Long Term Business Loans

  • Market-leading rates
  • Longer repayment terms tailored to your business
  • Borrow up to 60% of your turnover

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Long Term Business Loans

While a short-term business loan can boost cash flow quickly, allowing you to cover operational costs or fund growth, a long-term business loan can provide you with more capital, and more time to pay.

Getting a long-term business loan means long-term growth for your business, which is essential to thrive in a highly competitive market. Securing the right terms, however, without expert advice is challenging.

With Clifton Private Finance, we provide business finance solutions tailored to you and your business, finding you the most competitive terms from our panel of exclusive lenders.

  • Loans from £20,000 to £25 million
  • Secured and unsecured business loans
  • Cash-flow funding, equipment finance, merchant cash advances, asset finance, VAT loans, business acquisition finance and SaaS finance
  • Loans for retail outlets, restaurants, cafes, florists, hairdressers, pharmacies, hotel loans, and more
  • R&D Tax Credit refund service

Business Loans Success Stories

Business Loan for Procurement Company
Area
Nationwide
Capital Raised
£1M
Date
January 2025
Asset Finance for a Battery Energy Storage System
Asset Finance for a Battery Energy Storage System
Area
Cheshire
Capital Raised
£750K
Date
January 2025
Commercial Bridging Loan to Refinance Hotel Before Sale
Commercial Bridging Loan to Refinance London Hotel Before Sale
Area
London
Capital Raised
£13.8m
Date
January 2025

 See All Business Finance Case Studies

Why Our Customers Trust Us

With expert guidance, business finance can provide an essential, versatile, cost-effective solution.

business finance rates

Market-Leading Rates

We provide access to market-leading rates for every client, thanks to our relationships with business finance lenders across the market.

Award Winning Team

Multi-Award-Winning Team

Our team of business finance advisers have years of experience and are qualified to the highest level. We're proud to have numerous customer service awards to our name.

independent advice

Fully Independent

As an independent brokerage, we focus on your best interests when comparing business finance options: from costs and terms to speed of service.

To book a free, no-obligation call with an adviser to discuss your options, contact us today.

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Our Experts

Our dedicated business finance team have deep industry knowledge and years of experience.

Meet The Team

Jon Moffatt

Jonathan Moffatt

Head of Business Finance

Ben Francis

Ben Francis

Finance Executive

James Ellcaott

James Ellacott

Commercial Finance Broker

How We Work

1. Get a Customised Quote

Our business finance brokers will get an understanding of your business and your requirements, look at your financial forecasts and accounts, and provide a sense-check on what product(s) will best fit your needs, as well as how much you could borrow, and what the costs and terms could look like.

2. Compare Options

When you’re happy with the proposed solution, we’ll go away and compare options across the market. We’ll often present a range of choices ranging from lowest cost to most flexible, and we’ll talk you through the pros and cons of each if it’s a close decision.

3. Submit Your Application

If you’re happy with the terms we can source, we’ll handle the paperwork and submit your application for you. We’ll handle any issues and questions that may arise from the lender, and we’ll keep chasing your application to ensure funds are released as quickly as possible.

4. Receive Funds

You receive your finance success! We’ll always be here for any ongoing questions or support you require during your loan term. 

Speak to a business finance specialist today

Get the funding your business needs to reach its full potential. We’ll guide you through the process and take care of the heavy lifting. 

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Authors

Guide to Long Term Business Loans

with Jonathan Moffatt & Sam Hodgson

Last Updated: 15/02/2025

What is a Long-Term Business Loan?

A long-term business loan is one where the repayment structure is five years or more.

Here are a few examples that fit the bill of being long-term business loans (business finance comes in many shapes and sizes, so this is a general overview):

  • Longer-term business loans will generally involve commercial property, which might be 10/15/25-year loans with long-term security.
  • Working Capital loans are usually short-term (under 2 years), but lenders might go as far as 5-6 years for the long term, and will still require personal guarantee/property security (PGI can insure against this).
  • Assets can also be re-financed to release equity, and asset finance lenders go up to 84 months.
  • Large (over £1m) loans can be on a structure known as ABL (asset-based lending) where they will look at various assets on the balance sheet to form a debt structure - these are completely open to negotiation.

If you need a hand deciding what type of financing is right for your business, our advisers can look at your situation and present you with a range of options to choose from that fit your needs.

But why would your business look to a long-term loan rather than a shorter-term one? What are the advantages and what can long-term business loans be used for?

Long-Term Business Loan vs. Short-Term Business Loan

There is only one real reason to consider a long-term loan over a shorter-term business loan: the size of monthly repayments.

