The Business Banking Sector
Growing a business requires investment and, for most small business owners, getting a loan will be essential. In the past, small businesses would go to their local bank to secure financing to navigate applying for a business loan.
Times have changed.
As the economy is beginning to pick up, the relationship between small businesses and traditional lenders, big banks have changed considerably. These days, banks won't often lend to small businesses as they used to, which has left many business owners wondering how to get the capital they need to keep their doors open and their business growing.
Want to find an alternative to traditional bank loans? Speak to Rangewell today, we can source a range of short-term loans to suit your business needs. We can help even if you have bad credit.
What alternative bank loan providers are available?
There are many business lenders who can adopt a more flexible approach to lending. These include newcomer banks, as well as specialist lenders who work mainly online, and even peer-to-peer lenders.
Challenger banks may be more flexible than the established high street banks. They may have simpler application requirements with reduced paperwork and are usually able to move more quickly on making a decision.
Peer to Peer (P2P)
Peer to Peer - or P2P lending - can provide businesses lending through online services that match lenders with borrowers. These may offer competitive unsecured loans, but the process can be long and complicated, and an application may simply not attract investors.
Online lenders can make decisions much faster. Some will allow you to support your application by uploading documents electronically, and by allowing access to online records. Some are able to put funds in your business bank account on the same day that you apply.
Specialised lenders can provide loans to businesses that might not meet the criteria of mainstream business lenders. If you are a start-up with no business history, have an adverse credit record or work in a sector with unusual funding needs, a specialist lender may be able to provide a solution.
Other alternatives to bank loans, including invoice financing, merchant cash advance and inventory finance, can also provide alternative methods of raising cash for your business.
What alternative loan options are available?
There are ways to get the money you need to build your small business without jumping through hoops.
1. Crowdfunding Platforms
Over the past few years, crowdfunding has become incredibly popular and one of the most attractive ways of raising money. To access crowdfunding, the entrepreneur will post their project on platforms such as Kickstarter. Then, people worldwide can support it by making donations in exchange for a perk from the business owner.
2. Merchant Cash Advances
With this type of loan, you'll receive a lump sum of money and then repay that amount plus any additional fees, usually over a few months. There is no set monthly payment, interest fees of the due date. Instead, you'll pay a small percentage of your daily debit and credit card revenue.
3. Micro Loans
Microloans are small loans given to entrepreneurs to help get their business off the ground. Microloans are usually for small amounts, and they aren't usually based on credit rating or collateral.
Microloans are often designed for women, minorities and low income or young entrepreneurs. The process usually involves business coaching to help improve chances of success.
Want to learn more about business financing options? Speak to Rangewell today we can help where a traditional business loan cant.
Who can apply for an alternative business bank loan?
Our alternative business loans and merchant cash advances are perfect for a range of business types looking for a bank loan alternative. Providing you've been trading for over 6 months and have a turnover of more than £60,000 - you're likely to be accepted.
What are the criteria for applying for an alternative business bank loan?
When it comes to applying for a business loan, it is better to apply for one before you need it. There are some documentation you can prepare beforehand. Company owners cannot meet loan requirements when they need cash because they haven't prepared.
You should assemble the documents and other information to qualify for a business loan.
- Credit score: Many lenders believe that the past will reflect what will happen in the future. They'll rely on business credit scores to get this information. The lower your credit score, the higher the perceived risk.
- Annual revenue: Make sure you have accurate financial statements from the past two years. Any lenders will ask for copies of your bank account transactions, so make sure these are reflected accurately in your statements.
- Updated business plan: Lenders will want to know how the loan will be used and how the company plans of growing. Be ready to share an up to date copy of your business plan, which will include projected financial statements and a plan for how to pay the money back.
- Additional collateral: Every lender will want to reduce their risk when making a loan. They can do this by getting additional finance collateral that will secure the loan in case your business fails to meet repayments.
What are the benefits of alternative business bank loans?
Here is an overview of just some advantages of alternative business finance
- Can help manage cash flow - most businesses will experience a cash flow shortage especially when they need to buy expensive equipment. More traditional forms of lending won't allow you to respond in an agile way to mee the peaks and troughs of cash flow. alternative business loans can
- They have flexible criteria - the range of options available means that businesses can approach lenders without traditional asset-based backing, and they'll still come away with the funding they need to grow.
- Cost-effective management - alternative finance providers have a more comprehensive range of deals on offer. It gives the SME the ability to choose a pricing model that is suited to their needs.
We can offer financial products at a competitive rate, we've helped many loyal customers business owners grow their businesses.
Why you need Rangewell to arrange an alternative business loan
The new alternatives to bank lenders can mean more ways for your business to get the funding it needs, but the additional choice means that you need expert help and support to get the funding that's really right for you.
Not all types of lending may be suitable for all business purposes. Some lenders specialise in providing loans to individual business sectors.
Finding both the right type of loan and the right lender are essential to secure the funding you need at the most competitive price.
At Rangewell, we can provide the expert help you need. We have mapped the entire UK lending market, and have excellent relationships with all the providers of commercial lending. We can help you select the most suitable provider for your business and your financial circumstances.
Our expertise works to give you an important advantage. Because we can compare all the various providers, we can help you find the most appropriate type of funding and the most competitive deal. If your need is urgent we can help you find a lender who can provide funds quickly - and if you have circumstances that might affect a lender’s decision, such as adverse credit history - we can find the lenders who may be able to take a flexible view. So whether you're looking for new business loans, short-term finance, unsecured finance or any other type of funding for your business, contact us today. We can get access to the cash you need and can arrange repayment terms to suit your needs.