4 Tips for Securing an Alternative Small Business Loan - Compare Business Costs Online Today
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4 Tips for Securing an Alternative Small Business Loan

4 Tips for Securing an Alternative Small Business Loan

This year, many media sources have been reporting that high street banks are now once again lending to small businesses, approving more and more companies for a small business loan. However, while it’s true that lending to small businesses is up on last year, there’s actually much more to this story than meets the eye. Lending from high street banks is up, and yet it’s widely acknowledged that many up-and-coming companies are still struggling with rejection after rejection after rejection. ‘Our business finance system is not where it should be, and some of our most promising companies still struggle to get the finance they need to grow’, says Dr Adam Marshall of the British Chambers of Commerce.

As a result, we’ve seen a huge influx in applications for alternative small business loans, such as invoice trading or asset-based finance. However, it’s important for businesses to remember that, while approval rates for alternative small business loans are typically higher, it’s still essential that businesses plan, research, and prepare to give themselves the best chances of securing the funding they need.

  • Think Figures – Before approaching alternative small business loan providers, the first step is to think figures – how much you need, how much you can afford to pay back, and how much you’ll allocate into different areas of your business. It may be worth working with an accountant at this stage.
  • Prepare Paperwork – Many small business loan providers won’t make you jump through hoops like high street banks will, but they won’t give you an automatic approval, either. They want to know they’re making a beneficial investment, so may ask to see financial paperwork, including VAT returns.
  • Be Honest – If you’ve previously been rejected by a high street bank for a small business loan, it may have been because you were requesting to borrow an amount that the bank wasn’t 100 percent sure you’d be able to repay in full. Be honest about how much you can take on – don’t get caught out.
  • Compare Offers – Remember – not all alternative small business loan providers will be able to offer an attractive deal. Rates will, of course, vary between suppliers, so it’s a good idea to compare business loans online to find which providers are offering the most affordable repayment terms for your needs.
  • Alternative small business loans are the solution many companies have been searching for, but it’s important to understand that, contrary to popular belief, approvals aren’t guaranteed! That’s why it’s essential that small businesses are prepared, giving themselves the best chances of securing funding.