A commercial or business loan is a loan to a business rather than a loan to an individual. There are many types of commercial loan, and at Rangewell we can help provide them all.
Commercial Loans: Borrowing that means business
Whatever your business, there's a commercial loan to help you take it furtherSpeak to one of our experts020 4525 5312
- Terms to suit your business
- Competitive rates - from 2%over base rates
- Any scale of business
- Sole trader, partnership or limited company
- Support cashflow
- Invest in growth
- Deal with suppliers
- Take advantage of opportunities
- Asset funding
- Invoice finance
- Merchant Cash Advance
- Commercial, Residential and Land
Whatever your business, there's a commercial loan to help you take it further
Commercial Loans can provide funding for any type or size of business, no matter how big or small, and whether you operate as a sole trader, partnership or limited company.
Table of Contents
A commercial loan is a form of lending that business owners can use to address short-term capital needs. The amount borrowed can be used to acquire new business equipment, build a new space, or pay operational costs and other expenditures.
What is a commercial loan?
Commercial mortgages will take over where a business loan finishes. Typically, business loans of up to £25,000 are unsecured. For more significant amounts, lenders will require security to reduce the risk to themselves.
A business mortgage will usually last anywhere from 3 - 25 years, and you'll usually be able to find a 70-75% mortgage. The measure of the loan-to-value ratio will depend on how much you borrow in relation to how much the property is worth. If it's an investment, then the amount you can borrow will be determined by the rental income it generates, but this usually won't exceed 65% of the purchase price. If you're buying a business that includes goodwill, the amount might be further reduced.
What are the benefits of commercial loans?
Here are just a few reasons you might want to take out a commercial mortgage loan.
- The interest on commercial mortgages is tax-deductable
- If your property does appreciate, your capital will increase
- You'll be able to rent out the property to make an extra income
How do commercial loans work?
Commercial mortgage loans, which are also known as business mortgages, allow business owners to buy a property or a piece of land for their business. It works similarly to a residential mortgage, so the money is borrowed from high street banks and is repaid in monthly instalments, along with interest.
What are the costs of commercial loans?
The following costs are involved in commercial mortgage loans:
- Arrangement fees: These are added to the loan when the loan is approved, but some will request the fees to be covered earlier if you decide not to accept their offer. Arrangement fees are around 1 - 2%.
- Valuation fees: A valuer will visit the property and then give feedback to the lender. Commercial valuations will start at around £500, but costs are based on individual circumstances, which will be payable once the offer has been accepted.
- Legal fees: You'll need to pay both your own legal fees and the lenders' fees, starting at around £500.
How long does it take to secure a loan?
The length of time to complete a commercial mortgage will differ drastically between lenders and individual circumstances. However, the average turnaround will be 8 to 10 weeks.
Types of commercial loans
Mortgage loans can be divided into two categories.
- Owner-occupied mortgages: This will be used to buy premises that will be used for trading for your business.
- Commercial investment mortgages: This will be used for properties you're planning on letting out.
Most commercial mortgages are paid at a variable rate. However, fixed-rate mortgages are available for amounts under £500,000, and the lender will take the rate risk for themselves.
If you need working capital to deal with a cash flow shortfall or want to invest in growth, we can help you find the most cost-effective solution from options that include:
Unsecured Business Lending
Need a smaller sum - from £1000 to up to £250,000 fast?
Unsecured lending can provide smaller loans without you needing to put up security or collateral. New online lenders can often provide fast decisions on unsecured loans, sometimes allowing you to have the funds in your bank on the same day that you apply.
Secured Business Lending
If you need a larger loan, from £10,000 upwards, a low cost secured business loan may be the solution. This can involve putting up assets such as property or even your home as security, which the lender may seize if you don't keep up repayments. A Secured Loan can help you spread repayments over longer periods. They often also have lower interest rates than Unsecured Loans.
If you want to bring in business assets like equipment or vehicles, Asset Funding can often provide the most cost-effective way to spread the costs of leasing the equipment or buying it outright. The loan is secured on the asset itself, reducing the risk to the lender, and hence the interest rates they will charge you.
At Rangewell, we can find asset funding solutions for used as well as new equipment - and we can frequently undercut the finance deals offered by dealers and suppliers.
