To help you with the application process, we have compiled a ‘jargon buster’ to explain some of the more commonly used terms surrounding business finance. Whether you are confused about unsecured business loans, unfamiliar with secured business loans or not sure if equipment leasing is the most suitable option for your needs, we hope our jargon buster will help.
If you cannot find the answers to your questions below, please do not hesitate to contact our business finance advisors on 0800 008 6938 or by emailing us. As experts in business finance, we will be able to answer any queries you may have.
Following the underwriting of an application, if Ortus Business Finance is able to arrange your finance, an acceptance will be given by the funder along with full details of the terms of the arrangement. All appropriate paperwork will then need to be signed.
Annual administration fee
An annual fee that covers the ongoing cost of managing your business finance arrangement. The annual administration fee will be automatically charged by the funder on the anniversary of your lease/loan start date.
An online form filled in by you, to obtain all the information we require to make a decision about your application and the best business finance solution for you. Details we need include, but are not limited to, personal details, business details and information about the type of business finance you are looking for and the amount you would like to borrow. (Details can also be given over the phone on 0800 008 6938.)
The initial fee charged by the funder for the arrangement of your business finance, including the provision of necessary documentation.
Rather than borrow money to purchase equipment, equipment leasing may be a more suitable option for you. The funder will purchase the equipment on your behalf and with agreed repayment terms in place, you ‘lease’ the equipment from them.
At Ortus Business Finance we work with a panel of funders and will introduce you to a company, or ‘funder’ who will advance your unsecured business loan, secured business loan or arrange your equipment leasing agreement.
A formal agreement provided by a business director or third party as additional security to support an application.
Rate – monthly/annual
The interest rate charged could be on a monthly or annual basis, dependent on the type of finance arranged.
A document that the customer (the person taking out the equipment lease/loan) needs to sign to form a legal contract between themselves and the funder.
No payments are made for an agreed period, specified at the start of the finance agreement; capital and interest are then paid monthly until the loan amount has been repaid in full.
Repayments of the interest and capital are agreed at the beginning of the term. These stay the same throughout the loan period, until the finance arrangement has been repaid in full.
At the outset of the loan, a repayment amount is agreed for the first year. During the following year the monthly amount is stepped up to a higher level, but stays at this level for the duration of that year. For the third and final year of repayments, the amount increases again, so that by the end of the term the capital and interest has been repaid in full. This is a popular repayment method for businesses that envisage an increasing financial return year on year.
Sale and leaseback
Equipment that you own can be sold to the funder with the agreement that you will rent these items back. Equipment leasing in this manner enables you to free up capital to be put back into the business and while you no longer own the asset outright, you can still benefit from the use of it.
Secured business loans
Longer term loans that are generally for a higher amount. Secured business loans must be secured against a property you own, or that you own a proportion of equity in that is equal to or greater than the amount you are looking to borrow. Think carefully before securing other debts against your home.
The funders process of approving an application, various searches and enquiries are made against the business/individual/loan application. Results are then reviewed and considered in relation to the amount and type of finance that has been requested.
A fee to be paid to the funder as a contribution to the cost of any property valuations required.
Q. How do I apply for a loan through Ortus Business Finance?
A. To apply for a loan, please complete the application form. We endeavour to respond to all enquiries within two hours (during business hours, 9:00am-5:30pm). Alternatively you can give us your details over the phone, or ask further questions prior to your application, on 0800 008 6938.
Q. What happens when I apply for a loan through Ortus Business Finance?
A. We treat each application individually but in summary we will work with you to gather all the necessary information to present your application to one of our approved panel of funders. We will choose the funder that we think best matches your requirements.
Q. I would like to apply for a secured loan. What type of property would you secure my loan against?
A. Loans are secured against commercial premises or residential property that you own outright or have a mortgage on, regardless of whether you live in it currently. The amount of equity in your property will need to be enough to support the amount of money you’re looking to borrow. Think carefully before securing other debts against your home.
Q. Do my repayments increase during the term of my loan?
A. No, unless you have opted for stepped repayments. Repayments have a fixed interest rate from start to end so that you can manage your cash flow accordingly. (See Jargon buster for full details of repayment options).
Q. How do I make my repayments?
A. Standing order is the preferred payment method by our funders, however other forms of payment can be considered and will be discussed and agreed during the application process.
Q. What should I do if I feel that I am struggling to make repayments, or if I feel like I am getting into financial difficulty after taking out my loan?
A. Please get in contact with your funder straight away so they can understand your circumstances and agree the best way forward.
Q. What fees do I pay to Ortus?
A. You don’t pay anything directly to Ortus, we are remunerated by the funder on a variable commission basis typically a percentage of the advance.
Q. How long is my approval valid for?
A. Funder approvals are valid for an initial 30 day period.