The recent Business Finance Expo, organised by the National Association of Commercial Finance Brokers, had stands manned by about 80 different lenders; yet four of the high street banks weren’t even there!  So what is going on and why are smaller businesses still finding it hard to get a loan?

The fact is that most owner managed businesses looking for cash turn first of all to their own bank.  Once they are declined most of them give up looking to formal lenders and instead turn to family, friends and credit cards.  Family and friends can be fine, until their circumstances change and they need their money back (and I deal with several of these each year).

Few business owners do what they should, which is to see if the rest of the market can provide the answer.  This is understandable when you have 80 lenders to go at, from Affirmative Finance to Yes Growth passing such well known names as Iwoca and Secure Trust as you go; and that’s only at the Expo, the tip of the iceberg.  At this point you realise you need someone to do the legwork for you, a broker, or more exactly an NACFB broker.

My speciality is property finance of all types and going concern business finance.  Where we need to use asset finance I work with other brokers who specialise in that field: with working capital finance it depends what is required as to whether or not I handle it myself.

One of the challenges facing the researcher of these alternative sources of finance is that many of their product offerings seem much the same and most lenders want their cash back relatively quickly.  So maybe the traditional high street banks do actually hold a better hand of cards, in which case the broker’s job is to get a bank to play them.

The first and biggest hurdle to local businesses finding cash starts in the owner’s mind “If anyone can provide finance my bank will.”  It is exacerbated by the bank’s “Sorry we can’t help……. so goodbye.”  Despite Government assurances, little is being done by the banks to refer customers they can’t help to relevant alternative sources.  Some are suggesting their customer goes to another particular lender but rarely is this the best answer.  The NACFB has a website supported by over a hundred lenders, which not only opens the door to so many relevant lenders but does it through the guidance of the closest, specialist broker.

Not every business owner will obtain the finance he or she wants but there are quick and efficient ways of finding out just what the lending market can provide.