Business Loans

A business loan is a commercial term loan made to a business either on an unsecured basis, or secured against property assets, or secured with a floating charge debenture over the companies full assets.  A business loan should complement the role of the business overdraft with the latter generally being used for day to day working capital but with the former taken on for a specific purpose. 

Many business loans are unsecured so do not require the business to hold property assets, or equipment. This then allows the business to utilise these assets for other forms of borrowing such as asset finance. 

Business loans are a legitimate business expense and as such can be used by the client’s accountant to offset their tax bill so any lending to the business is tax efficient. Unlike an overdraft, payments to a business loan facility are generally amortising so over the period of the loan the debt is being paid off until at final payment the debt is redeemed in full. 

Finally, business loans can be put into place very quickly when unsecured as the requirement for a solicitor to register the charge against an asset is not required and this removes a lot of stages from the process.