5 Alternatives to Bank Loans

With lending from banks falling, especially for SME’s, business owners are always on the look out for alternative funding solutions. If you do fall into this category, this article provides 5 alternatives to bank loans.

Unsecured Loans

For companies that are looking for a quick cash-injection for cash flow, growth, refurbishment or any other business expense, an unsecured loan is a great finance product for your business. With varying rates starting at 6%, and flexible terms from 6-60 months, this product can provide that quick cash-injection your business is looking for. Most, if not all lenders in this market offer funds that are totally unrestricted for any business expense, allowing you to facilitate them future plans you had in mind. If you are looking for a loan between £2,500 – £350,000 at competitive rates this could be the product for you.

Asset Finance

Asset finance works very similar to a mortgage, whereby consideration is needed in terms of an asset. The asset you wish to purchase is used as security, if payments cant be made the asset will be taken away. A good option if you are looking to purchase new equipment and have a business that has good value on their balance sheet, however rates can be very expensive.

PDQ Cash Advance  

This product is made for businesses that are taking most of their income through debit/credit cards. Repayments are made automatically through the PDQ terminals, through an agreed % of future transactions, until the pre-agreed payback has been met. If you are looking for flexibility in terms of a product, you can’t beat the cash advance. Repayments are only made when you make a sale, keeping repayments in-line with growth. Advances can be made from £2,500 – £500,000, and funding can be completed in a few days. If you are looking for a quick cash injection a cash advance is a good option.

Factoring

Factoring is an ideal funding solution if your main income is through invoices. Factoring works by advancing up to 95% of a raised invoice, enabling the customer to get their hands on that capital now, rather than waiting for 30 – 90 days. A great solution if you raise a lot of invoices.

Secured Loans

A secured loan by way of 2nd charge is a great funding solution for clients who cant access traditional funding through their bank, is just about to start a business or a business looking for a larger amount up to £2M. Obviously only homeowners would qualify for this product, and would need to have enough equity left in their house. Terms range from 12 months – 10 years, so if you are looking to spread your payments, this could be the solution you are looking for.

If you would like to explore any of the above finance solutions, please make direct contact, 01371 870815, and a member of our team can advise on the best solution moving forward.