What options does your business have if Declined a Bounce Back Loan?
To begin with we all know that the last few months have been tough for many industries. Even businesses who have been able to trade through lockdowns have found it difficult.
As time has gone by the pandemic has placed a reliance on obtaining external funding. For many businesses borrowing to survive was the last thing they would consider.
Without a doubt this has resulted in many Businesses taking advantage of the Bounce Back Loan scheme which has been a lifeline for most.
In some cases this lifeline is now running out with statistics showing that 85% of businesses have used their BBL and now seek more funding.
On the other hand around 15% of businesses have not been able to obtain a BBL and need to seek other alternatives.
Alternative Solutions
Secured Business Loan – This is where your loan is secured against something in case the loan is not paid. This type of loan is secured primarily against business assets such as property, equipment, stock etc. In some case a Director / Owner can offer their own home as security if there is sufficient equity to be released.
These type of loan generally allow you to borrow larger amounts of money, but it is worth considering that whatever you put up for security will be lost if you don’t keep up your repayments.
Unsecured Business Loan – Unlike the above loan this is where your loan is not secured against any type of asset. The loan is unsecured but the amount you can borrow and the interest rate you pay back will depend on your credit score and the creditworthiness of your business.
Invoice Finance – If you have cash tied up in Invoices then you can look to release the funding from these. This can be done on a “Pay as you Go” or “Contract” basis. It is expected that this will be the most popular alternative to a declined BBL as lenders have already assessed the suitability for a loan and have turned this down.
Asset Finance – While many businesses own assets outright not many know you can look to refinance these. This can be done to release additional funds into the business. Again this will be a popular solution to lenders as they will be willing to lend against a confirmed asset
Talk to the specialists.
Without a doubt speaking to a specialist Business Finance brokerage would be beneficial for many business owners. Especially as lenders are seen to be changing their lending criteria on a daily basis. Lenders are reacting to the pandemic and government advice which can be confusing for the borrower.
We can help offer FREE advice and FREE processing of any type of application. There is no one size fits all solution and many businesses have different needs and requirements. We can help guide you through the many different options.
Please click below or call 0161 8211478 to speak with one of our specialists.
Finally as members of the Financial Conduct Authority you can be assured of a great service.
Some of our specialist areas of Finance are:
- Asset Based Lending
- Asset Finance
- Business Loans
- Cashflow Finance
- Factoring
- Invoice Discounting
- Single Invoice Finance
- Trade Finance
- Stock Finance
- Credit Insurance
