How to qualify for Small Business FinancePublished on 3rd April 2019 2019-04-03T11:00:00+00:00
As a small business owner, you might believe that the amount of funding opportunities available to you is limited. Thanks to the Alternative Finance industry, however, the number of external funding opportunities on offer has never been wider and continues to grow, seemingly, by the day. But if you’re seeking to expand your operations, move into your first premises, acquire new equipment or receive support for your working capital, one way to achieve your goals could be to apply for Small Business Finance. An umbrella term describing a diverse collection of finance products, Small Business Finance offers you the funds, resources and means to pursue a prosperous and sustainable future for your business. So if your business stands to benefit, here’s what you need to know in order to qualify for Small Business Finance, including:
- Providing collateral
- Documents to submit
- Credit checks
Will I need to offer security when applying for Small Business Finance?
Although some products require you to offer collateral in the form of business assets, such as equipment, machinery, vehicles or property, there are plenty of other finance solutions available which require no such commitment. However, although there are a few exceptions, getting accepted for an unsecured agreement can prove challenging. This is especially true if your business has a weak credit score. So whether you run a business that isn’t asset rich or you’d rather not put them at risk, your business could still qualify for a Small Business Finance agreement, allowing you to pursue and achieve each of your long and short-term goals.
What documents will I need to submit with my application?
In addition to deciding whether or not to offer collateral with the agreement, you’ll also need to consider which documents you need to submit, which can vary depending on your chosen finance product. As well as presenting your recent and past bank statements, you may also be asked to show sales reports, annual turnover reports, invoices, appraisal reports, tax returns, Profit and Loss statements to the Standard Industrial Classification (SIC) code for your sector. Therefore, if you’re thinking about applying for Small Business Finance but are unsure of what you’ll need to provide with your application, speaking with a qualified finance professional for assistance can prove invaluable.
Will lenders inspect my business’ credit profile?
Although it isn’t always used against you, lenders will typically ask to review your business’ Credit Profile before deciding whether to offer you an agreement. An important step in the application process, lenders will assess your credit profile and score to determine the risks that may be involved and the likelihood of your business defaulting. So as well as looking at the strength of your credit profile, lenders will also incorporate into their checks whether you have any outstanding CCJs, arrears or Accelerated Payment Notices (APNs), along with your history of settling the debt on time. Although possessing a weak credit score may not always lead to a rejection, it will affect the interest rate that you’re offered for the agreement. As such, the weaker your score the more interest you’ll need pay and vice versa. Plus, if there are any issues that lenders need to be aware, it always pays to be upfront and inform them before they carry out their checks. Should they discover any problems that they weren’t made aware, it may affect the credibility of your application and jeopardize your chances of getting accepted. If you have any concerns regarding your business’ Credit Score, you can read more on the topic here.
Looking to grow your business by applying for Small Business Finance?
Cash is an important resource for any business but, as a developing SME, you might be having to work with a tight budget. However, rather than holding your business back or drawing funds from your own savings, you could explore another path. If you run a small business but lack the necessary to achieve your goals, you could qualify for Small Business Finance. Offering your business access to funds, tools and resources to turn your aspirations into a reality. So whether you’re looking to acquire a cash injection, new equipment or expand into new areas across the UK, apply for Small Business Finance today or find out more with Rangewell.
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