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Is it hard to get a small business loan?

Published on 31st May 2019

Being small doesn’t mean you can’t achieve big things. But, it could be an issue if you’re looking for business finance. As a small business owner, convincing financial institutions to offer you funding is no easy feat, and rejection can leave you demoralised and frustrated. So why not save yourself time and take another route? By choosing to explore the Alternative Finance industry, you could support your goals with a range of Small Business Loans. However, the question remains, just how hard is it to get a Small Business Loan?

Why should I choose to get a Small Business Loan?

Giving your business the support it needs is vital, regardless of where you’re at in your development. But being a small business, you’re likely at a make or break situation. So in order to give your business the strength and confidence it needs to pursue key objectives, ensuring that you have access to sufficient amounts of capital is arguably your most important responsibility. That’s why more and more business owners are choosing to get a Small Business Loan and support everything from cash flow, corporation tax, late payments, inventory and staff wages to emergency situations. Therefore, choosing to get a Small Business Loan grants you the ability to safeguard your success and reach new heights - providing you’re aware of what’s on offer.

Looking for a way to raise capital for your small business? Need help source a suitable finance solution? Apply for a Small Business Loan or learn more about how your business could benefit.

What Small Business Loans are available?

Small business owners often have a hard time when it comes to funding, especially when they possess a limiting trading history and an unproven business model. However, there are plenty of finance solutions available that are designed with these challenges in mind, you just need to know what they are. Small Business Loans come in a variety of forms, giving a number of different ways to raise the funds your business needs to grow and stay strong, including Merchant Cash Advance, Invoice Factoring, Overdraft Replacement, Peer-to-Peer Lending and Asset Refinance. But in order to take the first step towards getting a Small Business Loan, you need to understand how these products work, which is where speaking with qualified business finance professionals could prove invaluable.

How is it hard to get a Small Business Loan?

Deciding to explore what the UK lending industry has to offer can be a daunting task, even for experienced business owners. But if you’re able to appreciate what lenders are looking for and understand how your business can meet their requirements, getting a Small Business Loan needn’t be as hard as it may seem. Small Business Loans have been designed to ease the pressures that small business owners often face, with each product working differently to support those challenges. So as well as deciding which product is suitable for your business’ needs, you must also take into account that lenders will incorporate factors such as:

  • Business Plan - A detailed business plan can go a long way in getting your application approved. What lenders want to see is a step-by-step rundown of what your goals involve, how much money is needed and how their funds will be applied. If you provide this, they’ll feel more confident in lending you their capital, knowing it’s being placed in competent hands.
  • Creditworthiness - Depending on your chosen product, lenders won’t always use adverse credit as a reason to reject your application, though it will affect how much interest you’re charged. So if there are any issues affecting your credit rating such as CCJs, Accelerated Payment Notices, unpaid debt or missed payments, try to resolve them first.
  • Collateral - Small Business Loans can be either Secured or Unsecured. But if you’re able to present collateral (unencumbered equipment, machinery, vehicles or capital) as part of a Secured agreement, it could reassure lenders and may earn you a favourable interest rate. Just remember that your asset will be at risk of repossession should your business default.
  • Revenue - Some products can be arranged solely in accordance with your revenue, such as past card-based revenue or business-to-business (B2B) invoices. After all, cashflow could be the reason why you’re looking for a Small Business Loan. But if you can show that your business has the ability to generate a reliable revenue, this can show that the agreement is affordable and within your means.
  • Experience - Finally, if you have you have past experience in the sector that you’re currently operating in, raising this with lenders can also boost their confidence in your ability to achieve your goals and overcome the challenges that may arise.

Thinking about applying for a Small Business Loan?

Getting a Small Business Loan isn’t as hard as it may seem. Of course, there are hurdles to overcome, but the key to applying for any business finance solution has always been making sure that you’re well prepared. Small Business Loans are available in a variety of different of forms, but if you’re able to understand how each product works, you’ll be in a stronger position to source a suitable finance agreement and meet lender expectations. Though this can be an obstacle in itself, that’s where we can help.

At Rangewell, we’re an Access to Finance specialist who’s mapped over 400 lenders to offer you an overview of more than 23,000 business finance products. Our services are free to use and we’ll also guide you through the entire application process. So if you’re a small business owner looking to raise capital, apply for a Small Business Loan today or find out more with Rangewell.


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David Harrison

David Harrison

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