer first. This is where speaking to a qualified business finance professional could prove invaluable. Is a Secured Loan right for your business? Driving your business forward whilst trying to establish a tangible presence in your sector isn’t easy, and can often be a frustrating endeavour. But if you need additional funds to achieve your goals, perhaps a Secured Loan could offer you the support you require? All you need to do is choose the most suitable product for your business - which is where we can help. At Rangewell, we’re an Access to Finance specialist and have mapped over 400 lenders to offer you an overview of more than 23,000 business finance products. Our services are free to use and we’ll also guide you through the application process, supporting your journey from start to finish. So if you’re looking to acquire additional capital, apply for a Secured Loan today or find out more with Rangewell.

Business Grants: Advantages and Disadvantages

As a start-up or small business owner wishing to turn your great idea into a thriving business venture, acquiring the necessary funds to achieve this vision can be frustrating. Your size may limit your ability to qualify for traditional forms of business lending, making it all too easy to assume that the capital your business requires lies beyond your reach. But before you decide to look inwards and remove funds from your own savings, you could explore what fundraising opportunities exist in your local area, including Business Grants. However, using a Business Grant has both advantages and disadvantages that need to be acknowledged in order for you to make an informed decision as to whether this is a suitable path for your business or not. Advantages of Business Grants Business Grants offer a variety of advantages to businesses, but these vary depending on the scheme. They are so popular because any funding your business receives doesn’t need to be repaid. As such, you could say that grant money is free money. You also aren’t required to provide shares either, so could receive funding without losing control of your business. In addition, you’ll gain the confidence of knowing that your venture has been publicly endorsed by the scheme’s operator (which could be anyone from a government body, growth hub, industry-specific associate or even a large corporate entity) and use it as a promotional tool. Looking to raise capital for your small business? Need help sourcing a suitable finance agreement? Apply for a Small Business Loan or learn more about how your business could benefit. Disadvantages of Business Grants Nevertheless, there are disadvantages to Business Grants which must also be taken into account. For one, every Business Grant scheme operates differently, so you must read through all entry requirements for each scheme thoroughly to see if you’re eligible, which can take time. That said, some of the most common factors that such schemes take into account can range from sector, niche, location, business plan and financial situation to turnover - highlighting the need for careful planning and research. Also, different Business Grant schemes may be intended to fund different aspects of your business, so you need to make sure that your goals align with the purpose of the scheme you are considering. Yet even if your goals are suitable, you should also check how much capital your business might receive, since such schemes tend to impose limits on how much they’re will provide, based on either a set limit or a percentage. This could result in only a portion of your requirement being met, with your business having to pay out for the rest. In addition, one of the biggest disadvantages of applying for a Business Grant is how popular they are, meaning that you’ll be facing a lot of competition from rival businesses. So even if you manage to meet every entry requirement and present a great pitch, gaining access to additional capital this way could still prove a struggle. However, rather than waste precious time, you may want to seek out other alternatives. Alternative Finance Although Business Grants are a useful tool, there are other ways of raising the funds your business needs to develop and succeed. Thanks to the Alternative Finance Industry, more and more small businesses are gaining access to a wide range of business finance solutions. Whether you’re looking to support growth or maintain reliable day-to-day operations, just some of the products on offer to you include Secured business loans, Invoice Finance, Overdraft Replacement or even Merchant Cash Advance. So if you’re looking to raise capital but can’t afford to wait around for a Business Grant, all you need to do is source a suitable finance solution from a lender you can trust, which is where speaking with a qualified business finance professional could help. Need help sourcing a suitable finance agreement? As a small business owner, exploring the UK lending landscape can feel intimidating. Although Business Grants can be useful during the early stages of your development, being accepted isn’t an easy feat to achieve. But with the Alternative Finance Industry opening the doors to a new generation of lenders and business finance products, there are many other ways in which you can ensure the success of your vision - providing you know where to look. Fortunately, that’s where we can help. At Rangewell, we’re an Access to Finance specialist who’s mapped over 400 lenders to offer you an overview of more than 23,000 business finance products. Our services are free to use and we’ll also guide you through the application process. So if you’re looking to raise money for your business, apply for a Small Business Loan today or find out more with Rangewell.

