 |
|
A Flexible Business Loan is a tailored financial package that allows you to invest larger amounts in your business whilst controlling the effect on your cash flow. Whether your business is looking to expand, make new purchases or just starting out, a Flexible Business Loan puts you in the position of being a cash buyer with extra negotiating power.
Flexible Business Loans can be tailored to your business cycle to make your financial management much easier. Interest can be paid monthly or quarterly as you prefer, while repayments can be made monthly, quarterly, bi-annually or annually by bank standing order.
To ease cash flow problems at certain times of the year, on variable rate loans of between £25,001 and £250,000 you may be able to defer up to two monthly repayments each year provided that the repayments are monthly and the loan period is for ten years or less. If you are interested in taking up this option it must be agreed at the time the loan is set up. To make things even easier, on amounts of £25,001 or more you may be able to take advantage of a Capital Repayment Holiday of up to two years at the start of the loan.
The minimum borrowing amount for variable rate loans of between 1 and 15 years is £10,000 for incorporated businesses and £25,001 for unincorporated businesses. For fixed rate loans between 1 and 10 years, this increases to £25,001. There is no maximum borrowing limit, but if you need a larger borrowing facility that does not fit within our normal guidelines, we can sometimes arrange a 'made-to-measure' loan. Our ability to do this will depend on the nature of the requirement and the strength of your business.
|
|
| Flexible Business Loan @ a Glance |
|
Key Benefits
|
Fixed or variable interest rate options available.
Flexible repayment patterns available.
Capital repayment holiday available.
|
|
Eligibility
|
Any business that meets our policy requirements.
|
|
Security
|
Secured or unsecured. Life insurance cover for the principals/directors is normally required.
|
|
Min/Max Amount
|
Minimum £10,000 for incorporated businesses and £25,001 for unincorporated businesses. No maximum.
|
|
Min/Max Period
|
12 months to 15 years (10 years for fixed rate).
|
|
Charges and Fees
|
Variable rate interest is calculated as a percentage over Bank Base Rate and agreed at the outset.
The interest charged varies in line with changes in the base rate. Repayments are reviewed annually.
A fixed interest rate option is available.
An arrangement fee of 1.75% of the loan amount (min £175) will normally apply.
For loans in excess of £30,000 the arrangement fee is 1.25% of the loan amount.
If the loan is repaid early, an early repayment fee is payable.
There may also be security charges, if appropriate.
Please refer to our current Price list for details of current rates.
|
|
For loans in excess of £250,000 a 'break clause' can be included every five years. This can be used by either the Bank or your company and allows for either party to re-negotiate the terms of the lending.
If security is required on the loan, it can include guarantees, charges over assets or charges over freehold or leasehold property owned by the business owner. Where security is not taken, warranties are normally included in facility letters/agreement forms to protect the bank's position in relation to other creditors. These are called 'Pari Passu' and 'Negative Pledge' Warranties. We may also require that the principals/directors of the business have appropriate life insurance cover. If the security arrangements include a property which is currently, or is intended to be used as a domestic dwelling, either wholly or in part, please remember that your home may be repossessed if you do not keep up repayments on your mortgage.
Is it for me?
This type of loan is suitable for any business that meets our policy requirements.
A Flexible Business Loan can be used to purchase any assets (see our Commercial Mortgage if you are planning to purchase business premises), although loans for longer than 5 years are normally granted for the purpose of buying a capital asset, for example a piece of equipment.
What does it cost?
Fixed or variable rate interest rates are available. The interest rate will be agreed with you at the outset. An arrangement fee of 1.75% of the loan amount (min £175) will normally apply. For loans in excess of £30,000 the arrangement fee is 1.25% of the loan amount. Other fees may be applicable dependent upon individual requirements, eg, security fees, pre-payment fees and non-utilisation fees. The interest rate charged varies in line with changes to the base rate. Repayments are reviewed annually.
A LIBOR - linked option is available for loans over £100,000. Similarly, a pension-linked option is also available. If the loan is repaid early, an early repayment fee is payable.
Protect your interests
For loans of up to £50,000, our Commercial Payment Protection Insurance is designed to give you complete peace of mind. Up to four people in your business can be insured against accident and sickness, in the event of which your monthly repayments are protected for up to 12 months, with life cover included. The premium can be added to the loan to ensure that you only have one easy repayment to make - please talk to your local branch to find out more.
Loans in excess of £50,000 can also be protected, indeed we strongly recommend that you do so. In order to arrange this type of insurance, you will need to contact one of our Financial Planning Managers. Please talk to your local branch to arrange an appointment or call us on 08457 456125.
Next Steps
|