Why you need Rangewell to arrange the loan your business needs
Not all types of lending are may be suitable for all needs and circumstances. Getting things wrong, with the wrong type of loan or the wrong lender, could mean that you pay a great deal more than you need.
At Rangewell, we cover the entire UK business lending market, from high street banks and the new generation of challenger banks to specialist, niche providers.
We know the most appropriate lenders for different types of lending, and those who will be most appropriate for your business sector. We have personal contacts that can often let us secure finance quickly, and have access to products that are not available on the open market.
It means we can help you find the most appropriate lenders and the most competitive deal whatever kind of commercial funding you need. We can offer flexible terms to suit your needs.
Why you should call us
Whatever your financial needs, finding and setting up the solution your business needs is a major responsibility, and it makes sense to get unbiased expert support.
At Rangewell our experts can help you with every aspect of planning and arranging your loan, as well as finding the most suitable lenders.
We can discuss your objectives, and help find answers scaled to fit your turnover and your other obligations. When you call us, we can explain the options – and help you find the most cost-effective solution.
To find out business finance for buying your next business premises, speak to Rangewell we can arrange loan terms to suit your business needs.
REAL EXAMPLES OF WHAT WE CAN DO
Find a lender to provide an unsecured loan of £50,000 inside 48 hours
Source Asset Finance of £350,000 loan to equip a new production facility
Set up funding for a business in a Creditors Voluntary Agreement
Find a small company a loan at a rate 30% lower than it had previously been offered
Find a loan of £2,000,000 for a property developer
Discover our range of finances
Every type of finance for every type of business
Our goal is very simple - to help businesses find the right type of finance as quickly, transparently and painlessly as possible.
Helping you build your profits
Funding designed to fit your businessEvery business has different funding needs. Whether you need to invest in growth, provide working capital or deal with a cashflow shortfall we can help you find a solution that’s right for you.
Online applicationsSome lenders now accept online applications, and smaller loans may require no paperwork.
The cash you need, fastSome can get money into your business account on the same business day that you apply – ideal if you need to seize an opportunity or deal with a cashflow shortfall.
Scaleable funding for growing businessesIf you are growing your business, you can choose a commercial funding option such as invoice finance which will grow with you, to ensure you can always call on the level of cash you need.
Helping you make the right choiceWith so many different types of commercial funding to choose from, its good to get expert advice. At Rangewell our advisors are ready to help you – with no cost or obligation.
Lenders who specialise in your sectorSome lenders specialise in particular business sectors, and in particular types of funding. At Rangewell, we can help you find the most appropriate lenders and finance products for your needs.
Download Rangewell’s free and detailed guide to Commercial Finance
How does Commercial Finance work?
Find out what Commercial Loans are available, including Commercial Mortgages, finance for other commercial property development, Invoice Finance, plus more.
How can you apply?
What are the costs?
What are the restrictions?
The downsides of Commercial Finance
Paperwork you need to provide with your application
Key terms to check
How important is it to choose a lender that is authorised and regulated by the financial conduct authority and prudential regulation authority?
You may be asked to provide security, which may include your home - does this mean my home may be repossessed if I do not repay what I owe?
What will the interest rate or arrangement fee look like?
Do I need a registered office to look into business finance?
Find out about key financial services terms, including fixed rate loan, variable rate loan and what it means to have debt secured on any property.
Download your Rangewell Business e-Book
Available in ePub, mobi and .pdf format
Frequently asked questions
Have a question?
There are many types of commercial or business loans. In most cases, they provide a cash lump sum to a business, which it can use in any way it needs. Most are arranged with monthly repayments, whih include interest as well as a proportion of the original amount borrowed.
The interest rates on commercial loans will vary greatly. They may depend on such factors as the scale of loan required, the term that it is required for, the sector the business works in and the lender. At Rangewell we cna work to find you the most competitve loan for your particular needs.
They are the same thing - a range of lending products aimed at business users, as opposed to personal loans, which are used by individuals.
The most common form of collateral for a secured business loan is a property you own. Other options (even though less common) are personal assets of significant value, vehicles, trucks, and even business equity.
To find out more about loans for commercial property, speak to Rangewell today.
The rates for owner-occupied mortgages can vary significantly, but most will come in between 2.85% and 6.5%.
The type of lender you choose to go with will determine when you'll receive your loan payment. Typically, most lenders will provide the funds within 5 to 30 days.