YOUR GUIDE TO BUSINESS FINANCE

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1 YOUR GUIDE TO BUSINESS FINANCE

2 GIBSON HEWITT MAKES BUSINESS FINANCE EASY We put you at an advantage. Gibson Hewitt has knowledge of a wide range of business finance options from business lenders across the UK, including boutique lenders providing funding tailored to specific industries and credit quality, established and challenger banks that focus on specific sectors of lending, such as asset finance or invoice finance, and alternative funding sources like crowdfunding or peer-to-peer lending. We offer exactly what you need. With our extensive knowledge of the business finance market in the UK, Gibson Hewitt can connect you with business finance that suits your business unique needs, whether that means invoice finance to improve cashflow, asset finance that allows you to purchase essential new equipment, or property finance that lets your business expand. We give you the tools to speak confidently about business finance. In the following pages, you ll see examples of the work we produce on business finance as part of our effort to spread awareness and understanding of the wide variety of business funding solutions in the UK today.

3 ASSET FINANCE The term asset finance encompasses a wide range of loan products, all concerning physical assets machinery, equipment, vehicles, and any other physical equipment a business needs to function. Broadly speaking, asset finance can be broken into three categories: LEASES A method of acquiring physical assets without paying for them outright. When leasing an object, a business will make monthly payments, including interest, until the terms of the lease are up. HIRE PURCHASE Hire purchase involves the same monthly payment structure as leases, but those monthly payments will add up to the full cost of the asset, meaning that the business will own the asset once the hire purchase term has ended. ASSET REFINANCING A way to use assets a business already has to obtain funding, where a lending institution will advance cash to a business based on the value of the asset.

4 INVOICE FINANCE Invoice finance is a method of obtaining cash advances on a business unpaid invoices. It can be broken into two distinct categories: FACTORING AND DISCOUNTING This involves a business passing its unpaid invoices off to a lending institution in exchange for cash. With invoice discounting the business will still be responsible for collecting payment for the invoice, while with invoice factoring that responsibility will be passed on to the lending institution. SUPPLY CHAIN FINANCE This depends on the other companies in a business supply chain its network of suppliers and clients. The business is given a cash advance on its invoices based on the higher credit rating of the other businesses in its supply chain.

5 PROPERTY FINANCE Property finance refers to all methods of funding the acquisition or development of property. There are many facets of property finance, and below are two important commercial property loan products: DEVELOPMENT LOANS Development loans are short-term loans issued to cover the costs of developing or renovating a property. COMMERCIAL MORTGAGES A long-term method of funding a property. The business will pay a deposit based on the property s value, and will continue to repay the loan in monthly instalments, plus interest.

6 UNSECURED LOANS Unsecured loans are loans that are not backed by any kind of collateral - property or physical assets, for example. RATES Because they pose a higher risk for the lending institution, unsecured loans often come with higher interest and lower approval rates than secured loans, though this always depends on a business individual circumstances. SIZE Maximum loan sizes are typically smaller than those of secured loans. Lending institutions often place a lower cap on the amount of funding available as another way to mitigate the risk to them.

7 For more information on business finance, speak to your accountant or visit Rangewell.com +44 (0) gibsonhewitt.co.uk +44 (0) rangewell.com Rangewell only provides services to limited companies based in the United Kingdom. Rangewell Limited (Company No ) is a registered company in England with a registered office address at 2 Union Square, Darlington DL1 1GL