What is Commercial Finance? - Business Finance

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Commercial Finance

All businesses need a helping hand in the finance department at one stage or another.

Whether you're just starting out with a new company or looking for an extra boost to get your business through a difficult period or to provide funding for new equipment, choosing the best commercial finance is a difficult decision that requires a great deal of thought.

Key Tips for Securing Commercial Finance

Before you approach a lender seeking commercial finance, it's important to make sure you've taken important steps to gain approval.

  • Gather together your last three years' personal financial statements, tax returns and monthly cash flow forecasts.
  • Ensure you have a detailed and well considered business plan.
  • Take all managerial staff details, company financial statements with profit and loss statistics.
  • Make sure you include a plan of how the loan will be implemented in your business.

Commercial Finance Options

There are a number of solutions available to those seeking commercial finance.

Business Finance. Business finance is a term that covers all things under that commercial finance umbrella, from arranging commercial loans, to overdrafts and refinancing.

Short Term Loans. Short term loans provide a cash injection for your company when you need it. They are generally taken out for a year or less on a secured basis and repaid in a lump sum at maturity.

Asset Finance. Asset finance can operate in two directions. You may wish to gain a commercial loan to purchase assets for your company, or in order to improve your business cash flow, you may need to lease out or sell assets that you own.

Property Finance. You may need finance in order to purchase a property that you can work from. Finding the best commercial mortgage rate will be important when making this decision, and due to the vast choice of commercial mortgage options, it's advisable to get expert advice.

Factoring. Factoring allows businesses to gain a financial boost while they're waiting for invoice payments to come in. Factoring allows your company to take a short term loan commercial loan against the value of your invoices. In doing so, you'll unlock finances that are tied up in invoices as soon as they're sent out. Basically, your customers become the factoring firm's customers and are best suited for companies who cannot obtain other forms of short term financing.

Invoice Discounting. Invoice discounting is the process of factoring, but done so in a confidential manner, keeping your customers unaware that the service is being undertaken.


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This website has been written and intended for registered limited companies in the UK only. The site contains general information and resources for limited companies only in financial trouble. Insolvency Helpline only work with limited companies to offer solutions for their business debt problems. Insolvency Helpline cannot offer help or advice any other entity except limited companies. Insolvency Helpline does not advise individuals, sole traders or partnerships seeking debt advice. If you are an individual, sole trader or partnership seeking advice, we recommend using an alternative service.

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