Also known as a business flexible loan or commercial loan this type of finance is a broad term for a loan for a set amount over a set period. Repayment amounts will depend on the size and duration of the loan, the security you can offer and the interest rate applied by the lender.

The terms and conditions of a business term loan are as varied as the number of institutions offering them. Every bank, building society and specialist lender will offer some form of this product. As such the terms and conditions can vary significantly and it is always wise to seek expert financial advice. Making sure you get the right loan for your requirements can save a great deal of money and stress down the line. Pay particular attention to interest rates and fees as getting this wrong at the outset could cost you a lot of money.

Ideal for:
Businesses that have a specific funding requirement, normally an asset of some kind, that are confident they will use all the money they ask for.

Security requirements:
For larger or well established businesses you will need to make a deposit - normally 30% of the total cost. Usually lenders will also require security against the loan to ensure repayment. Acceptable security may be business assets such as equipment or property - either business premises or personal. Personal guarantees from company directors or external guarantors may still be required depending on how much asset based security you can offer.

If you require a loan for a business start-up you will need to show that you have made a significant financial investment into the business of at least the amount you are seeking. Start-up and young businesses often find it hard to meet the security requirements of most lenders and the government backed Small Firms Loan Guarantee Scheme was implemented to help solve this problem. When there are insufficient business assets to offer as security then you may be asked to provide personal guarantees from company directors or external guarantors. Only when these routes have been thoroughly explored and exhausted will you be eligible to apply for the Small Firms Loan Guarantee Scheme (SFLGS)