If you’re starting a business or launching a new project, you might need a large loan to get things off the ground. There are different ways to borrow, but using property or other assets as security often lets you access bigger amounts.
At Ascot Mortgages, we help business owners arrange loans like commercial mortgages and bridging finance. In this guide, we’ll explain how much you could borrow, how the process works and how to qualify for a large business loan.
How big of a business loan can I get?
Because Ascot Mortgages offers secured loans, the size of your loan depends on the type of finance you choose and the value of the collateral you use as security. Lenders typically offer up to 50% – 75% of the collateral’s value, though some may allow borrowing of up to £10 million or more.
With commercial bridging loans and finance, the amount you can borrow is determined by the value of the property or other asset you use as collateral. For example, the lender will consider a property’s condition and its marketability. These factors will strongly affect how much you can receive as a loan.
Here are more factors that determine how much you could borrow:
- The equity you hold in the asset.
- The loan-to-value (LTV) ratio that the lender is prepared to offer.
- The type and condition of the asset.
- Your repayment or exit strategy.
- Your financial history and ability to manage repayments.
Bridging finance serves many purposes and it is popular with business start-ups that plan to refinance or sell an asset within a set period to repay. You can learn more about how businesses raise funds through short-term finance on our page about cash flow assistance and raising capital.
How to get a large loan to start a business
Getting a large business loan might sound daunting, but the process is straightforward when you know what lenders expect. The key is preparation; having the right information and documents ready will help.
- Gather key details: Collect all required information, including collateral specifics (value, location, condition), a detailed business plan, financial forecasts and your credit history.
- Structure the proposal: This is where working with a specialist broker like Ascot Mortgages is ideal. We help structure your proposal to meet the specific criteria of property-secured lenders, ensuring your application highlights the strengths of your business and collateral.
- Submit your proposal for assessment: Your broker will submit the application to the right lenders. They will then assess the security offered (the collateral), your repayment strategy and your overall financial position.
Being organised and transparent can significantly improve the speed of your approval.
How to qualify for a large business loan
To secure a large business loan, lenders primarily assess your ability to repay the debt and the strength of the security you provide. Here are the key requirements you must meet:
- You must have a solid exit strategy: This is the most critical factor. The lender needs a definitive, achievable plan for how you will repay the loan at the end of the short term.
- Assets as security (Collateral): Since bridging loans are secured, you must put forward high-value assets, typically a commercial, residential or investment property. The better the property’s condition and marketability, the higher the Loan-to-Value (LTV) ratio you may be offered. The lender will also consider whether there is already a loan secured against the property, such as a mortgage, as this could limit the value of it to them if repossession is necessary.
- Required deposit: Most lenders require a deposit, often in the range of 25% – 35% of the property’s value. A larger deposit (lower LTV) generally results in a more favourable interest rate.
- Credit history: Unlike some residential loans, a perfect credit score is often not essential for a bridging loan, but a check is still performed to assess your repayment ability.
- Experience: Previous experience relevant to what you need the loan for – such as property development or renovations – can strengthen your application by demonstrating to the lender your ability to manage the project effectively.
By preparing a detailed application that clearly covers these points, you significantly improve your chances of qualifying for a large business loan.
With the right support, you can confidently navigate lender requirements and find the best deal for your business. At Ascot Mortgages, we specialise in secured finance for clients across the UK.
If you’re ready to turn your business plan into reality, get in touch with our expert team for a free consultation. We’ll help you to explore your options and take the first step towards securing the capital you need to grow.
