Hurdles To Overcome If You Need Finance For Your Business

Below we discuss just some of the hurdles that may get in the way of you obtaining business finance.

Time

If you are a small business owner then your time is often taken up with the day to day running of it. You may spend time on the phone to potential customers trying to obtain work and then actually do the work to generate much needed income. Having completed the job then you may have to spend time chasing up your customers who are late paying. These things alone are a potential burden when it comes to trying to arrange business finance as these activities could get in the way of you having the time to arrange such finance.

Security

Depending upon a number of factors, such as the amount you wish to borrow, the lender may require some form of security to provide them with peace of mind that, should you default on the borrowing, they can realise the security to clear the outstanding liability. A lender will often require deed security such as a mortgage over the business premises or say a second charge over your residential property. If you do not own either your own home or your business premises this may make it more difficult to obtain finance.

Self employed

By the very fact that you are self employed could make it harder to obtain finance for your business. This is especially the case if you are just setting up in business for the first time as lenders do like the peace of mind of lending to self employed individuals who have been trading for many years and can produce several years sets of audited accounts to prove that he or she is running a successful business.

Credit Rating

When considering a request for business finance one of the things that lenders take into account is your and your business’s credit rating. If you have a poor credit history perhaps due to having a county court judgment (CCJ), defaulted on one or more liabilities or are behind with paying your credit card then it could be more difficult to obtain business finance. There are some lenders that will consider applications for business finance from people with a bad credit rating but if funding is available the interest rate charged by the lender is often above what somebody with a good credit history would pay. This higher rate is to reflect the increased risk to the lender and results in the borrower having to pay more back in interest repayments over the term of the borrowing.

What could you do?

So, if you are looking for business finance, an option is to contact us here at Commercial Mortgage Link and we can put you in touch with an experienced broker who will discuss your requirements and do all that he or she can to try to help you source suitable finance from their extensive panel of lenders.

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