Jo Why Lee

London - United Kingdom

    Tips for securing a business loan today

    May 27, 2015

    For a new company or any business looking to move to a new stage of development, the importance of securing a business loan cannot be overemphasised. However, the business loans market has changed a great deal over the past few years. Banks, which were once the main players in this market have almost completely disappeared with alternative funding options emerging to meet the needs of the businesses.  We take a look at what you need to keep in mind as you seek for a business loan in the current market.

    Ignore headlines

    Lenders of today know there is a strong demand for the credit facilities they have to offer so they do all they can to attract as many businesses as possible. This is why it is important for businesses to avoid getting attracted to any particular lender solely due to low interest rates. These rates may be eye-catching but in many cases they do not tell the complete story.

    Look at all available options

    Experts like Mukesh Valabhji say businesses looking for loans should not only focus on banks and finance groups that were lending powerhouses in the past. Instead, they should take a look at all the lending options that are available today. The decline in the number of mainstream banks offering business loans may have made things difficult for others still looking at banks for their loan funding needs but the good news is that the alternative lenders of today offer more specialised services.

    Get the right advice

    There are instances where it is good for businesses to act alone and rely on in-house management skills. Securing a business loan should never be one of these cases. Getting the right business loan advice could be the difference between a successful loan application that offers most of the things you need and an unsuccessful one.

    Be straightforward with all potential lenders

    Hiding the truth about the financial history of your organisation during the loan application process is bad idea as there is nothing to gain. Business credit reports are supposed to ensure that key facts about your business are available on demand so covering any issues or lying about it must not be considered at all. Being honest with lenders increases your chances of getting funding and reduces the chances of contentious issues arising in the future should you need an extension on loan repayment date.

    Take advantage of your current assets

    To free up funds for investments, it can be beneficial to take advantage of existing assets without taking any undue risks. Invoices are one of the key asset classes that are generally overlooked in this regard. Invoices can be sold well before they are settled by customers. Invoice discounting and factoring is growing however and they offer small companies a quality route to finance when cash flow issues are in danger of becoming critical concerns.

    With these tips, it is easier to get businesses loans in the dynamic loan market of today. 

    Read Jo's other blog entries >

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