What does it take to be successful in business?

  • Tenacity
  • Hard-work
  • Commitment

These are just a few skills amongst successful business owners.

They also need finance. Money helps businesses grow, expand, or even launch.

Commercial finance is designed specifically with business in mind, it comes in all shapes and sizes and can be adapted to suit a variety of needs.

A business typically seeks finance if they have reached a point where they want to grow, expand or start a business.

Within recent years the landscape has changed, where businesses used to only go to banks for finance, there are now more alternative lenders than ever before offering opportunity to those who don’t want to or can’t use their bank.

This means that for any business size, there is options available for all.

Types of Commercial Finance

  • Start-up loan

Typically a personal loan backed by the government to help fund a new venture. Start-up loans offer up to £25,000.

  • Trade credit

A B2B agreement where a customer can agree to purchase goods on account without paying cash upfront but rather paying later.

  • Business credit cards

Useful as a source of short-term finance to pay for business expenses and won’t incur any interest provided the balance is paid off by the end of the credit-free period.

*36% more SMEs were using credit cards in 2017 than other sources of finance and 76% of SMEs sourced Credit Cards from banks.

  • Crowdfunding

This involves taking a small amount of investment from multiple people to total a much larger sum.

  • Overdraft

Overdrafts are an agreement with the bank your current account is held with. Your balance will be able to drop below zero to an agreed amount, but you will then owe the bank money.

  • Business loan

Loans typically offer medium to long-term sources of finance and come in one of two forms; secured loans (where the borrower offers collateral if the repayment fails) or unsecured (where the loan is given on the borrowers current situation.)

  • Peer-to-peer lending

This is a way for investors to lend to businesses and earn interest back on their money.

  • Leasing

Lenders agree to purchase an asset the business needs and leases it back to the business over a fixed period. The intention is that the finance company will sell the asset at the end of the lease period.

*88% of SMEs sourced leasing or hire purchase agreements from sources other than banks.

  • Hire purchase

Lenders agree to purchase an asset on behalf of a business that needs it. The company then spreads out the cost of the asset over a period until it is paid for and ownership is transferred to the business at the end. This is a fixed rate with low-interest rates and are generally agreed over medium to long-term periods of time.

*Leasing and Hire Purchase increased its use by 15% in 2017.

  • Export or trade finance

Trade finance allows you to pay for goods ordered from overseas using a flexible facility. Export finance helps businesses that sell overseas by releasing the value of outstanding invoices whilst the lender collects customer payments.

  • Invoice factoring / discounting

This allows companies to borrow money against the value of invoices due from customers. 

  • Commercial mortgages

Useful for investing in property to grow your business. These are a long-term form of finance and commercial mortgages are a form of secured loan meaning the properties serves as collateral for the lender if you default on payments.

*65% of SMEs sourced a commercial mortgage from a bank, whereas 35% used other sources.

How to know if you need commercial finance

Before committing to any commercial finance agreement, it’s important to understand which stage your business is at and what challenges or opportunities are ahead.

You don’t want to accrue debt if your business doesn’t need it.

How do you know if it is right for your business then?

The following two questions are to help you understand where you are in your business journey and what lies ahead for you, both will help align you with the right commercial finance product. 

Where are you on your business journey?

  1. Pre-trading
  2. Pre-profit
  3. Profitable and growing
  4. Established and growing
  5. Established and stable
  6. Established and stressed

The next step is to understand what challenges or opportunities lie ahead.

  • Do you need initial funding?
  • Are you launching a new product or service?
  • Are you looking to expand into new markets?
  • Do you want to invest in new facilities?
  • Are you wanting to refinance existing debt?
  • Do you need finance to restructure?
  • Have you got acquisition plans?

The right commercial finance product for you will depend on your answers to these questions, it isn’t a one-size-fits-all.

The most common reasons to seek working capital is for general running of the business and to cover short term gaps until customers pay, also for flexibility and convenience.

In 2018 9% of SMEs sought external finance for expansion, compared to 5% in 2017.*

How you can access Commercial Finance

Awareness of who to approach for specific finance products has increased over the last few years, but there’s still a lack of understanding for more alternative finance options.

Sole traders and those trading over 10 years were more likely to go directly to their bank in 2017.*

Where can you go to find out what finance options are available?

  • Directly to your bank
  • Supplier/dealer/manufacturer
  • Seek advice from friends/other businesses
  • Commercial lender
  • Commercial broker
  • Accountant
  • Financial advisor

Companies like Amplo Agricultural Finance work alongside a large panel of lenders, when an enquiry is made into us, we then contact multiple lenders to source you (the borrower) the best deal.

commercial finance application process

The main purpose that we serve is to save you time and as a result money.

Pros and cons of business finance

Some businesses hate debt and the thought of acquiring more is enough to give them nightmares.

If you can get past the stigma surrounding borrowing for your business, you can open multiple doorways for opportunity.


  • Invest in new equipment / machinery
  • Provide the business with a cash flow boost
  • Access to large sums of money
  • Low interest rates
  • Flexible re-payment terms to help as you grow your business


  • Extensive paperwork and application process (that’s where brokers take the pain away and do all the hard work for you!)
  • Not all businesses will qualify for commercial finance
  • Depending on the product, they can be secured against assets which if you fail to repay means the lender can seize the asset

You need to ensure that the finance you’re seeking suits your business and its needs. Understanding what finance is available before you need it can put you in a much better position for when you do.


For more SME advice and tips, read through our blog posts. At Amplo, we have a team of friendly brokers ready to help you find the right commercial finance for your business. With industry experience and knowledge at our fingertips, we can help you seek the funding you need. Call us on 01270 443510 or email enquiries@amploagriculturalfinance.co.uk.

*Source: https://www.british-business-bank.co.uk › 2019/02 Slide 1 – British Business Bank