Many commercial businesses are unaware they are able to apply for an unsecured business loan, but with the help of the right broker, this is a viable finance option. I was recently able to arrange this facility for a client. My client was a company director in the hospitality industry who also owned several care homes; as such, he was well-versed in the world of commercial property and finance.
However, he was struggling to secure finance for a project he had in mind. My client was an experienced hotelier and had purchased a new hotel with a 3 star rating. He wanted to upgrade this to a 4 star rating by extending the property and upgrading the rooms, the restaurant, and the communal areas.
The lender who had supplied the commercial mortgage for the property was not prepared to allow a second charge on the hotel, so my client needed an alternative source of finance. Although he was experienced in the hospitality industry, he had only been running the new hotel for six months and so was unable to take out a loan against this business.
I therefore suggested that he take out an unsecured business loan on the strength of another of his businesses for expansion purposes. My client was able to show company accounts indicating his past success, a clear indication to lenders that he would be able to service the loan. An unsecured business loan is in fact a viable option for many commercial businesses, even those without such a good track record—however there is a perception that unsecured loans are very difficult to achieve. This can be true without the right contacts, but this was not a problem for me.
I approached a peer to peer lender with whom I have a very close relationship and arranged an unsecured loan in a short time frame. The final loan was for £257,500 at an interest rate of 9.5% over the total period of 2 years. My client was delighted with this outcome.
In order to achieve an unsecured loan, it is essential that your case is presented in the right way. A close relationship with the relevant lender is also important. This is where brokers such as myself are able to add significant value; we have the contacts and the experience to present your application in such a way as to ensure it will be successful. If you would like to discuss arranging an unsecured business loan, please don’t hesitate to contact me and I will be happy to assist you.