How hard is it to get a small business loan?

The early stages of your business’ development will, no doubt, be one of the most exciting and dynamic periods of trading. But, it also comes with more than its fair share of challenges, which all need to be overcome if you’re to succeed. During this period, the most common issue that SMEs face usually involves finding the right funding opportunities. The traditional route may not always yield results, but there are plenty of alternative pathways available to small businesses. So whether your goal is to acquire new equipment, carry out renovations, hire skilled employees, maintain day-to-day operations or support an existing growth project, qualifying for a Small Business Loan may not be as difficult as you think. That said, you can improve your chances by making sure that you’re well prepared beforehand. Why do I need the funds and how much is required? One of the first questions you’ll be asked by any lender is why your business needs funding, and it’s up to you to give a clear and concise answer. Although many Small Business Loans don’t impose any usage restrictions, lenders will feel more reassured once they understand your goals and how you will use their investment. In addition, being clear about your goals will also enable you to create a project management plan, making it easier for you to identify key stages, baselines and the amount of capital that’s required. So whether you’re looking to acquire new equipment, replenish supplies, hire skilled employees, support operating expenses or gain a cash injection, clarifying the needs of your business and showing that you know how to make the most of their investment will create a positive impression. Looking to raise funds for your small business? Aren’t sure what funding opportunities are available to you? Apply for a Small Business Loan and learn more about how your business could benefit. Where do I stand financially? Next, you should consider reviewing both your personal and business credit score using one of the UK’s leading credit agencies: Equifax, Experian or TransUnion. Your report should outline details such as CCJs, missed payments, Accelerated Payment Notices (APN), accounts, existing finance agreements and whether you have a history of resolving debt on time, putting you in a strong position to identify any issues which could be adversely affecting your score. Although your score may not always be a deciding factor, depending on your chosen product, it will affect how much interest your business is charged throughout the agreement. Therefore, taking the time to resolve CCJs, settle outstanding debt and staying within your credit limit can all help improve your score, saving your business money in the long run. Should I offer lenders collateral? Naturally, this all depends on the type of Small Business Loan you’re considering. Presenting collateral (unencumbered equipment, machinery, vehicles or property) as part of a Secured agreement can help reinforce lender confidence, which may allow you to borrow more capital and gain a more favourable rate of interest. But, this does involve putting assets at risk of repossession should your business default. Meanwhile, using Unsecured Business Loans don't require you to present collateral. However, this exposes the lender to a greater amount of risk, causing them to impose stricter application requirements and charge more interest as result (though there are some exceptions). As such, it depends on what you value in an agreement. Do you want a lower interest rate or would you prefer to avoid putting any business’ assets at risk? What Small Business Loans could I apply for? By choosing to explore alternative pathways, you’ll gain a more in-depth overview of what the UK lending landscape has to offer, which may leave you pleasantly surprised. So, although being a small business with a limited trading history may cut you off from some financial products, the growing prominence of the Alternative Finance industry is also opening up opportunities to you as well. As such, if you’re looking for a Small Business Loan, you could apply for products such as Secured and Unsecured Business Loans, Overdraft Replacement, Invoice Finance and Merchant Cash Advance, to name a few. Therefore, being small doesn’t mean having to deny your business the funds it needs to grow and achieve a sustainable future. Thinking about applying for a Small Business Loan? Being a small business owner, the idea of exploring what funding opportunities are available to you can feel intimidating. Nevertheless, it is a vital responsibility that needs to be addressed if you’re to support growth, innovation and sustainability. Yet, although you may have a limited trading history, this needn’t be a problem, providing you know where to look for a small business or new business loan. The Alternative Finance Industry is giving more and more business owner access to the funds they need to achieve their goals and reach a brighter tomorrow. All you need to do is source an appropriate agreement for your business. At Rangewell, we’re an Access to Finance specialist who’s mapped over 400 lenders to offer you an overview of more than 23,000 business finance products. Our services are free to use and we’ll also guide you through the application process. So if you’re a small business owner who’s looking to raise capital, apply for a Small Business Loan today or find out more with Rangewell.

