Frequently Asked Questions

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Usually yes – we believe proper advice is worth paying for and we normally charge a fair fee for our advice. These vary by complexity and product but are generally around 1% of finance raised. Some lenders reduce the fees they charge to you when we make the introduction, which can offset some or all of this fee.

Our initial consultants are always free. After that – it takes a significant amount of work to find the best financing solution and complete the process in a manner to maximise the chance of success.

It is worth remembering:
  • We have arrangements with certain lenders which means we may be able to access a better deal than going direct;
  • Many lenders require you to go through a qualified intermediary like ourselves so you cannot access all of the available deals directly;
  • We can search a wider range of lenders because we know who is best suited to your requirements; and
  • We can help you assess the right financing solution and ensure it is arranged in a timely manner – ensuring you maximise the opportunities for your business.

Fees are not paid if we are unable to get you a finance offer.
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One of our expert team will conduct a free initial consultation with you – either in person or over the phone. In this consultation – we’ll discuss your business, the market conditions, review the current financial position and discuss your aspirations and financing needs. Once we have this information - we’ll discuss the various financing options open to you.

After this meeting – you may want indicative terms from the most appropriate of our panel of 270 lenders. Depending on the product we can usually provide this within 1-3 business days and at no cost.

If you require a more formal offer (such as an agreement in principal) you can instruct us to engage with lenders on your behalf. We will work with you or your accountants/advisers to gather the relevant information and then handle all stages of the process and negotiations with the lenders for you. We’ll keep you informed at every step – but minimise the hassle for you.

Once legals are agreed funding can take place.
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We work with over 270 different lenders covering high street lenders, private banks, challenger banks, Peer-to-Peer lenders, funds and niche players who specialise in individual area or sectors. We only work with reputable lenders who are authorised by the FCA and we do not work with payday lenders or other lenders whose rates we regard as too high. We are adding lenders on an ongoing basis to ensure we can always offer you the most appropriate solution.
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Whilst your current bank may still be your best option to borrow – changing regulation, capital requirements and risk appetites has meant that many areas are left under-served or the amounts you can borrow are lower than you may need.

The government and regulators have sought to open up the financial market to new lenders and providers have been quick to react with a record number of sources of finance in the market. This is a fantastic opportunity for business owners to access capital that wouldn’t otherwise be available. However it has also complicated the market with different lenders targeting different products, sectors, risk profile, asset types and so on. Some will also only deal with introducers such as ourselves.

Keeping on top of the market is a full time job that people running a business can rarely find time to do. We can take you through the options based on your business and funding requirements – taking into account your preferences for rate, speed of execution, certainty of funds, duration of borrowing, repayment profile and so on.
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We work with developers of all different sizes and experience. Whether you are a first time developer or an experienced player undertaking a large project – we can help find the right solution.
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This depends on the nature of the project, its profitability and your background and experience. It will also depend on your appetite for risk and how much you are willing to pay for funds. We can structure deals – including subordinated debt – at up to 90% of the total project costs and if you have other sources of asset security this could even be as high as 100%.

We can also access funding on a joint venture basis when a developer has no cash to put in but has a viable project and a strong track record – where profits are shared with the finance provider.
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This generally depends on the amount you wish to borrow but rates can start from less than 6% per annum for lower risk projects and will generally be related to the loan to value (LTV) of the project. Our broad market access and relationships mean we can find attractive financing for the right deals.
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It is usually necessary for the property, the project Gross Developed Value (GDV) and all development/construction costs to be independently assessed prior to the loan facility being formally approved. These valuations and professional services, as well as legal costs are expenses of the borrower. If you are drawing down the loan in several tranches (as the project develops) further valuation costs may apply.
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Our lenders can provide decisions very quickly (often in a day or two) so the valuation and other advisors usually drive the timing. We can work with you to select the right advisers and to ensure the lenders have everything they need to.
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No – we work with lenders who will consider lending on a second or even a third charge basis. What matters is the nature of the project, the quality and value of the security and the LTV. Consent will often be required from existing security holders.
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We work with existing businesses as well as those looking to start out. Audited accounts or a previous trading history are not always necessary as lending decisions can be made against the value of property and your ability to repay the loan from business income or rental income.

