More Companies Can Access Unsecured Finance

One of the UK’s leading unsecured business lenders is changing their core lending criteria this month.

Historically the market for term unsecured lending (term being anything from loans over 2 years upwards) has been restricted to companies and businesses with at least two years filed accounts.

The challenge for businesses has been that whilst the lenders are promoting a willingness to lend to companies that are 24 months old, the requirement to have 2 years filed accounts means that in reality a business needs to be nearer 30 months old before they will be considered.

Any company looking to borrow will need to provide management figures for the second year trading but not a full set of filed accounts. Given the development in cloud bookkeeping then most SMEs should be able to meet this criteria.

Why Change Criteria Now?

For many people it may seem a strange time to relax criteria. There was supposed to be an air of uncertainty and doubt in UK plc, so why make this move now?

The answer appears to be that the move is driven by several factors;

• It was already planned and in pipeline
• The development of cloud bookkeeping systems means the standard of SME management information is better than ever before
• The lender has cash to lend and there is little profit (more likely a loss) in holding cash that is not being lent

The big message here is that commercial finance is available despite the messages being communicated in the media.

The prospect of lower interest rates for a longer period is giving SMEs the opportunity to borrow at affordable levels, at the same time the economic position is good for exporters and SMEs are seeing opportunities to grow.

This move by one of the leading business lenders is really good news for the SME sector. They are not alone, we are seeing announcements from many lenders about being open for business post Brexit, we are also seeing more competition in the commercial lending sector at a time when companies may really benefit from the extra cash.

What Could Be Borrowed?

There are always parameters from which any lender will work, in summary (and this is by no means fixed) the parameters are;

• Up to £250k on a term up to 5 years
• Typically lending up to 25% of annual turnover
• No set minimum turnover required although the 25% rule could mean lower loan amounts being offered

As for applying, we have some exclusive terms and service levels so please get in touch if you, a client, contact or colleague is interested.

The timescale from application to offer is inside 48 hours with completion anytime afterwards. This means up to £250k injected into your business from as little as 72 hours (typically give it a week to be safe).

For more information then please contact us.

By Dave Farmer

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