Fiducia’s Guide to Commercial Finance

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Fiducia Commercial Solutions can source a wide range of commercial finance options for your company in products under headings like Commercial Property, Investment Property, Development Finance and Business Finance – but what does that mean in practice?

Gone are the days of approaching your bank (as your only option) and choosing from the menu items of: Overdraft – Loan – Mortgage.

To source the best outcome for your requirements, and a suitable solution for you, we use a whole of market panel of lenders:

§  High Street Banks

§  Challenger Banks

§  Product Specialist Lenders

§  Peer To Peer

§  Fintech

Some of our lenders you may not have heard of, some only deal with commercial brokers and some of their products and rates are exclusive to the commercial broker channel.

So back to my first question: What does this mean in practice for your business? When you approach us for a business loan to manage cash flow, we will talk through your requirements and the issues you are looking to resolve; and if we identify that your cash flow issues stem from, for example, payment up front to your suppliers, then we may put an option alongside the loan in supply chain finance for you to consider.

We don’t just have a list of products that are available – we work with you to suggest suitable options for your business.

This is a guide to the commercial finance solutions that Fiducia can access for clients – we can of course go into more detail when talking through their suitability for your business, and your eligibility for the lenders’ criteria.

Many can be used to manage and conserve cash flow, and to help you trade out of the current environment or manage demand in ways that you may not have previously thought about.

Commercial Mortgages

Commercial Mortgages are used to fund the purchase, or refinance of, commercial and semi-commercial properties. In general terms, there are 2 types of Commercial Mortgages:

§  Owner Occupied – The purchase or refinance of the property where the company is currently operating, or the purchase of a new property to move to and operate from.

§  Commercial Investment – The purchase or refinance of commercial or semi-commercial property which will be rented to another company to operate from – essentially a commercial Buy To Let.


An investor may purchase, via a limited company (“Special Purpose Vehicle” or SPV), an investment property as part of a long-term investment strategy. These range from a single property to building a portfolio of properties.

Bridging Finance

Short-term property finance with faster completion compared to traditional mortgage finance; the ‘Exit’ from the loan is commonly the sale of the asset, or long-term re-financing.

Multiple uses: auction purchases / requirement to purchase quickly / refurbishment and development periods / releasing equity to raise working capital.

Development Finance

Finance terms available vary according to the initial value of the property / land, the costs and fees of the development work, the projected value of the completed development and your previous experience of development. Variants include:

§  Light Refurbishment – Cosmetic refurbishment with no structural changes.

§  Heavy Refurbishment – Contains cosmetic work, but usually renovation work including structural changes or changes to the footprint of the property.

§  Ground Up Development – Commonly starts from vacant land, can include demolition and rebuild projects.

Recovery Loan Scheme

Open For Applications April 6th – December 31st 2021.

The scheme replaces the government’s original business support loan schemes – Bounce Back Loans, CBILS and CLBILS – which all closed their doors to new applications on March 31st.

  •   Term Loan funding starts at £25,001, up to 6 year terms
  •    Invoice and Asset Finance starts at £1,000

The scheme is limited to £10m per company, or £30m per group.

Business Loans

·        Secured LoansThe lender takes a guarantee to back the loan, which is normally a tangible asset that a company owns like property, machinery or vehicles.

·        Unsecured LoansWith no tangible security backing the loan, these are riskier for lenders – and this is normally reflected in a shorter term and higher interest rate.

·        Revolving CreditSimilar to an overdraft, you agree a facility limit and term and can ‘dip in and out’ depending on your needs. You only pay interest on the funds that you draw down.

·        Merchant Cash Advance (MCA)Using the regular income from Debit / Credit Card transactions to help fund business borrowing, helping to smooth income in seasonal markets. No fixed loan repayments, your repayments are tied to the volume of business you take through card transactions.

·        Short Term VAT LoansLenders offer 12 week loans to help to settle some or all of your VAT bill – you can repay weekly or monthly.

Invoice Finance

·        Invoice DiscountingThe simplest form of invoice finance. You keep charge of credit control, and get paid up to 90% of your invoice’s value on the day that you issue it to your customer, with the balance when they settle.

·        Invoice Factoring – As per Invoice Discounting, plus the lender manages your credit control – this can free up your time to get on with running the business.

·        Selective  You select either the clients or the individual invoices to put into invoice finance, so you only use the facility when your cash flow requires it.

·        Specialist Sector?  – Construction Finance, Recruitment Finance and Professional Services Finance are just a few examples of specialist products that could be tailor made for your sector.

Trade / Supply Chain Finance

Trade / Supply Chain Finance is a revolving facility that can be with UK based suppliers and manufacturers as well as overseas, is flexible to accommodate deposits if required on order and other costs including import VAT and freight if these are applicable to you. And if it is from overseas, then lenders are also commonly experts in FX as well.

Asset Finance / Vehicle Leasing

Asset Finance gives your business access to the machinery, plant, equipment or vehicles that it needs to operate, without the full initial outlay of their cost. It can also release value from assets that you already own towards working capital and cash flow requirements:

·        Leasing FinanceYour business doesn’t own the asset but agrees a lease usually for a fixed term and payments. You are in effect renting the asset.

·        Hire Purchase (HP)This allows your company to purchase an asset over an agreed term with agreed regular payments – the asset is yours when all of the agreed payments have been made.

·        Refinance In simple terms, your company may own assets that are either unencumbered or partially financed. Lenders will commonly lend up to 70% of their current value less any outstanding finance.

From April 1 2021 for 2 years companies can offset 130% of qualifying spending on plant and machinery against their taxable profit in that first year under the Super Deduction tax relief scheme. Take your accountant’s advice for your business, but it could be worthwhile re-considering plans that had been shelved during the pandemic, or bringing forward plans?

We are sourcing suitable solutions to help clients achieve the best outcome for their requirements – why not see what options are available to you?

Mark Grant, May 2021. 01636 614 014