We are used to asking for quotes. After all, we want to know how much something is going to cost us before we commit to it. And commercial finance is no different. You want to know the exact terms of any loan before you take it out: What’s the interest rate? What are the monthly payments? And so on…
So when is a quote, not actually a quote? The answer, for commercial finance, is when an application hasn’t been submitted.
The difficulty arises because of the nature of commercial lending, and it being a bespoke service. Unlike, for example, a residential mortgage, the terms for a commercial loan are not advertised in advance. Lenders look at the whole deal, from the security provided and the ability to repay, right down to the borrower’s experience. Based off all these factors, the lender is then able to provide a quote as to the terms of the finance available. A lender therefore needs to see a well presented application in order to be able to provide an accurate quotation of the terms available.
If you are provided with a “quote”, without having submitted an application for finance, then odds are it is not an actual quote for you, but a generic one. Once an application for finance is submitted, I wouldn’t be surprised to see that change.
So what’s the solution? If you want to have all the information at your fingertips, in order to make an informed decision, then you need to apply for finance, otherwise you’re only speculating about your financial options.