It’s no secret that the last few years have been a tough time for businesses of all sizes across the UK. From the impact of the 2008 financial crash to the widely acknowledged business challenges created by the pandemic and rising supply chain costs, many industries have faced challenges like never before.
Finding new injections of much-needed cash could be the solution to getting your business back on an even footing – or fuelling growth. However, the background of the global economy can impact on the most modest of loan applications from the smallest of businesses.
In December 2021, the Office for National Statistics reported that almost a third (29.5%) of all trading businesses were still suffering from a loss in turnover, with 13% stating they had no cash reserves available – the highest percentage since June 2020 (6%). This has led to a sharp rise in the application for new business loans, with an increase in the level of debt taken on by UK SMES by 25%, according to the Bank of England.
What does this mean for you, as the owner of a small or medium-sized business? Well, some lenders have become much more selective when it comes to choosing which businesses will successfully receive funding. It doesn’t mean you won’t be successful, but it does mean that having the right expert advice and guidance to find the business loan that works for your purposes is vital to increase your chances to getting access to the finance you need to achieve your business goals.
Whether you’ve just established a new business, are a sole-trader, SME or larger enterprise, there are a couple of key items that lenders will always consider when weighing up the merits of a business loan. What may surprise new applicants, however, is that it’s not just about your business, but your personal financial record as well.
From this they can extrapolate how trustworthy or reliable you are likely to be with your business finances , as well as whether you or your business will be able to guarantee repayments, if required.
The key financial markers that any business loan lender will want to assess are known as the “5 C’s of Credit”. These include:
To apply for a business loan, you must first meet a few key criteria. These vary slightly, depending on the size of your business, but key evidence will always be needed to begin approaching a lender.
Whether you’re a sole trader, limited company or a partnership, all business loan applications will ask for:
A core value we hold at The Finance Hub is that we always take a consultative approach with our customers; this helps us to get to know who you are, where you see the future of your business and how we can help you reach your dream milestones.
That’s why, with all new business loan enquiries, we will always have a chat with you first to understand better what you’re looking to achieve – and what will be the most beneficial route for your business.
The best part? This initial consultation is absolutely free! We want to help support businesses of all sizes equally, whether you’re a sole trader, SME or limited company, and will always look to find the best lenders for your unique needs. And if we don’t think a business loan is the right solution for your particular circumstances, we’ll discuss alternatives and put you in touch with the expert we think can best help you.
Growing a business can be a very complicated process, which our affiliates know all too well. Through our initial consultation, we will talk you through the questions that bankers and brokers often won’t take into account, giving you the expert guidance and preparation you need to apply successfully for a business loan or cash flow lending.
If you choose to apply for a business loan, we will then take you through the application process in a simple and clear way, helping you to understand which lenders we think are most aligned with your business goals, so you can have confidence that the finance you choose to access matches your circumstances and objectives. We also ensure that we only submit funding applications on your behalf that have a good chance of success, so reducing the chances of failed applications making a dent in your credit score.
Want some quick advice on the best ways to improve your chances of getting a business loan? Look no further! We recommend:
If you’re interested in applying for a business loan with The Finance Hub, get in touch today! We’re always happy to take a call, email or make you a coffee if you pop in for a chat.