What is Invoice Factoring and how is it used?

Acquiring the funds you need to support your business in its pursuit of a strong and sustainable future has never been an easy feat to achieve. Although passion, determination and a detailed, up-to-date business plan are all crucial for effective leadership, without the necessary capital at your disposal you’ll find maintaining your business to be an uphill struggle. However, if you need access funds and fast, the solution could be closer than you think. If your business regularly trades using business-to-business (B2B) invoices, you could reinvigorate your business’ momentum through applying for Invoice Factoring. What is Invoice Factoring? If you possess an annual turnover of no less than £100,000 and are currently waiting on unpaid B2B invoices, you could be eligible for Invoice Factoring. Invoice Factoring is a ‘Secured’ finance solution which enables you to receive up to 90% of the capital tied up in any outstanding invoice worth in excess of £5,000, and for any number of purposes. To qualify, you must give lenders access to your credit profile and be able to maintain up-to-date ledgers. Although you can choose to pursue the debtor yourself, Invoice Factoring does give you the option of allowing the lender to run credit control procedures on your behalf, and with discretion. Plus, it’s also worth noting that some lenders offer Bad Debt Protection, reducing the risk to your business in the event that the debtor fails to resolve what they owe within 120 days. However, what can Invoice Factoring be used for? Does your need access to quick cash? Got money tied up in unpaid business-business (B2B) invoices? Apply for Invoice Finance and learn more about how your business could benefit. What can Invoice Factoring be used for? For many business owners, Invoice Factoring offers a variety of useful benefits. As well as being quick to arrange, sometimes in as little as 48 hours depending on the complexity of the request, Invoice Finance also carries no usage restrictions. This means that the funds you could receive on the back of each invoice can be used for any number of purposes in and around your business. That said, if you are considering Invoice Factoring for your business, some of the most common reasons for using this product include: Supporting uneven cash flow As your business continues to trade you may encounter any number of issues which could adversely affect your ability to perform vital day-to-day operations. This could be as a result of missed payments, unexpected expenses, changing trends or seasonal trade fluctuations. However, whether you’re anticipating problems in the near future or require urgent assistance to smooth out your cash flow now, Invoice Factoring could present you with the funds you need to move forward. Preparing for a vital contract In many sectors, being able to successfully compete for vital project contracts is crucial. But whether from Government bodies or large corporations, you need to get everything ready beforehand in order to demonstrate your business’ capabilities and integrity. However, if you’re currently working on an existing project or have just completed one, you may lack the necessary capital to gather everything you need. Yet, regardless of whether you’re looking to purchase raw materials, gain fresh supplies, repair damaged equipment or pay staff wages, you could raise the funds you require on the back of your unpaid B2B invoices with Invoice Factoring. Training opportunities To produce quality goods and services to keep your customers returning time and again, offering training opportunities to your staff is crucial. However, if you lack the necessary skills and knowledge to expand their expertise, you’ll need to source opportunities from outside your business, for example with university courses or evening classes. Although this will be an invaluable investment in the competency of your team, finding the necessary capital to enable you to do so can be a challenge. By using the capital tied up in your outstanding B2B invoices with the aid of Invoice Factoring, you’ll be able to support and encourage staff members to pursue further training opportunities, allowing you to constantly raise the standard of your business operations. Could your business benefit form Invoice Factoring? No matter where your business stands in its development, supporting your day-to-day operations and seeking more ways to expand is a responsibility you can’t overlook. But as an SME business, acquiring the capital you need to do so isn’t easy. You may already be pouring funds into other area or have capital tied up in unpaid business-to-business (B2B) invoices, limiting your ability to invest further. However, thanks to the Alternative Finance Industry, you now have access to more funding opportunities than ever before, including Invoice Factoring. All you need to do is source an agreement appropriate for your business’ needs. At Rangewell, we’re an Access to Finance specialist who’s mapped over 400 lenders to offer you an overview of more than 23,000 business finance products. Our services are free to use and we’ll also guide you through the application process. So if you’re looking to gain access to quick cash for whatever your business requires, apply for Invoice Finance today or find out more with Rangewell.

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