There’s good news for SMEs – approval for small business loans is on the rise, with 35,500 small business loans approved during the first quarter of 2015 alone, according to the British Bankers Association. It is believed that a greater awareness of alternative financial products – and indeed a greater availability of these products – has played a major role in transforming lending for small businesses. The question is, what are the best small business loans, and what should SMEs really be looking for in a good small business loan that will help them to grow and develop their business?
In today’s ever-changing economy, it’s vital for small businesses to be in a position to grab growth opportunities as and when they arise. This means that quick access to small business loans should be one of the most important deciding factors. Some banks are now offering same day credit upon approval, while alternative small business loans could be even better, with reports suggesting that the average period for invoice finance approval is just 8 hours under normal circumstances.
While securing small business loans at the height of the financial crisis was challenging, there is no reason for modern businesses to jump through hoops for approval. While nearly half of all businesses thought it was difficult to get a small business loan back in 2012, only 26 percent still hold that point of view today. Small business loans should be simple, and they can be. Alternative financing is especially simple, with informal lenders often having much more lenient criteria.
A common concern when it comes to traditional bank loans for businesses is that small businesses are often not the most valuable demographic. Smaller loans are not in many banks’ best interests, which means they may charge higher interest rates to make an SME a more attractive investment. Businesses should not be paying higher interest rates for taking smaller amounts. If SMEs compare small business loans online at compareyourbusinesscosts.com, they can identify the best rates.
Small business loans of between £1000 and £25,000 can have significant benefits for startups and small companies striving to grow and develop within their chosen industry and sector. Small business loans can help boost profits, increase turnover, and make it a more realistic option to expand an existing workforce. Around half of all businesses in the UK fully expect to increase turnover during 2015, and a greater access to small business loans is believed to play a major role in this confidence.