There are plenty of funding routes for SMEs to grow. Lenders are getting to grips with the opportunities in providing funding for SMEs to grow and expand their businesses.
What we’re also seeing in the market is the willingness of some lenders offering genuine 100% funding for projects aimed at business improvement initiatives. There are also a number of clever ways we can help SMEs with achieving 100% funding by topping up from other lenders or Government schemes for regional development.
Expansion and growth for SMEs faces a number of challenges in the wider economic and political arenas such as the uncertainty around Brexit, the possibility of bank rate increases and the demand for their products or services these pressures bring.
But, despite all of this, we’re seeing optimism in the market as companies look to diversify to drive their business forward, seek out new customers and many are investing in new technology to keep ahead of competitors.
For the more traditional sources of funds, such as the High Street banks and larger business lenders, there’s been a shift towards their assessment of a proposal to focus more on how the business is trading rather than the value of their assets. This is understandable, as they want to see they are investing in a well-run, dynamic and forward-thinking business with plans to grow even further. In these cases, assets are used as security rather than an underwriting consideration on the viability of the initiative they’re lending on. But for the right proposal 100% commercial mortgages are available so they are worth consideration.
Usually though we’re looking at LTVs around 75%, with any additional finance coming from a variety of options. For example, we’ve seen an explosion of smaller cash flow and niche business loan lenders who can provide additional funds to reach the required LTV albeit on separate terms to the primary loan. However, we can make the two work together to co-ordinate end dates and repayment schedules.
Another popular way to ‘top up’ the funding gap for growth and expansion is using the many different government and state-sponsored grants available for developing businesses. These can be for specific types of business initiative such as manufacturing or technology, or they can be linked to regional growth such as the Northern Powerhouse. There are a lot of grants and support but it can be confusing and time-consuming to source them and that’s where a specialist broker like Key can help with our expert knowledge of regional grants.
The desire for businesses to grow is still there and there are plenty of funding options from mainstream lenders, large specialist funders and smaller, niche players, as well as regionally supported grants.
Make sure to contact Key to help you find the money you need to take your business forward.