Did you know? IDA Ireland gives grants to foreign firms who set up exporting businesses in Ireland.
Long-term loan Long-term loans can be for periods of up to 40 years. A mortgage is an example of a long-term loan.
Amount Cost Very large sums are potentially available.
The business must make the loan repayments regardless of the levels of profit or loss made. Over the life of the loan, this may prove very expensive if the money has not been put to good use in growing the business.
Risk
Security will be required (such as premises) for a long-term loan from a bank. In the event of non-repayment, the asset used as security can be seized and sold off to settle the outstanding debt.
Sale and leaseback If a business owns a valuable property, it could consider raising money through a sale and leaseback arrangement. Sale and leaseback is a contract to raise cash by selling a piece of property and simultaneously leasing it back on a long-term lease. This provides an immediate lump sum without any disruption to the business premises.
Amount Cost
Depending on the value of the asset, large sums can be raised.
The cost involved is the cost of the annual lease.
Risk
The business loses ownership and ultimate control of a valuable asset.
