What does 2015 hold for your small business? Are you itching to expand and diversify, or has 2014 left you wondering where to go next? Are you unsure about what your options are, and whether you really have the knowledge and resources to get to the next level?
Applying for small business finance could help you achieve your business goals, but many businesses remain sceptical about their chances of success.
Here are ten things you probably didn’t know about business finance, proving that the odds aren’t stacked against you when it comes to getting your hands on the help you need.
1. Small businesses are a lot more likely to get finance than they think
Only 44%* of businesses planning to apply for finance are confident that their bank would agree to their request, yet the reality is that more than seven-in-ten (71%) of SME finance applications are successful. Right now across the country, banks are proactively getting in touch with small businesses to let them know that they qualify for a loan. Last quarter, the banks approved £6.6bn of new loans and £1.3bn of new overdrafts.
2. Your business loan could be available within two weeks of applying
Applying for business finance can feel daunting for small business owners. With businesses to run and limited resources, many could be worried that applying for finance will eat up time they simply don’t have. Yet on average some 75% of successful loan and overdraft applicants receive their funds within just 14 days of applying, meaning the whole process can take less than a fortnight – from application to money in the bank. 93% of those who successfully applied also said that the money they asked for was in their account plenty of time before they needed it.
3. If your application for bank finance has been turned down, you can appeal the decision
The process is much easier than you might think and, even if your appeal is unsuccessful, it will have no impact on any future applications for finance you make. If your business has a group turnover of £25 million or less – including if you are a potential start-up – you should be able to appeal your bank’s decision for any reason. It’s easy to kick off your application – find out more here.
4. A business mentor can help
Britain’s largest banks have joined forces to support a network of business mentors across Britain. Mentorsme.co.uk is the UK’s first specialist online portal for businesses looking for mentoring services, so if you need advice about how to increase your chances of business loan success, or just need some general advice, help is at hand.
5. The Finance Finder Tool can help you search for the right provider
Better Business Finance offers a Finance Finder Tool, where you can search through a database of over 500 local finance providers to find the right finance option for you. The tool produces a bespoke list of providers based on your business’ life stage, sector, location, why you need access to finance and how much you’d like to apply for.
6. There are ways to improve your credit score to increase your lending chances
Credit scores can affect your finance application, particularly if you are a start-up and only require a small amount of credit. Because your credit history is so important, the banks have produced a helpful guide suggesting several simple ways in which you can improve your credit score, increasing your chances of success.
7. It’s straightforward to search for and compare business accounts
If you’re a business, club, society or charitable organisation, the Business Account Finder helps you to find up-to date information on the UK banking market.
The Business Account Finder tool makes it easy to identify the right account for your business. It lets you view and compare all kinds of account information, from charges and interest rates to services and introductory offers.
In addition, the Business Banking Insight (BBI) website shares the experiences of real small and medium businesses banking online to provide insight into the best banking institutions, products and services across the UK and help businesses make better informed banking decisions.
8. A clear and comprehensive business plan is the key to success
You can maximise your chances of success, by making sure your business plans and projections are comprehensive and realistic. By demonstrating that you understand your market, your income and your costs, you can dramatically increase your chances of a successful application. If your business has a troubled history, such as bankruptcies or County Court Judgments, the most important thing is to be open about what went wrong and the measures you have in place to improve your record. Find out more about what to include in your business plan here.
9. Free accountancy advice is available
The ICAEW Business Advice Service offers SMEs and start-ups a free initial consultation with an ICAEW Chartered Accountant at more than 3,000 locations around the country.
A chartered accountant can help with you a range of issues from dealing with the taxman or preparing your accounts, to applying for bank loans or creating a robust business plan. ICAEW Chartered Accountants are experts with the knowledge, initiative and judgement you can trust.
10. UK businesses are some of the most likely in Europe to secure finance
According to the European Commission’s data on SME access to finance, British small businesses are more likely to get bank loans and overdrafts than almost three quarters of other European countries. 76% of British businesses say they have successfully applied for a bank loan, compared to 75% of German businesses, 73% of Finnish businesses and 70% of those in Sweden.
Better Business Finance provides impartial information and support to businesses and entrepreneurs looking to develop and grow; whether the business is seeking finance, or starting out or exporting abroad, BBF is here to help. Find out more at www.betterbusinessfinance.co.uk.