SME loans

There can be many reasons as to why you may need an SME loan. It could be that perhaps you are looking to launch a startup, maybe it is for investing in the growth of your company, a new contract your business has just napped, or maybe you have unfortunately come across an unexpected business cost that has created difficulty. Whatever the reason may be, Proper Finance has got you covered. We have a number of financial products available that can be tailored to your individual SME needs. We understand that trying to find the right SME loan isn’t always the easiest of tasks, with so many loans on the market it can be difficult to know where to begin. However, we have simplified the task for you in this easy-to-read guide below.

Secured loans for SMEs

One of the options you could consider is getting a short-term loan to help your business get back up and running. Whilst secured loans typically refer to having a house or vehicle as security, as a business, you could put your assets as security instead to get the loan. This could include the company inventory, vehicles, stock, equipment or types of machinery.

A secured loan for a small business is best for those who are already established and have assets to put as security – as a startup, this may prove difficult. Furthermore, you may not necessarily want to put your assets as security if you do have them, as it is important to remember that if you are unable to keep up with the loan repayments, the lender has the right to sell your assets in order to recuperate the money they have lost.

If you choose to opt for a secured loan for your SME, Proper Finance can help you find the right product. We are a comparison site working with some of the leading lenders in the secured loan industry and can help to take away the hassle of finding the right one on your behalf.

Unsecured business loans

Worried you won’t be able to access a business loan because you don’t have security to back it up against, or don’t want to? No problem! You still definitely have plenty of options. You could look at getting for your company an unsecured business loan instead.

You could opt for a secured or unsecured loan for your SME.

Instead of your eligibility being based on the assets you have secured the loan against, with an unsecured loan it is your personal and business profile which will be more important. This is because a lender will need to be sure that you would be able to afford repayments if they granted you a loan. A lender may take into consideration the following factors:

• Forecasts for your company
• Business plans
• Your current clients or customers
• Trading history of your firm
• Turnover of your business
• Revenue of the company
• Profitability of your firm. The lender will want to be seeing healthy profit margins in your company

What are the standard criteria for SME loans?

When it comes to financing for SMEs, there are no set criteria, as the critical factors that the lenders that Proper Finance works with will vary from each company. However, there will be a few basic factors that lenders will be assessing when looking to grant or decline you a loan, whether it is secured or unsecured in nature.

• Recent bank statements and last set of filed accounts. You should be ready to provide at least 3-6 months of bank statements
• Loan amount versus the turnover of your firm. You will find that usually a ratio of 1:1 is the standard maximum. What this means is that you are not usually able to borrow more than one months of turnover without providing security to the lender.
• Trading history. Past performance is important to lenders, though we understand that if you are a new business that has been trading for just a matter of months this can be difficult to prove, and therefore other factors will usually be considered too
• Your payment history. This specifically refers to late payments, any outstanding finance you may have, or if you’ve ever had County Court Judgements made against you. Even if you have had these, don’t lie about them. There are still options available to you! Hiding any past difficulties that your business has had will only cause you problems in the future, and could make it more difficult for you to be able to access credit in the long-term.

Want to apply for an SME loan?

Looking to apply today for an SME loan? Proper Finance can help you, all you need to do is click apply now on our site and fill in an application form. We are FCA authorised, and all information is stored safely via a secure server. The process of applying takes just a few minutes, so what are you waiting for?