For a lot of things, a ‘trusty’ internet search can guide you to the answer you’re looking for; and it would be fair to say you wouldn’t be wrong if you did the same when searching for the answer “how to access business finance?”. There’s a stream of websites, Government grants and guides offering support and advice to businesses on that very subject. So, it’s simple enough, right?
Well, not exactly. Research shared by the Commercial Reporter [1], stated that half of British business owners are unaware of the best funding route for their business; whilst 61% did not know how to access funding beyond traditional banks.
However, the landscape of High Street banks has changed significantly over the years. Where they were once a ‘one stop shop’ for all things finance, following the 2008 financial crisis, a more stringent approach needed to be taken, resulting in more tentative lending.
Pair this with the introduction of technology within the finance market, the rise of the challenger bank was imminent. In fact, the last decade has seen challenger bank lending increase year on year, according to research carried out by accountancy and business advisory firm, BDO LLP [2].
So why aren’t more people aware of funding beyond traditional approaches? This forms a prominent question when you consider Challenger Banks and Specialist Lenders also play such an important part in supporting businesses, particularly in the SME market. Before, where some may have felt it was a challenge to find the right finance, the increase in alternative finance providers has offered greater competition, opportunities, and flexibility for many people and businesses.
This is not to say lenders are guaranteed to accept an application, but it does provide another path, and one that many businesses may want to be explore. From those who are new to the buy-to-let market to portfolio landlords trying to get the highest loan to value or best rates – there is lots to explore, particularly, if your circumstances or requirements fit outside High Street banks criteria and appetite.
This is where the benefits of utilising a Commercial Finance Broker can really show. Having a broker as an intrinsic part of your business, enables you to tap into their knowledge and experience of the funding market. An invaluable asset considering the abundance of lenders in the market – so knowing which doors to knock on can most definitely be the helping hand many businesses may need.
[1] JONES (2022) Half of British business owners ‘unsure’ about how to access business finance. Commercial Reporter. Available from: https://www.commercialreporter.co.uk/commercial-news/half-of-british-business-owners-unsure-about-how-to-access-business-finance.html [Accessed: 14/10/2022].
[2] BDO LLP (2021) Challenger bank lending jumps by more than £14bn to record £143bn during Covid. Available from: https://www.bdo.co.uk/en-gb/news/2021/challenger-bank-lending-jumps-by-more-than-14bn-to-record-143bn-during-covid [Accessed: 14/10/2022].