Every week our Managing Director, Mark Smilie sends a letter to our business community. This week, Mark is taking a look at a question he gets asked a lot, “How do I get accepted for a business loan?” Read on now!

“I get asked ‘How do I get accepted for a business loan, at the best rate?’ a lot.

The short answer is “Use a business finance broker”. Statistically you have a better chance at getting a yes from a lender when someone makes the introduction.

However, the long answer is a lot more interesting, so here’s more information about how to understand business loans, lenders and making applications.

The Internet vs Reality

1)

The first and most important thing to remember when starting your search for a business loan is beware the advertisements!

“Rates from 2.9%! All Sectors! All Credit Ratings! Immediate Approval”

What they really mean is “We want as many people to apply as possible, because we know that the ones we want will be in there somewhere!”

Where does that leave you if you aren’t one of the chosen ones? A negative application to your name.

2)

The second thing to remember when applying for finance is that your objective should not be “I need to be chosen”. Rather, it must be “I need to choose carefully”.

This is also how you get the best rate!

When you take the time to do some lender homework with a view to choosing a finance company most likely to accept you, you increase your chances of approval and a better deal, because you will have put yourself in front of a lender who is right for you.

Don’t just rock up to the bank because you know them. There are many, many lenders out there, and one will be good for you.

Going straight to the first with the most enticing ad just increases your chances of being turned down. This decreases your chances of a yes elsewhere.

Be careful of the financial footprints you leave behind!

Remember, to get the best rate for a business loan, you want to try to get it right first time.

3)

Now, you’ve not been blindsided by deals and found a lender who is right for you.

You now face the biggest challenge!

The third thing you have to do is submit an application which proves that you are right for them, and not a risk in any way. By doing this, you will achieve the best interest rate.

These are some of the questions going through an Underwriters mind. A good broker will foresee these questions and have a response prepared.
This can be the difference of an interest being offered at 4.5% as opposed to 9.9%!

• Was the cash flow mis-managed
• A client has left you with a bad debt (and what measures you put in place to stop this happening again)
• You were liquidated in the past
• You are on a HMRC payment plan
• The finance is needed to fund new work, more detail could make a big difference.

Note: Applying for a business loan over the phone or the internet is a bad idea as the person on the end of the line will simply write what you tell them and give you a computer-generated answer.

The key here is to know what might hold you back from the beginning and prepare to present your entire circumstances with consideration to how you are managing your challenges. If a human underwriter sees this before they ask you, immediately you are a better candidate.

Did you know?

Explaining your circumstances at the beginning of the application process can be the difference between your interest rate being as advertised, or being doubled at the end when the underwriter finds out and starts to have concerns. Most people won’t turn back at that stage so will accept what is presented.

On average, 70% of businesses that apply direct are turned down
Whereas 70% that apply through a broker are accepted.

At Ringrose that number is even higher as 84% of the applications we make are approved.

Have you checked out are named testimonials?

We work with you in advance to manage all three of the steps above on your behalf, and we have relationships with the lenders giving you a VIP access.

Imagine walking into a lender almost certain to accept you with an application they can process immediately without hassle.

Our process takes 1-10 days; that’s understanding you, choosing the right type of finance and lender for you, preparing your application, submitting and receiving funds.

Whatever your credit rating, for loans from £20,000 to £4 million, short-, mid- or long-term, we can get you the finance you need. In some cases, you will not even need a personal guarantee.

Please call me if you want to discuss your options and be taken straight into the VIP area instead of the front door with everyone else on 0800 612 5364 or 07710 466166 

Mark Smillie”

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