According to the BBA, the British Banking Association being the leading trade association for the UK banking sector, SME lending data for Q4 2016 shows that banks said ‘yes’ to 8 in 10 applications for finance.
This is great news for businesses seeking funding to grow their business. But, it would be interesting to know how many applications were dismissed before they even got to the stage where a ‘yes’ or ‘no’ consideration could even be made.
For many SME business owners, the process of gathering the right information and presenting it in such a way that the application progresses to the ‘consideration stage’ stops them from beginning the process in the first place.
It’s likely that the businesses that received a ‘yes’ from the banks either had an expert in-house, such as a finance director, or paid a business or financial consultant to help them complete the application on their behalf.
The perceived pain of applying for funding and the knock backs, especially for start-ups, means that business owners are seeking alternative easier routes, often turning to family and friends for a loan. In this case emotions quickly come into play, often causing terrible friction; even splitting families and ending friendships.
Our view is, if you lend to a family member or a friend, be prepared to have to wait to see the money again. When you do regard it as a bonus.
There are alternatives to banks and friends for raising funding.
Have you considered asset finance?
As an example, we recently gained funding for a new car hire franchise. As a new business, they had no financial information available. The normal routes, such as the banks, would not entertain this fledgling business.
However, we knew the right questions to ask of the business owner and how to submit this information to the appropriate funder to gain a positive result. Because we are involved with a wide range of funders we knew the appropriate funder to approach for this business situation.
Submitting the right information in the right format to the right funder is all part of the service we offer; not an added extra. It takes the pain out finance applications and is why our ‘yes’ rate is 99.9%.
If you need funding to grow your business, give us a call on 01403 258934 or complete the enquiry form.