A small business might look for a business loan when it needs extra cash to grow, cover slow seasons, buy equipment, or grab a great opportunity. It’s also helpful for managing unexpected expenses, hiring staff, or consolidating debt—basically, whenever a little financial boost can keep things running smoothly.
So, we started our business, put in our own cash, got clients, created a successful small business and now we want to grow!
For this growth we may want/need to:
- Employ staff
- Buy equipment
- Move premises
- Improve cashflow
- Purchase stock
At some stage there must come a time when we stop bootstrapping (putting our own cash into the business) and enter the arena of applying for a business loan!
Simple isn’t it!
Is it always that simple to apply for a business loan?
I am sure many of us in the early days of setting up our companies have tried to gain funding from lenders and been disappointed!
Our applications are turned down because:
- “It literally comes down to affordability”
- “The accounts do not stack up to our lending criteria”
- “Apply again in 6 months”
Maybe this is just another hangover from the pandemic and the debacle of the Bounce Back Loans and the like.
So, if refused what options do we have?
It is recommended that some sort of credit history is created to improve the standing of the business.
Some of the ways we could achieve this which MAY help any future funding requests are:
Company Credit Cards
Applying for a company credit card online has become relatively easy. Of course, acceptance is not guaranteed and comes down to credit history etc.., but applying for a company credit card does seem a first step in building up a history as a borrower.
It goes without saying any borrowing must be affordable to the business, it is no good acquiring a card to default and build up a poor credit rating.
A good way to start would be to pay back the full amount borrowed the following month, which can be set up in the application. So basically, we are receiving funds for one month and then paying it back. Some lenders even offer incentive schemes such as cashback, and the much-revered AMEX scheme if you are a frequent traveller.
Go online and check out the deals that are on offer.
Short Term Business Loans
Short Term Business Loans are becoming more popular nowadays.
As its name suggests, these loans are offered on 12 to 18 months terms (other terms may apply)
These however do seem to come with higher interest rates than the more traditional longer-term loans, so it best to be mindful of affordability again, as you are spreading the repayments over a much shorter period.
Online there is a abundance of specialist companies who offer these services, and their application process is very streamlined. If the application is accepted the funds can be in your account within hours!
These are just a couple of examples of ways which may help in the future to secure funding.
Following the pandemic, we at Tandem Business Solutions discovered that there was a necessity for ethical lending, so we partnered with Portman Finance, in whom we trust will deliver the best outcome for any clients we refer.
How can Tandem help with your funding questions?
If you would like to find out more on how we can assist you in applying for funding, please click on the button at the top of the website to Book a Discovery Call.