SME Loans

At every stage of an SME life cycle there is pressure to maintain strong levels of working capital. Whether you need to invest in new services, develop new products, hire staff or expand into larger premises, accessing an SME loan could provide the funds you require. Finding the ideal SME loan is often the most important step in accessing the potential opportunities your business needs to grow.

We know how important it is for businesses at every stage to be able to access finance when they need it, which is why our lenders include traditional high street banks, alternative lenders, and online banks. Through these lenders we can offer your business an SME bank loan from £1,000 to £20,000,000, with short repayment terms of less than a year through to longer periods of several years.

Unsecured SME loans

The most traditional form of SME lending is an unsecured SME bank business loan, although for larger amounts with longer repayment periods, most companies will opt for secured loans. These types of loans are commonly available from banks and other traditional lenders and will usually require a strong financial history. The SME business loan will generally provide low fixed interest rates, with repayments set at equal amounts which are repaid each month for a set period of time.

Credit cards and overdrafts

Common alternatives to traditional SME loans are credit cards and overdrafts, which provide access to a fixed amount, with repayments based on the amount of credit you spend. You will be charged an annual fee, with repayments for the credit taken each month. There are some credit cards and overdrafts available which offer interest free periods, which could provide you with a low-cost form of borrowing.

A similar option to a credit card and overdraft is a flexible line of credit, which provides your business with a credit limit which can be drawn upon when required. The loan can be flexibly repaid in the same way as an overdraft and credit card, making it ideal for businesses who are just starting out, or those who have been trading for a longer period. The costs of a line of credit can vary significantly depending on your financial situation, with some businesses required to provide security.

Invoice finance

Another alternative to a traditional SME loan is invoice finance, which could unlock the funds you are already owed. This form of lending is ideal for fast growing businesses which are looking to unlock the capital in their increasing turnover. This is a popular option for businesses who may not have a strong financial record but have a high level of income owed. The lender essentially purchases the invoice from you, releases a percentage of the funds and is repaid when the invoice is paid. There are two types of invoice financing, factoring and discounting, with the main difference being who is responsible for collecting the invoice amount.

Merchant cash advance

If your business processes a large amount of PDQ payments, you may be eligible for a merchant cash advance. The lender will provide you with an SME loan in the form of an advance on PDQ payments, which you are likely to receive. The repayments will be taken gradually as you receive payments from your customers, making this form of loan an ideal way to manage cash flow. The amount available will usually depend on the level of monthly PDQ sales which your business receives. The interest rates tend to be higher than traditional SME loans, so a merchant cash advance is not an ideal long-term financing solution.