Calculators and guides
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Term loans
Monthly repayments, total interest and a year-by-year schedule.
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Asset finance
Hire purchase or lease cost, with deposit and balloon.
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Invoice finance
The cash an invoice facility could release, and its fees.
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Revolving credit and overdrafts
What a limit costs when only part of it is drawn, fees included.
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Commercial mortgages
Monthly payments and loan to value, from the property price and your deposit.
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Bridging loans
What you receive, what you repay at exit and the total cost.
More debt guides
How a lender reads your application
A lender’s main question is whether the business could still repay if trading got harder. The credit paper your relationship manager writes tries to answer it. It covers what the money is for, whether cash flow covers the repayments with room to spare (serviceability), what security there is if it does not, and how much the people running the business can be relied on.
So say clearly what the money is for. Stock that turns into cash in a few months suits an overdraft or invoice finance; a machine that earns for years suits asset finance; premises suit a mortgage. Ask for the wrong product and the answer is often no, even for a sound business.
Look at security, covenants and fees before the rate. A cheaper rate with a personal guarantee and tight covenants can be a worse deal than a dearer one without, and arrangement, monitoring and exit fees change the true cost of short facilities more than the headline rate. The calculators on this site show the total cost, including fees.