What is commercial property funding?

Commercial property funding is a wide reaching term, but it is a finance offering that provides businesses, both big and small, with a massively useful mechanism for raising finance and growing their organisations. Well, worth the 5 minutes it will take you to read this article to discover.

Commercial property funding allows businesses to borrow money to purchase or improve a currently owned commercial building. However, it also can be used to define the service many lending institutions offer that uses property as collateral against which to borrow money for any business purpose.

Commercial property funding plays a vital role in the UK business sector, as it helps companies to purchase their own property assets, which may appreciate in value over time. These commercial properties can also be used to leverage the best rates for borrowing against providing companies with a major cash injection in order to fund future expansion plans.

In order to get the most out of your commercial property, it is important to understand all the financial options that you have. Here, we explain a little more about the top three ways to obtain commercial property funding.

Bridging Loans

A short-term finance option, bridging loans are secured on land, residential and commercial properties and can give businesses a short-term cash injection so that they can purchase the property that they want. Bridging loans provide an ideal solution for companies that find they are unable to release the equity that is currently tied up in an investment or asset. While bridging loans generally have higher rates and charges than normal mortgages, because of their short-term nature these will not bite for long.

Commercial Mortgages

For companies that are looking for funding to buy a property, commercial mortgages are the perfect financial package. Commercial properties are a sound investment for businesses or every size, and of course it is also possible to refinance a property in order to get another cash injection further down the line. With all interest payments tax deductible on commercial mortgages, they are a great future investment, especially as you’ll no longer have to pay rent.

Commercial development finance

If your company is in the business of building, developing or renovating properties, then commercial development finance is an excellent way to fund your projects. With the option to refinance your new development in the future, it is wise to develop a long-term relationship with your finance provider and research the field, which includes High Street development loans, top-up money and specialist lenders.

To find out more about commercial property funding, take a look through our site, or call us on 0844 740 7747.

What is commercial property funding?

How your assets and equipment could finance business growth

Over time, many businesses find that their capital has become tied to their assets and equipment. Releasing the equity within these assets is therefore a great way to free up much needed funds, which can then be reinvested into the business in different ways. The simplest and easiest way for businesses to free up this capital is through asset and equipment refinancing.

Similar to re-mortgaging a house, equipment refinancing involves an asset management firm either buying your equipment and then leasing it back to you, or if you have yet to buy it outright, paying off your original loan and then offering you a new loan with lower and more affordable interest rates and payments instead. This financial model is especially useful for companies that have a lot of expensive equipment, whether it is medical, agricultural or IT related. Whatever the asset, equipment refinancing could really help you to build the funds you need to expand your business.

Here are our top five reasons for making use of this financial model.

It’s a great way to inject capital into your business 

 

1. If you own your assets outright, refinancing them can be a great way to inject a large lump sum into your business. And, as the monthly repayments are kept low you’ll be able to reinvest this money back into your company’s continued growth.

• It can reduce monthly repayments 

 

1. When you refinance your assets, they’ll be sold back to you at a lower monthly rate and with reduced interest, as when an asset is refinanced the figure is based on the market cost minus 30%. This will then allow you to use the money that you are save in other areas of your business.

• You can continue to use the asset after it has been refinanced 

 

1. Refinancing your equipment will not affect your use of the asset, and you will be able to carry on using it throughout the process. This means that man-hours will not be lost, and productivity and service levels will not be affected.

• The capital raised can be used to buy other assets or equipment 

 

1. The capital that you raise from the sale and leaseback of your assets to a refinancing company or through reducing your monthly payments, can then be put towards purchasing other vital equipment or marketing efforts to build your organisation.

• The money you save can be used for anything To find out more about equipment and asset refinancing, take a look through our site, or call us on 0844 740 7747.

 

The money that you save through refinancing doesn’t have to be used for purchasing new equipment though, it could also be used to pay staff wages, rent office space or to buy new services; the options are endless, and yours to decide upon.

How your assets and equipment could finance business growth

Reasons to use Asset Finance and Leasing

Asset finance and leasing is an excellent way to boost your company’s competitive edge by cheaply providing you with access to the resources and equipment that you need to grow your business. Whether you’re an SME or a long established firm, this can offer your organisation real benefits.

