What are the types of lending?

The types of lending available to a business will depend on a number of factors, including the amount which is being borrowed, the length of the loan term and the financial position of the borrower.

As a borrower you will need to work out whether you would like to borrow on a short or long term basis as the interest rates tend to be higher on short term loans.  If the reason for you borrowing is to deal with a short term issue which needs to be resolved quickly, e.g. paying a contractor to repair a broken radiator, you will be looking for a short term loan which will provide you with a quick injection of cash allowing you pay for the repair.  If, however, you are looking to invest and expand your business, e.g. to build an extension to your office or by a new machine, you are likely to need a long term loan.

Long term loans are defined as loans which run for more than a year.  Some loans can run for as long as 25 years.  As a borrower you may wish to extend the term of your loan.  If the lender agrees to an amendment of the existing loan agreement you will be able to extend your borrowings by entering into an amended and restated loan agreement.  At Francis Wilks & Jones we can advise you on the terms to include in the amended loan agreement and assist you with the negotiation process.

Short term financing describes loans which must be repaid with a six to 18 months.  Generally these loans have higher interest rates than longer term loans and are intended to deal with short term working capital issues. To name a few, these can include: cash flow loans, bridging loans, invoice discounting, factoring and lines of credit.  Here at Francis Wilks & Jones we can review your short term loan agreements and make you aware of any unfair or onerous terms which might have been drafted by the lender.

Contact an expert banking and finance solicitor now

Our expert team of banking and finance solicitors at Francis Wilks & Jones are here to help you with your lending query.  Contact one of our team of expert lawyers now for your consultation.  Whatever your banking requirements, we are the experts to help you.  Call us now.  Let us help.