Looking for Business Loans? Why It Pays to be Proactive
In terms of business loans, 2015 has certainly been full of ups and downs. On the downside, business loans are still very much a lottery, with the chance of a first time SME applicant being approved for funding hovering around the 50/50 mark. On the upside, we’ve seen the proposal of new schemes such as the British Business Bank referral programme, which has got many small businesses thinking more positively about the future. But is this scheme really the answer we’ve been hoping for? Let’s see…
If you haven’t already heard of the British Business Bank referral scheme, it’s a proposal that’s expected to materialise in 2016, offering greater flexibility to small businesses in terms of business loans. With acceptance rates still wavering, the idea is that banks who are unable to offer a company a traditional business loan will be able to refer them to an alternative loan provider. The thought is definitely there, but there are already many concerns that businesses could be hindered by the programme, not helped.
The biggest issue we’re seeing so far is related to delays. There is a widespread understanding that the procedures businesses will need to go through in order to be referred will be ‘lengthy and onerous’, which will affect how quickly businesses will have access to their funding. As many small businesses know, speed is key when it comes to business loans, enabling us to grab important growth and development opportunities as and when they arise. These may include, but are not limited to,:
There are very few businesses out there who can afford to undertake such a long referral process. If we’re serious about growing a business, we can’t sit around and wait for something to happen. We need to be proactive and MAKE it happen! What many businesses don’t realise is that a referral isn’t the only way to access alternative financing. These sorts of business loans can be accessed independently, or through price comparison websites who can help to put businesses in touch with the best providers.
By opting to be proactive when it comes to business loans, many small UK companies could find they have the opportunity to access funding in a number of ways – through invoice trading, crowdfunding, pension-led funding and so on – much more quickly than they would by waiting for a referral through the British Business Bank scheme. While the programme works in theory, there are many ongoing issues surrounding the practice, which is why businesses should be considering alternative options.