 

Buying equipment or assets for your business can be prohibitively expensive, but it’s not just the cost of purchase that needs to be considered, there’s also the cost of depreciation on your balance sheet to consider. This is a simple and thrifty solution that ensures you can always have the very best vehicles, kitchen appliances, computers, mobile devices or anything else that your business needs, with far fewer of the risks and costs of ownership.

 

Here are our top 5 reasons to use asset finance and leasing.

 

• Lack of Debt 

 

1. Making use of asset financing can help you to keep your other financial options open. As operating leases, which are used to acquire assets or equipment on a short to medium term basis, are classed as an expense. Therefore, using asset financing will not affect your credit rating, leaving you the room to borrow money from other sources if and when you need to.

• Stronger Cash Flow  

 

1. Leases are a great way to free up your company’s cash flow and help keep your monthly costs under control. As most operating leases allow you to pay via small and regular monthly payments, you’ll be able to invest the money you save back into your business and the services that you really need.

• Clear Budget Management  

 

1. With fixed monthly fees for a period of time that has been clearly defined from the outset, asset finance and leasing will ensure that your company’s budget management is far more straightforward, freeing up precious time for other projects.

• Tax Benefits 

 

1. Using asset finance and leasing is an excellent way to reap tax benefits. As lease payments are defined as expenses by HMRC, it is possible to use untaxed money to pay for them, which will save you money in the long term.

• Lease Specific Bonuses

 

1. When you are negotiating a lease with a company, it is important to remember that it is possible for lease specific bonuses to be written into the contract. If you’re leasing equipment that requires regular servicing in order to operate at its best, make sure that equipment servicing is included in the lease. Variable monthly payments are also available with some packages and are a great option for businesses whose cash flow fluctuates.

Reasons to use Asset Finance and Leasing

Why are more established businesses choosing to use invoice financing?

Since the global financial crisis began to bite in 2007, there has been a marked rise in SMEs seeking alternative funding sources. As traditional banks have become increasingly reluctant to lend, the gap remaining is increasingly being filled by so-called challenger banks. Unaffected by the legacy debts and bad PR of traditional banks, they have been able to offer SMEs new ways to inject capital into their businesses. With even traditional banks now talking of launching invoice finance divisions, coupled with the fact that ‘invoice finance’ was the most popular business finance search term on Google in 2013*, it is clear that this is becoming an increasingly popular and reputable finance model.

The growth in popularity of invoice financing isn’t just confined to start-ups and small businesses facing challenging times. Increasingly, long-established businesses are also using this method. In fact, established companies have just as much, if not more, to gain from invoice financing. As invoice financiers link their lending to a company’s sales ledger, businesses with a steady flow of sales and invoices have much to gain, especially if they have clients who are slow to meet their payments. Instead of using invoice financing to save a business from troubled times, the facility can instead be used to bolster a period of growth – which in turn may attract more investment in the business. After an initial cash injection, a steady flow of increased capital can facilitate buying services in bulk, thereby cutting costs in the long term. Outsourcing your sales ledger to an asset management company can also free up crucial team members and cut manpower costs.

The various models of invoice financing that are available can be extremely beneficial for established businesses. Companies that have strong links with their clients can keep control of their sales ledger by choosing invoice discounting instead of factoring. Businesses that regularly take on new customers can make use of the mutually beneficial credit checks that many invoice financiers will carry out on new clients.

With big banks failing to meet the needs of their customers, it is little wonder that SMEs and many larger companies are increasingly turning to a quicker and more convenient way to access capital. For many established businesses, the quick initial cash injection, along with the confidentiality and security that invoice financing provide, make invoice finance, discounting & factoring the only viable option – if they want to grow and prosper in this tough economic climate.

Why are more established businesses choosing to use invoice financing?

Crowd Funding is an alternative to traditional banking and finance companies

Crowd Funding has been in the UK for a number of years.

“Credit Crunch” and “Banking Crisis”. It started as banks across the globe lent too much money, too quickly and in many cases the loans then defaulted or had insufficient security attached to them. So, rather like a pack of cards the whole banking infrastructure started to collapse like a domino effect. Banks had insufficient capital to meet liabilities and governments had to step in to support banks.

