Posted: Tuesday, 19 March 2024 @ 10:20
This month, Asset Finance International reported that 75% of small business owners are experiencing sleepless nights because of worries about market volatility continuing into another financial year.
A lack of funding opportunities shouldn’t be a problem
Key concerns were over interest rates and managing cash flow - nothing new there, except that it's an area of concern for business owner's that's consistently higher than it was eight years ago. Regional discrepancies played a part with those in Yorkshire, the Humber and Wales proving the most likely to be worried.
These figures were from one study, but multiple reports tell similar tales. Furthermore, this is not the first or the last time that business owners have lost sleep over the financing and running of their business - in part, it goes with the territory.
However, whatever the concerns of business owners, a lack of cash flow and funding opportunities shouldn't have to be the source of anxiety or sleepless nights, especially in a business that's growing or operating well, and that’s in need of finance in order to continue its upward trajectory.
Why the client’s full story is important for business loans
One of the things that we have always felt is incredibly important at Rivers is human underwriting for our business loans. The primary reason for that is due diligence and ensuring responsible lending. To us, due diligence means affordability, but it also means understanding the context for the loan, and not just the amount. By understanding a business's full picture, the reason for the loan, the goals, the assets and the story to date, we can understand both the literal affordability and whether the product and amount being asked for is right for the client.
The way we see it, while the client is an expert in their business, we are experts in business finance, funding and loans. We also have an independent and external perspective, built on decades of individual and collective experience, including our own time building a business from the ground up. That knowledge gives us a unique position from which we can listen, learn and understand what customers are asking for and why.
In some instances, it may be that a different product is better suited to the one they have asked for, while in others we may feel that the customer is not asking for enough money because they're concerned about being turned down for more. If it's not enough funding to achieve their goals though, then a higher borrowing, spread over a longer period may be more prudent.
The place where SMEs find practical funding for capital management
These are the details that make the difference when it comes to knowing, understanding and providing cash flow for SMEs. With that in mind, while it’s never easy to own, operate and grow a business, of all the things keeping you up at night, access to funding options and opportunities shouldn’t be one of them. That’s where alternative lenders and non-banks have been making the difference for SMEs, helping them to successfully find funding that supports realistic, practical capital management.
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