Alternative Finance
What are the benefits of a drawdown facility?
Simply speaking, a drawdown facility is a type of business
Business financing simplified
Secured Business Loans
in a nutshell
Secured business loans are a way for companies to secure funding by using assets as security. Since lenders typically use high-value assets such as property to secure loans, it means they can lend more in comparison to unsecured business loans. Because the lenders are using assets to secure the loan, often they won’t need to scrutinize personal credit as vigorously as an unsecured loan nor will the business need to be profitable. Further, the pricing is likely to be lower if the business is able to put up tangible security.
With a secured loan, lenders are collateralised on the asset thus increasing your chances of getting a loan and also allowing you a longer term on the facility; after all the loan value will be primarily derived from the available equity the asset holds.
The key term with secured loans is “loan to value” (LTV) which pertains to (typically a percentage figure) the value of the loan against the available collateral. The LTV a lender is willing to offer is usually determined by what rank the lender will hold on the property – LTVs typically increase if the lender has sight on the first charge of the property as opposed to a second (or third) charge where they will rank junior to the first charge holder.
Some of our lenders
Cost
Secured loans give the lender more protection and as such they can charge lower interest rates than with other products.
Light criteria
As the lending is collateralised, personal and business credit is scrutinised less than unsecured loans.
More money
The loan value is not determined by the performance of the business, but the value of the asset, so the lender is likely to offer more than otherwise.
Increased terms
As the collateral is there, lenders will issue longer terms on their loans - meaning there is likely to be lower monthly repayments and thus a cash flow benefit.