Structuring a loan to be repaid over a longer time means that each repayment is smaller - an elementary idea. This can help in all sorts of ways, from putting less stress on cashflow, to giving access to larger sums. It is part of the flexible nature of business loans that should be considered when looking for finance.

While there are more factors to take into account than simply the size of the loan, such as interest rate, loan set-up and administration fees, and the potential need for collateral, a long-term business loan should be seen as a way of borrowing more money with smaller regular repayments.

The Advantages of a Long-Term Business Loan

Businesses never stand still. A good way to look at a business is that you are either growing or you are shrinking, and shrinking is very rarely the direction you want.

But expanding needs capital - it can’t just be done through force of will alone and no matter how much effort you put in, eventually you will need cash. Loans are a well-established way for companies to access capital to invest, and the idea is that as the company expands and income grows, repaying a loan becomes easier and easier.

A long-term loan, with its low-but-long repayment structure, can take maximum advantage of this growth plan while putting a minimal amount of strain on current and short-term finances to allow the business to build until repaying the loan is almost insignificant.

Long term business loans

Yes, there is a commitment to keep up with payments for multiple years, but when that responsibility is easily met, the value of the long-term nature of the loan is easily identified.

Perhaps the most recognisable long-term loan is that of a commercial mortgage; a long-term loan tied to property as collateral that allows a business to expand and grow its assets without putting too much pressure on monthly cashflow. 

Debt Service Coverage Ratio - A Key Factor for Long-Term Loans

As discussed, the fundamental difference between a long-term and short-term loan is of the size of your monthly repayments. In technical terms, it affects your business debt service coverage ratio (DSCR).

The ratio is calculated as NOI/DS - thus, if you have a debt service of £6,000 per month and a NOI of £10,000 per month, your DSCR would be 10000/6000 = 1.67. The higher your DSCR the better. Companies with a DSCR >2 would find it quite easy to take on a long-term business loan, while those with a DSCR <1.25 might struggle to get approved.

As long-term loans spread the cost of repayments over many years, the monthly debt service for them is low - often lower than existing short-term loan responsibilities. So, even though the total owed on a long-term business loan is greater, the impact to the business is far smaller.

Read our full guide to DSCR for a deeper understanding of the subject.

Six Long-Term Business Loan Factors to Consider

1. Collateral

While many short-term business loans are unsecured, meaning there are no asset-based guarantees leveraged against them, long-term business loans are typically secured loans.

In many cases, the asset that is used as collateral is one that is purchased with the loan (as in the case of a property leveraged against the mortgage), but this does not always need to be the case with alternative assets often suitable to use for a guarantee.

2. Loan-to-Value

When obtaining a long-term business loan, the size of the loan is limited by the value of the assets used as collateral. Loans are typically from 75% to 90% loan-to-value (LTV), thus, a loan of £300,000 would require between £334,000 and £400,000 in tangible assets to secure.

A long-term business loan used to purchase a high-ticket asset, such as specialised machinery or commercial property, will be limited by its LTV and additional capital will be needed to purchase the asset in full. This additional capital is typically called the deposit or down payment.

Long term business loan

3. Interest Rates

One of the advantages of a long-term business loan is the lower rate of annual interest, often advertised with AER as much as 10 times lower than an unsecured business loan, long-term loans can seem to have extremely affordable interest rates.

However, as the loan is repaid over many more years, the total amount of interest accumulated over the lifetime of the loan will be either comparable or greater than that of the short-term loan.

4. Inflation

Another factor to consider is that of inflation - something that is typically to the benefit of the borrower. The value of money drops slowly over time, with £100 today worth less (in terms of real buying power) than it was ten years ago. Effectively, this means that the cost of your loan repayments will be somewhat smaller as time goes on.

Using data from 1994 to 2024 as an example, the value of £1,000 thirty years ago would have the same buying power as almost £2,500 today. Looked at in reverse, a loan repayment of £1,000 per month for a loan obtained in 1994, would have as much impact on the business as a repayment of a little over £400 today.

The impact of inflation can often offset the cost of interest rates to a significant level and is worth considering when looking into long-term business loans.

5. Early Repayment

Your business may want to release itself from its debt obligation earlier than planned. It is important to look at the terms of your loan contract to understand whether this can be done and if so, what fees are applicable.

It is valuable to understand these longer-term impacts before finalising any long-term business loan.

6. Fees

Early repayment fees are not the only additional costs of many long-term business loans. Many loans have set-up and administrative fees to cover the lender's costs when assessing your business suitability for the loan. This is especially true for asset-based loans where asset valuation and due diligence are essential.

