5 things to know if you’re considering a loan

Matt Barton, Head of UK Sales at Funding Circle, gives an overview of the trends we’re seeing in business finance and what you need to know for the months ahead.

Businesses are taking finance to grow

During the pandemic we saw a lot of businesses look to online providers for the first time, with searches for ‘online business loans’ growing by 500% compared to 2019. 

A lot of businesses were either borrowing to help them through the unpredictable periods, or to give themselves a cash flow buffer just in case they needed it down the line. However, in recent months, more and more businesses are looking to fund growth opportunities. They may be hiring to meet demand, funding a new project, or investing in stock and inventory. Overall there is a really positive mindset in the businesses we’re speaking to.

The Government’s loan scheme is not just for businesses in trouble

Due to the name, a lot of people think the Recovery Loan Scheme is only available for struggling businesses, but it can be used for a wide variety of reasons including growth and business investment.

The scheme is designed to help lenders say yes to more businesses, so if you’re considering your finance options, applying before the deadline could give you a better chance of being approved. 

Although every scheme has some eligibility criteria, Government-backed Recovery loans are aimed at supporting a broad range of businesses. So whether you’ve been on the up or trying to get by, you could still benefit from the scheme.

You don’t need to wait for the new year

A lot of business owners think it takes months to get finance, so put off applying until January, so the start of the year is one of our busiest times. However, with us you can complete the whole process in a few days, so you can have the funds in your account before Christmas ready to get cracking in the new year. 

Check your credit file before applying

Your credit report will be checked when you apply for a loan, so get a copy of your report and make sure it’s accurate. We use reports from Experian and TransUnion. If you have outstanding debts that can be settled, doing so before you apply could help your application. Healthy cash flow is also beneficial, so consider calling in any due payments too. 

Think about both short and long term needs

Many businesses borrow for a specific or immediate need, like short term cash flow or fulfilling a new project. However, finance can also be used to free up time in your business or give you more flexibility. A working capital buffer can mean less pressure on chasing invoices, while consolidating debt can mean you only have to worry about one simple monthly repayment. Think about your cash flow strategy and where funding could make a difference. 

To see how we could help you with finance, check your eligibility for a loan in 30 seconds.

While we want to help as much as we can, the information found here is provided solely for informational purposes and should not be considered financial or legal advice. To the extent permitted by law, Funding Circle does not accept any liability for any loss or damage which may arise directly or indirectly from the use of, or reliance on, the information contained here. If you have any questions, please speak to your professional adviser or seek independent legal advice.

If we can offer you a loan on similar or better terms without RLS, we will do so.