Previous credit problems will also not necessarily prevent you obtaining funding as there are lenders in the market who will help (although not all so it’s important we know about any history up front so we can guide you in the right direction).
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Typically we are able to arrange a commercial mortgage up to 80% of the 'bricks and mortar' value of the property or 75% of the business purchase price (including goodwill) if you are taking over a going concern. We have strategic partnerships with lenders who will, in certain circumstances, offer a commercial mortgage up to 100% funding if additional security is made available. These levels vary over time so please get in touch to discuss current market conditions.

We can also often help you to secure additional top up and bridging finance for the purchase if necessary and have special deals available of up to 95% funding for sitting tenants wishing to buy the business or Commercial Property they are currently successfully renting.
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The interest rate and terms offered generally depend on the amount you wish to borrow as a percentage of the purchase price, the term of the loan and your previous credit history. We have access to the most competitive financing solutions in the market and interest rates currently start at around 2% above bank base rate.
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A Commercial Mortgage is a very specialised product and the majority of lenders will only work via qualified and accredited Commercial Mortgage Brokers. We will consider your borrowing requirements and match those requirements to the panel of lenders we work with.
We’ll manage every step of the process to optimise the outcome and minimise the time and effort from you.
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We can usually provide a minimum of three proposals within hours and a decision in principal will usually be available within a business day – giving you confidence to proceed.
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We do not typically charge up-front fees for commercial mortgages. We take a fee from the borrower for making the introduction. There may be a fee for more complex arrangements such as business purchase.
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Short-term loans or 'Bridging finance' is typically secured on either a first or second charge basis on an asset with a readily realisable value.
This may be:
  • freehold or long leasehold property
  • Land and development sites
  • Other assets such as jewellery, cars, art etc.
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We can arrange finance for anything from £10,000 to £25 million.
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It depends on the complexity but funds could be in your bank account in 48 hours or less if other professionals (such as valuers can be lined up).
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Set up fees will generally be 1-3% of the loan amount and interest rates typically range from 6-18% depending on the asset type, your credit history and so on. Rates have been improving over time as the market becomes more competitive so please get in touch to discuss the best terms available.
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Yes – interest only loans are available
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Yes – we can access facilities where the interest is rolled up and paid at the end of the loan
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An 'open' bridging loan is a loan where the exit or repayment method is known but not yet fully formalised (e.g. the sale of a property which is currently being marketed). A 'closed' bridging loan is a loan where the exit or repayment method is fully finalised (e.g. the sale of a property where an exchange of contracts has taken place).
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Leases vary but typically fit into two categories:
  1. Direct Lease. You identify the asset (and sometimes negotiate the price) and arrange for the leasing company to buy it from the manufacturer (if new) or the previous owner (if used) and the leasing company rents it to you.
  2. Sale-and-leaseback (also called purchase leaseback). You sell an asset you already own to the leasing company for fair market value or book written down value and then lease it back.
In both cases, the lessor owns the asset, and rents it to you. As with any other rental agreement, you return the asset at the end of the lease (some leases grant you an end-of-lease option to renew the lease or to sell the asset to a third party as agent of the lessor).
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There are three major types of leasing: finance leasing, operating leasing and contract hire. Whilst not strictly a type of leasing, hire purchase has similar characteristics:
  • Finance Lease (Full Payout Lease). You effectively acquire all financial benefits and risks of the asset without actually acquiring legal title. The leasing rate is set to collect the full value of the asset plus the finance charges over the contract duration. At the end of the lease either: the asset is sold to a third party (and you typically share in the proceeds); you extend the lease (often at very low rate as the residual value is likely to be minimal) or you acquire the asset from the leasing company at a market or a pre-agreed price
  • Operating Lease. Often with a shorter time frame than financial leasing (usually significantly shorter than the working life of the asset), operating leasing is more like regular rental. After the lease has expired - the lessor expects to be able to either sell the asset in the second-hand market or to lease it again and will therefore not need to recover the total asset value through lease payments. There may be an option to extend the leasing period at the end of the contract.
  • Contract Hire. A form of operating lease (often used with cars and other vehicles) that includes a number of additional services such as maintenance, management or replacement if asset is in repair.
  • Hire Purchase. This is an agreement for the hiring of an asset with an option to purchase. The legal title will pass to you when all payments have been made. The term of a hire purchase must be significantly shorter than the working life of the asset and may include a final payment to reduce monthly payments.
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  • Improved cash flow. Leasing gives you access to the asset with minimal up-front payments – allowing you to pay for the asset with the income it generates.
  • Flexible time frames. Leasing contracts can be structured to fit your requirements. Use an asset for as long as you need it without owning it forever.
  • Simplified cash flow management. Lease payments are usually flat, making cash management more predictable and easier than with a variable rate loan. The fixed interest rate of a lease also helps if interest rates rise.
  • Hedge against obsolescence. Depending on your end-of-lease option you may be able to simply return the asset to the lessor. You will not have the hassle of selling the used asset or run the risks related to residual value and obsolescence.
  • No debt. An operating lease is generally not classified as debt on your balance sheet.
  • Tax. Operating lease payments may be tax deductible and hire purchase agreements may allow the lessee to claim capital allowances. Professional advice should be sought before relying on this.
  • Additional advantages. Some leases offer additional advantages such as cancellation options or asset maintenance.
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You can lease most types of durable assets, from equipment valued at a few thousand pounds to assets worth millions.
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One of the advantages of leasing is that you can set the duration to suit your business needs – from a few months to many years.
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When you issue an invoice – rather than waiting for it to be paid – you can ‘factor’ it. Your factor partner typically pays you 80-90% of the invoice value straight away (although in some industries it will be lower) – regardless of when your customer actually pays. The factor takes over responsibility for the administration and collection of the invoice – saving you administrative time and money. Your customer pays them directly and once they have the factor repays you the balance, less any fees due.