The UK PLC has turned the corner. Interest rates remain at historic low, (Great for Borrowers & Devastating for savers and companies with cash held on deposit) business confidence is increasing of companies looking to invest in new equipment and infrastructure.

Crowd Funding how does it work? Typically an on-line lending platform (an intermediary such as Funding Circle or Funding Knight and various others) will bring borrowers together with investors. This is done by the borrower (an SME/owner) approaching the investors for a loan via an internet platform. An application for a loan is submitted via the P2P platform, (in much the same way as you would approach your bank manager for a loan). The borrower will have to outline their business’s background; the company must explain what the business does? Why it is profitable? How much it needs to borrow? The crowd funder will prequalify the application at the outset for validation.

How long the company requires the loan? financial information has to be provided, to include the last year accounts. A simple application form at the outset.

The borrower’s loan request will then be looked at and assessed by the Crowd Funder “in house” funding team and if the Crowd Funder can see a viable business and a clear “ability to repay” the loan, it is then advertised on the P2P website for investors to “bid” on. Investors are typically private individuals looking to earn a better return than they are currently receiving for funds held in a bank deposit/savings account. Once the loan request goes “live”, investors can bid amounts of typically £10 and upwards. They can also indicate what percentage return they want for their investment (subject to minimum bid rates suggested on the web portal and set by a “risk weighting” assigned to the borrowers business by the intermediary). The better the businesses financials are, the lower the minimum bid rate and therefore the lower the overall interest rate/borrowing costs. They (investors) can also ask the prospective borrower questions about their business or its financials, the borrower then having a choice whether to reply or not (it is advisable to do so!).

Once the loan is 100% funded, the borrower can elect to close the bidding and start the process of drawing down their loan. Alternatively, they can keep the bidding open in the hope that new investors lower their bid rates, remove the higher rate bidders and thus reduce the overall loan cost/interest rate.

The Crowd Funder platform provider will then take their “fee” from the loan amount with the borrower then signing the loan documents before the balance of the loan is deposited into their business account. The Crowd Funder offers Secured and Unsecured Funding.

Worthy of note is that each individual investors name is listed on the loan document that the borrower signs, in my experience, this can be in excess of 200+ investors for any one loan!

Crowd Funding – Fast Business Loans can be used for any purpose.

Great Alternative to Traditional Banking and Finance Companies.

Onwards and Upwards!

Crowd Funding is an alternative to traditional banking and finance companies

Crowd Funding has been in the UK for a number of years.

“Credit Crunch” and “Banking Crisis”. It started as banks across the globe lent too much money, too quickly and in many cases the loans then defaulted or had insufficient security attached to them. So, rather like a pack of cards the whole banking infrastructure started to collapse like a domino effect. Banks had insufficient capital to meet liabilities and governments had to step in to support banks.

The UK PLC has turned the corner. Interest rates remain at historic low, (Great for Borrowers & Devastating for savers and companies with cash held on deposit) business confidence is increasing of companies looking to invest in new equipment and infrastructure.

Crowd Funding how does it work? Typically an on-line lending platform (an intermediary such as Funding Circle or Funding Knight and various others) will bring borrowers together with investors. This is done by the borrower (an SME/owner) approaching the investors for a loan via an internet platform. An application for a loan is submitted via the P2P platform, (in much the same way as you would approach your bank manager for a loan). The borrower will have to outline their business’s background; the company must explain what the business does? Why it is profitable? How much it needs to borrow? The crowd funder will prequalify the application at the outset for validation.

How long the company requires the loan? financial information has to be provided, to include the last year accounts. A simple application form at the outset.

The borrower’s loan request will then be looked at and assessed by the Crowd Funder “in house” funding team and if the Crowd Funder can see a viable business and a clear “ability to repay” the loan, it is then advertised on the P2P website for investors to “bid” on. Investors are typically private individuals looking to earn a better return than they are currently receiving for funds held in a bank deposit/savings account. Once the loan request goes “live”, investors can bid amounts of typically £10 and upwards. They can also indicate what percentage return they want for their investment (subject to minimum bid rates suggested on the web portal and set by a “risk weighting” assigned to the borrowers business by the intermediary). The better the businesses financials are, the lower the minimum bid rate and therefore the lower the overall interest rate/borrowing costs. They (investors) can also ask the prospective borrower questions about their business or its financials, the borrower then having a choice whether to reply or not (it is advisable to do so!).

