This week, our Managing Director Mark Smillie guides us through his 3 steps to get accepted for a business loan. Read on now, and check out if your business can benefit from them!
“Dear Business Community,
Applications for Government Backed Loans are finishing at the end of the month! Even if you have been turned down for a CBILS loan or did not apply for enough money, please call us! Don’t assume you are not eligible until you call us.
How to get accepted for a business loan: 3 steps to success
The short answer to the question ‘How do I get accepted for a business loan?’ 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. Here’s more information about how to understand business loans, lenders and making applications.
The Internet vs Reality
The first and most important thing to remember when starting your search for business loans is that when a lender advertises;
“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? With a negative application to your name. In fact…
70% of businesses who apply direct online are turned down.
The second thing to remember when applying for finance is that your objective should not be “I need to be chosen”, it must be, “I need to choose carefully”.
When you take the time to do some lender homework with a view to choosing one most likely to accept you, you increase your chances of approval as well as 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 one you know increases your chances of being turned down, therefore decreases your chances of a yes elsewhere.
Remember, to get the best rate for a business loan, you want to try to get it right first time.
Now you’ve not been blindsided by deals, and, found a lender who is right for you but it’s not over yet because 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 –
Consider this, could you answer positively if challenged on why,
- Your cash flow was mismanaged
- 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
Most people cannot, equally, many new brokers won’t be able to either.
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 come through a broker are accepted. At Ringrose that number is even higher as 84% of the applications we make are approved.
Why? Well, 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.
You will pay to much if you go to a finance company, that is not looking to lend to your sector at the moment and we can arrange early payment on your uncertified Applications for Payment. CLICK HERE
Please pick up the phone and say hi, you are always welcome to call me on my personal mobile.
The numbers you need: 0800 612 5364 or 07710 466166″