The Bank of England regularly reports on business lending, the Credit Conditions Survey is released quarterly and provides an insight into how banks and building societies are providing capital to businesses.
In this article we’re going to look at a trend in lending to medium-sized businesses.
You can read the full report here and the key highlights are as follows:
The Environment for Medium-Sized Businesses
The Q4 2018 Credit Conditions Survey suggests that medium-sized businesses needing financing are finding it slightly harder to get it from traditional lenders.
Demand from medium-sized businesses increased by 5% in Q4 while default rates increased 10.4% in Q3 and 6.6% in Q4. Lenders reduced the availability of credit to medium-sized businesses by 5.9% in Q4. Approvals are expected to go down by 6.3% in Q1 2019.
While these changes are not drastic they highlight the difficulties medium-sized businesses face. Even with security, profitable and stable medium-sized businesses can find it hard to get funding from traditional lenders. They sometimes have characteristics that don’t fit the traditional lenders criteria, for example they may:
Traditional lenders often aren’t able to deploy the resources to differentiate between well-run and stable medium-sized businesses and those that are a higher risk. This can leave medium-sized businesses that have a solid proposal unable to access funding.
How Reparo Finance Help Medium-Sized Businesses
Traditional lenders have a large volume of loan applications to process so a change in lending criteria may be applied broadly to avoid risk.
For example, they may discount medium-sized businesses that have any adverse financial information, or reject a loan application because of a certain gearing level in the balance sheet. This is the way traditional lenders screen businesses for risk – they need to apply criteria broadly because they simply don’t have the time to review every single application in detail.
But we do.
Our approach to lending is highly specific. Every business that approaches our team will have its business case reviewed by an expert who will look beyond the headline criteria and understand your proposition. When you contact Reparo you’ll notice it’s a little bit different to contacting a traditional lender:
This is how we make loan approval decisions.
Asset-backed loans between £25,000 and £1m.
Reparo Term Loan Product
Alongside our Reparo loan we’re now offering a longer term product.
Loans of up to £50,000 that don’t necessarily require business assets as security.
To discuss a loan between £10,000 and £1m, please get in touch with one of the team on email@example.com or 0161 451 5714. You can find out more about us on our website: www.reparofinance.co.uk