7. Government Help

Some long-term business loans can be secured thanks to government-backed business initiatives. It is worth discussing your options with your loan advisor to see if you would be eligible for a more significant loan thanks to these schemes. 

Getting a Long-Term Business Loan - 4 Considerations

Securing the right loan for your company is important. With multiple different long-term options available for business in the UK, it’s essential to not rush into the first deal that seems worthwhile.

1

Using a Finance Broker

At Clifton Private Finance we offer a comprehensive broker service to help your business get the perfect long-term business loan. Using a broker gives you a wealth of experience and ensures that you get a loan that best suits your needs.

2

Writing a Business Plan

Long-term business loans are assessed by lenders with some strict criteria and an eye on your business's longevity. Your business plan is the surest way to present your company in the best possible light, showing your long-term path as well as clearly showing your financial forecast. You must have a professional business plan.

3

Building a Good Credit Report

Your business credit history is going to be under scrutiny, so make sure it’s healthy. If you have had a few troubles, it’s worth smoothing these out and waiting a few months before making any significant loan applications to show that you’re on the right path.

4

Clearing Other Debts

Debt service is a factor in the size of the loan you will be able to take on, so improve your DSCR by clearing what can be easily paid off. This will put your business in the position of being able to access larger and more attractive long-term business loans.

Long-Term Business Loans with Clifton Private Finance

Contact our expert team at Clifton Private Finance to discuss your business needs and we will help find the best long-term business loan for you. With decades of experience in obtaining structured loans that have been designed for the complex needs of business operations, we will compare multiple loan offers to find the most suitable. Discuss your needs with us today.

Why Clifton Private Finance?

Our business loan service provides:

  • Market-leading rates
  • Fast service - finance within 5 to 7 days
  • Access to specialist lenders 
  • Expert advice - professional service 

Here at Clifton Private Finance, our business loan specialists offer a complimentary advice service and can help you choose the right finance solution for your business requirements. 

Our broker team will help you source the most competitive business loans, commercial property finance, business acquisition finance and cash flow funding solutions. 

Frequently asked questions

You can find the most common questions asked about business loans below. If you have a question that isn't answered here, please email us at commercial@cliftonpf.co.uk

Since business loans are used across practically all industries, they're useful for anyone. In particular, they're most commonly used by small or medium businesses. For smaller businesses, the loan can be used to cover startup costs, including staff hiring and stocking inventory.

For medium or larger businesses, a business loan is useful for acquiring machinery and equipment used to grow and elevate the business.

The uses for a business loan, however, are wide and flexible, and can be used in a variety of ways to grow and enhance your business. 

Business loans offer an effective solution for businesses short on capital, but there are several risks involved with receiving loans. The primary risk of a business loan is its financial risk. Should you receive an offer from a lender that lacks flexibility, has a particularly high interest rate or has other factors that make it difficult to repay the loan, there is a risk of an impact on your credit score, loss of secured property, or fines.

 

Businesses use finance to pay for a variety of products, properties, and more. As a business, finance is commonly used to start up businesses, and cover upfront costs, including staff payroll, equipment and inventory stock.

Business finance is also used for expansion: if you're looking to improve the speed, efficiency, or capabilities of your business, and it's a fantastic way of securing funding to support growth by covering expensive equipment costs.

 

Business finance involves the direct involvement of brokers in organising financial transactions, business finance brokers liaise with clients and lenders to secure the best coverage of a requested loan amount, as well as the most competitive interest rate.

Accountants, however, are solely responsible for the documents and reporting of the transactions.

When it comes to business finance, a business loan is perhaps the most standard method of acquiring capital for your business. These traditional loans are highly flexible, with a broad range of applications to support the growth and development of your business.

The following is an example of a business loan application that is particularly common:

Scenario:

A construction company is looking to acquire equipment to undertake a large project, but they lack sufficient funds to purchase the equipment outright.

Instead, they consult with Clifton Private Finance, who find the very best market rate business finance deals and organise a £100,000 loan for the construction company.

Process:

After an initial consultation with one of our business finance brokers, the broker reaches out to a wide panel of lenders, offering a range of competitive offers to review. The broker receives an offer for the full amount with a competitive interest rate, allowing the owner to pay the business finance loan without greatly reducing cash flow.

Result:

With the purchase of the new equipment, the construction company can now complete the large project, and once complete, the large profit generated from the project itself is more than enough to cover the cost of the business loan.

Let us do all the hard work of finding the right product and lender for your circumstances. We secure business finance for applications of all types, and we negotiate competitive lending to meet your needs and timescales.

Jonathan Moffatt
Head of Business Finance

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