When deciding on the correct way on financing your property, there are various consideration to take. From payday loans in the UK, to taking a loan from a bank, there are many consideration that you must take. We have made things easy for you, by walking you through the 3 types of property finance that you should consider, so you can make an informed decision when you decide to take the first steps towards financing your property.
Commercial Property Loan
A commercial property loan enables you to borrow the amount of money you need to either grow, or to start your business. This is a business loan, which is secured against a residential or commercial property. In some cases, this can even be secured against your property portfolio. With this form of loan, you can usually borrow up to £20m, with most terms lasting for a maximum of 7 years. The beauty of this type of loan, is that it can help alleviate a vast array of issues you may be experiencing.
If you require working capital, you may be able to purchase new equipment, stock, or machinery to help keep you afloat in the short term.
A bridging loan differs from a commercial property loan in a multitude of ways. This is a short-term financial loan that is designed specifically to address certain issues immediately. The lifespan of this loan is usually around 12 months, although some borrowers can extend this to up to 2 years, depending on their individual circumstances. At the end of this term, a borrower will pay back the agreed repayment amount, inclusive of interest of the specified time in which it was paid over.
Examples of how a bridging loan is frequently used can include:
- Paying tax bills
- Completing ongoing developments
- Accessing emergency cash
- Enabling the quick completion of a property purchase
- Restoration of bad credit
All in all, a bridging loan can be used for almost anything, as long as it helps to contribute to your business.
A term loan is somewhat self-explanatory. This is a fixed loan solution, lasting up to 7 years. On receiving the full amount, repayments will be made over monthly instalments. Term loans are highly popular and often sought after as borrowers can gradually reduce the amount owed.
Although we have specified the main 3 types of property finance, you may also be interested in an interest only loan. This involves a business borrowing between £25k and £20m. With this type of secured loan, you will be expected to pay a monthly interest amount. Furthermore, this will be followed by a final, much greater payment to deal with the loan amount.
Using any property loan to grow your business is an extremely beneficial move that any business owner can make. If you can access the funding that you require, you will be able to reach your true potential and flourish as a successful business in no time at all.