The UK has one of the most diverse financial services markets in the world, so the question for UK business owners is not so much ‘what do I need funding for?’ as ‘where and how do I access the financing that is available?’
The first thought for many business owners is to contact their bank. This can be a good starting point if you're happy to wait 2 or 3 weeks for an appointment with a business specialist, and are confident that you won't be limiting your options by choosing a finance product available through the bank.
The business advisors working for banks are only authorised to advise you on their range of business finance products - the same products you can easily find on their website. In theory, you can find out online if they have something that fits your needs much quicker.
Banks decline 67% of all lending requests due to factors that are in the hands of the customer, which shows just how much influence hands-on business owners have on whether or not they can obtain finance. This is largely because unless they can afford a Finance Director (or similar), applying for funding is an 'after hours' exercise for the majority of SMEs.
For some business owners their bank can provide all the support they need, but for the majority it makes sense to find out what other financing options are available for their business.
To help make sense of the high percentage of rejections, picture this: you are interviewing a candidate for a key hire in your company. The CV ticked all the boxes, but now that you are talking to each other there is something missing. But the candidate hasn't really understood what you do and doesn't seem to know what they want. What's your first instinct?
The same applies when you talk to a bank about a business loan or financing an equipment purchase. Just as you can't quite put your finger on whether you found the right person for your company, a finance provider will be put off if you’re not prepared. We’re not suggesting you should learn everything there is to know about banking or business lending, but the truth is that simply filling in a loan application won't cut it anymore.
Luckily, the solution is relatively simple: If your business deserves finance from a bank or alternative provider you just need to build a good case that includes all the information outlined below. Remember, it's up to the candidate to prove they should get the job. You are more likely to get approved for a business loan or asset finance if you can supply the following data to interested lenders:
- Up-to-date financial performance: from the date of your application, ideally going back three years. These figures should show that your business can afford to repay the finance package you are asking for.
- Forecasted financial information: maybe your recent financial performance is less than stellar, or you are a new business with limited financial records. In any case, include information about new clients or projects you are about to sign and how winning those contracts will impact your cash flow going forward.
- A short description or a business plan explaining how you plan to use the funding. This is a must-have, and should focus on how the money will help you achieve growth. Additional information such as the number of jobs you plan to create, or the patent you intend to file, the will also help the financer to see you as a viable investment.
- Evidence about your personal track record: lenders will look for reassurance that they can trust you to deliver on the plans you put in front of them. Perhaps you've grown the company or managed to preserve cash better than your competitors? Make sure you include evidence to support these claims in your application.
If this sounds like a time-consuming process we have good news: by using the Finpoint finance-finder the whole process from registration to submitting your finance application to hundreds of funders only takes around 10 minutes. And because we operate online you can apply at a time that is convenient to you, so you can get back to the day-to-day running of your company sooner.
As a growing business, we know that challenges can come along at any time - particularly in the finance department. Perhaps you are considering changing direction on how you manage your accounting? Or you know you could improve the way your existing in-house finance team works but you’re not sure where to start? Whatever your challenge, we have a host of business support services that cater to all your needs.
Start your application today
Complete your application within 10 minutes, your application is then presented to over 120 lenders and you receive your funding matches within 24 hours. All completely free! What could be simpler?