It pays to be honestI can sort of understand why business owners are tempted to gloss over poor data or put a spin on it. But trust us, it is not a good idea. Think it through: If you know you?ve got some poor historical figures or other detrimental data, you probably also know that it?s on record somewhere. If you don?t disclose this and wait for a lender to find out, they will view you as untrustworthy and may decline to lend to you, even if their policies permit it. Applying for finance takes time and energy and there are often admin fees involved up front. If you are squeezed for cash, or are looking to invest in some business equipment you are likely working to a specific timescale. More failed applications means more credit searches on your record, something that can be a red flag to certain lenders. When you add it all up, if a lender isn?t the right fit for your business, wouldn?t it be better to know this up front? Why waste energy and time – often several weeks – with an application process that ultimately will fail. Add to this the fact that there are so many specialist products and lenders out there, surely your energy should be focused on finding the right fit for your business. Examples of some of the specialist lenders who are looking for new clients:
- A boutique SME debt fund that lends on a secured basis. If there isn?t sufficient security available they?ll often consider a small equity investment, which can be bought back at the end of the term;
- A panel of experienced investors looking for exposure to SME debt with a much bigger appetite for risk than your typical high street bank. Their underwriting criteria is much more flexible than you?d think;
- A specialist asset-backed lender who focuses on lending very small amounts to businesses who have had a troubled history;
- An invoice finance provider who only takes on a small number of clients each year, willing to set up flexible arrangements to accommodate seasonality; and
- A pension-led funder who can help you to release the equity from your business?s goodwill and intellectual property, even if all your other business assets are already tied up.
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