Choosing the Right Commercial Financing For Your Business

The business finance world is an area many businesses have to navigate in order to get the appropriate finance to grow their business or improve cash flow. It can be complicated understanding what type of finance is right for your business so here are some of the most common business finance methods explained.


Factoring is a form of finance that takes into account value your business has in it’s invoices that are yet to be paid by your customers. Factoring allows your business to be loaned up to 90% of the value of your invoices as soon as they are issued so you don’t have to worry about waiting to be paid.

Factoring allows a business to give control of it’s sales ledger over to the Factoring company which will do your debt collection and help protect you from bad debt.

Invoice Discounting

Invoice Discounting is similar to Factoring, the way it differs is that businesses can retain control of their sales ledgers so they can continue to do their own credit controlling and debt management.

Asset Based Lending

This type of business finance lends to business against the assets on the companies balance sheet. The finance company will use these assets as security for the loan. The repayment of the loan is dependent upon what the business and the business financing company agree.

Asset Finance

This can help a business purchase an asset without spending a large lump sum. The finance company will pay for the asset and the two companies will agree repayment terms.

Unsecured Business Loans

This type of loan is usually more difficult for a business to obtain. Because the loan is not secured against any asset that the business owns the interest rates are usually higher than a secured loan. Unsecured loans are usually more difficult to take out as a lender will be more strict about who they lend to.

Business financing is something that can be complicated but gaining an understanding of it can help your business find the financing that is right for you.

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