All The Latest UK Business & Personal Finance News, Articles & Information
Welcome to the business and personal finance hub.
Here you will find all kinds of articles and industry news on a wide variety of topics in the business and personal finance sector including:
Here you will find all kinds of articles and industry news on a wide variety of topics in the business and personal finance sector including:
- Business Loans
- Merchant/Business Cash Advance
- Business Finance Including Working Capital
- Retirement Planning Including Annuities & Pensions
- Personal Finance Including Mortgages, Debt & Investing
Small Businesses Still Bearing The Brunt
According to The Federation of Small Businesses, otherwise known as the FSB, small businesses in Britain are still bearing the brunt at the hands of banks as they are still unable to obtain finance.
The independent study revealed that small businesses that have up to nine employees are the most likely out of any sized business to be refused their credit applications. This differs from larger businesses that now have high approval rates for finance. Even with a second or third application for finance with lower finance sums requested, the approval rate is not much higher.
Moreover, of those surveyed it appears that over half of the companies said they did not even bother to apply for a loan at all, due to their expectations that they would be turned down altogether.
The reasons for not applying included that the application process was too much hassle and would be too expensive.
The National Chairman of the FSB commented on the situation, "These figures tell us what we already knew: the very smallest businesses are the ones bearing the brunt of a contraction in bank lending. Small firms have been telling us for the past few years that they are fearful of approaching the banks for new finance, or to extend an overdraft, because they know they are likely to be turned down, or be offered a deal on terms that just aren't favourable for them….The picture that emerges from this independent research shows that the smallest SMEs are losing out – with a third being refused outright when initially applying for new finance. This figure is more than double the bigger SMEs being refused. So the big question is why medium sized companies are getting a better deal.”
Whilst banks are being blamed for the difficulty small businesses are having with raising business finance, there are other ways in which some smaller businesses are borrowing.
A merchant cash advance is an alternative lending method that many people use instead of short term business loans which essentially advances the cash to the business which it is yet to earn. This is paid back flexibly and regularly with a fixed percentage of credit card transactions which the business processes. This quick and easy method differs to traditional lending because there are no fixed monthly payments, late repayment fees or overdue charges, and the advance can be used to finance value business or marketing plans.
If you business processes more than £3500 per month in card payments then you could be eligible and could raise up to £150,000 for any purpose. A friend of mine owns a pub and wanted to get a refurbishment but was turned down when he applied for numerous pub loans. He got a merchant cash advance, refurbished the pub and now business has increased and he paid the advance back faster than he expected.
The independent study revealed that small businesses that have up to nine employees are the most likely out of any sized business to be refused their credit applications. This differs from larger businesses that now have high approval rates for finance. Even with a second or third application for finance with lower finance sums requested, the approval rate is not much higher.
Moreover, of those surveyed it appears that over half of the companies said they did not even bother to apply for a loan at all, due to their expectations that they would be turned down altogether.
The reasons for not applying included that the application process was too much hassle and would be too expensive.
The National Chairman of the FSB commented on the situation, "These figures tell us what we already knew: the very smallest businesses are the ones bearing the brunt of a contraction in bank lending. Small firms have been telling us for the past few years that they are fearful of approaching the banks for new finance, or to extend an overdraft, because they know they are likely to be turned down, or be offered a deal on terms that just aren't favourable for them….The picture that emerges from this independent research shows that the smallest SMEs are losing out – with a third being refused outright when initially applying for new finance. This figure is more than double the bigger SMEs being refused. So the big question is why medium sized companies are getting a better deal.”
Whilst banks are being blamed for the difficulty small businesses are having with raising business finance, there are other ways in which some smaller businesses are borrowing.
A merchant cash advance is an alternative lending method that many people use instead of short term business loans which essentially advances the cash to the business which it is yet to earn. This is paid back flexibly and regularly with a fixed percentage of credit card transactions which the business processes. This quick and easy method differs to traditional lending because there are no fixed monthly payments, late repayment fees or overdue charges, and the advance can be used to finance value business or marketing plans.
If you business processes more than £3500 per month in card payments then you could be eligible and could raise up to £150,000 for any purpose. A friend of mine owns a pub and wanted to get a refurbishment but was turned down when he applied for numerous pub loans. He got a merchant cash advance, refurbished the pub and now business has increased and he paid the advance back faster than he expected.