Once the loan is 100% funded, the borrower can elect to close the bidding and start the process of drawing down their loan. Alternatively, they can keep the bidding open in the hope that new investors lower their bid rates, remove the higher rate bidders and thus reduce the overall loan cost/interest rate.

The Crowd Funder platform provider will then take their “fee” from the loan amount with the borrower then signing the loan documents before the balance of the loan is deposited into their business account. The Crowd Funder offers Secured and Unsecured Funding.

Worthy of note is that each individual investors name is listed on the loan document that the borrower signs, in my experience, this can be in excess of 200+ investors for any one loan!

Crowd Funding – Fast Business Loans can be used for any purpose.

Great Alternative to Traditional Banking and Finance Companies.

Onwards and Upwards!

Crowd Funding is an alternative to traditional banking and finance companies

Introduction– Trade Finance for your Customer Orders

Global Asset Finance Limited provides trade finance to clients involved in exporting or importing finished goods through:

Providing appropriate finance to fund the transaction;

• Minimizing risks, particularly credit and political risks; and


• Managing the supply chain cash flow.

GLOBAL ASSET FINANCE LIMITED comprises knowledgeable and technically proficient professionals and corporate risk managers who understand the commercial pressures and demands of cross-border risk management, finance and logistics.

GLOBAL ASSET FINANCE LIMITED originates structures and finances business where there is an underlying trade. We use a range of financial and risk mitigation solutions to help meet your exact requirements including:

• Order Finance


• Procurement Finance


• Receivables discounting , as part of an overallsolution


• Letters of Credit confirmations


• Forfeiting


• Pre-Exportfinance


• CommodityFinance


• Import finance facilities


• Guarantees and Stand by Letters of Credit


• Capital Goods Finance and Leasing


• Credit Insurance

We have fundeda diverserange offinished goods, including:

BBQ’s; Children’s clothing; Commercial Batteries; Replacement Windscreens; Hi Tech cameras; Machine parts to Africa; Gift ware to major retailers; Used Vegetable Oil; Pizza boxes; Garden games and capital goods. Just to name a few.

CORE CRITERIA FOR TRADE FINANCE 

GLOBAL ASSET FINANCE LIMITED and its partners are aprovider of traditional transactional trade finance. GLOBAL ASSET FINANCE LIMITED will purchase finished goods onbehalf of their clients, against confirmed purchase orders from credit worthy end customers.

Client:-

•        Ideally established business with 2 years track record;


•        domiciled in most countries;


• -     Must be a Limited Company.

      Product:-

•        Ideally finished goods,


•        We don’t take manufacturing risk;


•       Trading Margin (Gross Margin) of at least 15%;


•       At least 8 months shelf life (not perishable goods);


•      No onerous on-going support obligation by the client.

 Transactions:-

•          Maximum ten or of 90 days pre-shipment finance, 120 days post shipment finance;


•          Minimum purchase quantity of £80,000 from anyone supplier over a 2 week period;


•         Confirmed orders from end buyers (no sale or return or call off orders);


•         End buyers must be credit insurable by our partners insurer, or offering Letter of Credit or Bank Guarantee from Investment Grade bank. Can be domiciled in most countries;


• One off transactions only considered if quantumis in excessof £250k GBP or equivalent;


• Maximum transaction size of £1m to any one end buyer, or £3m to multiple end buyers.


• Larger trades considered on an Credit & Risk Basis up to £100m;


• All trades conducted on a disclosed basis to buyer and suppliers.

 Costs and security:-

•  Cost varies on size and tenor of trade. Typical range is 2% to 3.5% per 30 days for cash use and 1% per month pre-shipment Letters of Credit and not in product;


• Security may include Debenture, Personal Guarantees or Warranties/Indemnities, or specific debt waivers from existing lenders relating to


• transactions being financed. Cross guarantees maybe required for group structures or SPVs.

 

 

Introduction– Trade Finance for your Customer Orders