Getting a business loan
posted by: Jason Hulott
Getting a business loan was traditionally a simple question of approaching your local bank manager for the necessary funds. The financial crisis of 2008 not only exposed some of the flaws in the banking system but also made banks considerably more wary of lending to small and medium-sized businesses (SMEs).
That wariness continues some ten years later. A story in the Financial Times on the 30th of March 2018, for example, evidence given by the SME Alliance to members of parliament that banks are still “reluctant to lend” to businesses.
Even though your application for a bank loan may come with demands for exhaustive details about your company, a comprehensive business plan, or even the security against company assets (which remain at risk if scheduled repayments are not met), your request for funding might still be declined – and that after a lengthy wait.
Reluctance on the part of banks to lend does nothing to lessen the needs of SMEs to borrow – supplies, materials, equipment and IT systems still need to be purchased, cashflow needs to be managed, working capital might need topping up, and ongoing tax liabilities still need to be met.
An alternative to bank loans
Here at Cubefunder, we recognise the general reluctance of banks to lend to many businesses – we are entrepreneurs ourselves, after all.
We are familiar with the difficulties created when cashflow is tight and know that more or less immediate access to external funding may be needed from time to time – without the need for the presentation of a detailed business case or putting company assets at risk in order to secure a loan.
Our focus, therefore, is on matching a repayment schedule to your immediate cashflow circumstances by providing unsecured business loans, at a fixed rate, over a relatively short term of up to 12 months – thus avoiding the accumulation of onerous interest charges.
Some alternatives to the standard bank loan might involve a third party attempting to match several willing lenders to pool their funds for those wanting to borrow – by way of so-called peer to peer lending. Others might involve your “sale” of your projected debit and credit card sales by providers of merchant cash advances.
We are different. At Cubefunder, the money we lend is our own – we are what is technically known as a balance sheet lender. We identify with and share your own goals and aspirations as a successful business and, through our relationship with you, develop the confidence required when our own funds are at stake.
It is a confidence which inspires flexibility in the management of any loan you arrange through us. For example, we recognise that there may be times when immediate cashflow difficulties might make through up problems in keeping to your repayment schedule. Provided you keep us fully in the picture about such difficulties – and of course, let us know if there is any change in your business circumstances – we are flexible enough to reschedule your repayments without typically imposing any finance penalty. If you originally agreed a six-month repayment schedule, for example, this might be extended to seven months without your incurring any further cost.