The world of finance is full of hidden charges for consumers and businesses alike. Sudden, accumulating overdraft charges alienate otherwise-loyal customers for sudden missteps. PPI misspelling and IRHP rate swap sales devastate and blindside established companies.
Transparency is important. Visibility is important. But you wouldn’t know it from the constant need to hide additional costs. We are now at a point where the CMA is compelling high street banks to publish rates for unsecured loans and overdrafts of a value up to £25,000. This step shouldn’t be necessary, and we don’t view it as necessary. It should apply to all loans – from £1 to £10 million.
At Nucleus, we endeavor to be fully transparent with our fee structure: our loyal clients are our key business partners, and they deserve to know what they’re going to pay well in advance of paying it.
We’ve already covered some of the main invoice finance charges. But many business borrowers aren’t aware of the loan arrangement fee – and if they are, they don’t quite know why it exists. We’re more than happy to clear up any confusion.
What is the loan arrangement fee?
The loan arrangement fee is a common, one-off admin fee designed to cover the administrative expense of arranging a commercial loan.
The fee is standard, it is non-recurring, and if anyone tries to convince you otherwise, treat them with suspicion. Many organisations are caught unawares by the arrangement fee: the quote they receive tends to exclude it, which leads businesses to believe they’ll be paying far less than they actually owe.
By the time this becomes an issue, they’ve already signed the contract – not the most auspicious start to a business relationship, and one that might turn an otherwise happy client off for life.
How much does the loan arrangement fee cost?
The precise amount of the loan arrangement fee varies: it usually falls between 1 and 10% of the original quote. Our own calculations for this fee are contingent on a number of different factors: credit reports, due diligence, our general administrative burden, and the perceived level of risk in lending to your business.
However much your company needs the money, it’s always worth waiting for the right deal – not just any deal. At Nucleus Commercial Finance, we’re committed to providing you with a commercial finance solution that works for your business: we want you to enjoy working with us, and we hope you’ll work with us again in future.
Whatever loan arrangement fee we end up charging your company, whether it be for a business overdraft or asset funding, we make one simple, unadulterated promise: we’ll earn it.
Download the hidden fees eBook now!
Loan arrangement fee – what you’re not told
Business Development Executive
Raf joined Nucleus at the beginning of 2016 to help set up the inbound and telemarketing department. Prior to Nucleus he worked at Tungsten bank in their Early Payment team.
Before working for the bank, Raf was a Business Development Executive at Bibby Financial Services for four years where he focused on generating new business through inbound marketing.
He loves football and used to play Sunday league cricket.