Whilst factoring is quite common we can also offer Confidential Factoring – where you customer never knows that you have factored their debt if you prefer.
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The principle is very similar. However – with invoice discounting you retain control of the payment collection process and your customer never knows that it has taken place.
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It depends which option you choose. With recourse factoring – you retain the risk of the customer not paying. If you opt for non-recourse, the factor still pays you even if your customer doesn’t pay them. There is a charge for this credit insurance.
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Historically there were two costs – a service cost that depends on your size and number of customers (typically 0.25-3.0% annual turnover) and an interest rate, usually charged on a daily basis. However – some lenders now offer the flexibility to just ‘pay as you go’. Rates vary depending on credit quality of your business, credit quality of your customers and whether you want to insure the credit losses. We can assess the best option for your business.
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Very. You can choose to factor your whole book or choose which invoices you want to submit and when – all typically handled via an online portal. This can be particularly helpful for businesses with marked seasonality in their cash and sales cycle.
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  • Aside from the obvious considerations of rate and fees - given the nature of factoring there are some other issues to consider including:
  • Reputation. The factoring company will be interacting with your customers to collect payment. You should work only with a reputable firm to reduce the risk of negatively influencing your customer relationship. We work with all the major factoring organisations and will recommend the one that is best suited to your business. All our partners are members of the Factors and Discounters Association.
  • Service levels – how easy is it to submit invoices and how quickly are they paid.
  • Exports factoring capability. If you export it is essential the factor has its own network, or affiliate partners, in your customers’ country to provide on the spot collection.
  • Bad debt protection – Not all factors offer the ability to insure against bad debts.
  • Sector expertise – make sure your factor company understands your business and your industry
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We can provide access to loans from £20,000 to £20 million depending on the size of the business and security package available.
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Rates vary significantly depending on many factors and our role is to make sure the lender fully understands your business so they can offer you the most competitive rate. Rates are becoming increasingly competitive so finding the right solution can save you significant amounts of interest costs.
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This varies by lender, but we can work with most businesses in most sectors. Whilst most lenders will prefer a business with a long track record – we can access funding for start-up business and those where the directors have had previous credit issues. From our panel of over 270 lenders – if financing is available – we should be able to find it!
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A personal guarantee is when an individual (often a Director) – guarantees to make payments (sometimes up to a cap) in the event that the business borrowing the loan cannot afford to make the repayments. Whilst this can lower the cost of financing and some lenders insist on it - it makes the individual personally liable for the debt and hence should be carefully considered.
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Phone: 01202 800100
Email: contact@abenfinancial.com
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