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Benefits of using a commercial finance broker

Tuesday, April 13th, 2010

With Easter over for another year, now is an appropriate time to discuss not having all your eggs in one basket for next year?

Almost every day we see lenders creating serious issues with companies who have their main trading account, invoice discounting , asset finance lines and property loan with one funder. Whilst there can be rare occasions when this is of benefit to you it is better for you to split your banking. 

One of the main reasons for having just one funder is that the owners/directors of business don’t want to have more than one relationship as they don’t have the time to manage multiple lender relationships. This is a valid point but the pitfalls can outweigh the advantages. Two examples seen recently: 

1 Wife of director had finance refused on a new car she was purchasing. Husbands business showed a loss through management information which was a condition of the bank’s overdraft facility. 

The Bank had advised all of its subsidiary companies of the loss, even though the next month it was back in profit. 

2 Client wanted to move his invoice finance line to another provider to provide more funds. Bank refused to allow this as they also had a property loan to the business and wanted to retain the invoice facility as additional security 

It’s becoming more common for companies to interact with their funders through a third party or commercial finance broker. Whilst your accountant could do the role owners/directors are turning to experienced finance professionals who understand how banks work. 

By anticipating any issues and working with all parties this improves the relationship with the funders and saves the owner/director considerable time which is better spent on running their business. This could be for a specific project or on a retainer basis.

Commercial Mortgage Finance

Saturday, January 2nd, 2010

Gone are the days when it was easy to get a mortgage just based on the value of the property. Until the credit crunch there were a number of commercial mortage companies offering funding of up to 80% of the valuation of the property. It was dead easy. It was just like getting a self certificated personal mortgage ( and by the way they have all gone from the market as well).

In addition banks were fairly relaxed when it came to advancing money against a commercial property. Has anyone tried to get a commercial mortgage at the moment. It is virtually impossible. At XL Business Finance we have over 10 years experience in helping businesses with obtaining commercial mortgages.

The problem with getting finance at the moment is that the finance companies are not interest in the value of the property. Because truth be known no one really knows how much property is worth in the current economic climate. The financial institutions are all into debt serviceability and the quality of the tenant.

Different finance companies will have different criteria when it comes to debt serviceability and knowing which one is best for your particular requirement is best left to a proper commercial finance broker.  If anyone knows one be sure to let me know ( ha ha!).

Seriously though we have access to some of the best commercial mortgage brokers in the market. The best ones are the ones that generally have worked in the banks for 20 years, have decided that there are other options than working in a Bank for the rest of their lives, have a personality and can generally speak your language. The fact they have worked in a bank is a good thing because they know how to wade through all the dotting of the i’s and crossing of the t’s.

And we know who they are!!!!!!

 
 
 

XL Business Finance Ltd is a privately owned and independent business financing company with established links to many of the UK's leading finance houses. XL Business Finance provides a viable alternative to high street banks that lack the flexibility and imagination to provide a solution to most business users requirements. XL Business Finance can provide a full range of business financing solutions and we ensure a high level of customer service and pride ourselves on quick decisions. Our independent status will ensure any offer of funding and asset finance leasing is best suited to our customer’s needs.

XL Business Finance, Eaton Place Business Centre, 114 Washway Road, Sale, Cheshire M33 7RF UK.

 

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