WHERE LOCAL BUSINESS GROWS

Non-bank lenders



Overview
 

People in business often approach banks for loans, but they are not the only option. Other lenders may be more competitive or more suitable for your business, such as:

  • commercial loan providers
  • peer-to-peer lenders
  • social and community lenders, e.g. Community Development Finance Institutions and credit unions
If your business has suffered recent losses, has a poor credit rating or has recently been turned down for bank finance, you may find non-bank finance easier to obtain, more flexible and possibly cheaper.

The process
 

Before approaching a non-bank investor, you should make sure your business is ‘investment ready’ by:

  • keeping yourself well informed about your business finances
  • having an up-to-date business plan
  • being clear about the amount of money you require and what it will be used for
  • carrying out market research to demonstrate that there's a market for the products or services that you intend to sell
  • producing cashflow projections for the next 12 months to show that you will be able to afford repayments, including interest and fees
  • carrying out a SWOT analysis (strengths, weaknesses, opportunities and threats relating to your business)
  • ensuring your business and personal credit ratings are up to date and error-free

Loan guarantees

Most non-bank lenders will ask you for some form of guarantee before granting a loan. This could include assets such as property owned by the business. You may also be required to ask another person or another business to act as a guarantor and guarantee the loan. The guarantee means that the lender will claim from the guarantor if your business cannot meet the repayments.

Some lenders will also require personal guarantees - eg from your board of directors or business backers.

Many loan providers require you to take out loan repayment insurance to cover repayments if your business meets cashflow problems.

Pros and cons
 

Pros

  • you may get a lower rate of interest and charges than you would with a bank loan
  • non-bank lenders may be able to make loans over a longer period than a bank
  • less restrictive than a bank when it comes to issues like a poor credit rating or recent losses
Cons
  • non-bank lenders aren’t as strictly regulated than banks, so you need to be careful when choosing one

Common mistakes
 

You should read all agreements carefully before you borrow from a non-bank lender and find out if any assets will be required as security. Most non-bank lenders are reputable, but they are subject to fewer regulations than banks.

You should avoid unauthorised lenders, also know as loan sharks. An unauthorised lender may give you quick access to credit, possibly without needing a business plan or security, but there may be drawbacks including unfavourable interest rates and loan terms.

You may be dealing with a loan shark if:

  • the salesperson is pestering you or is particularly pushy
  • the interest rate is significantly higher than other lenders
  • the company is reluctant to show you the loan terms and conditions
  • you are asked to tie yourself into a longer-term contract than you need

Funding sources
 

There are a number of different types of non-bank finance sources.

Commercial loan providers

Commercial loan providers provide financial services like loans and credit facilities, but don't have a banker's licence. They can however have less restrictive lending criteria and may be a useful source of funding. You can check the Financial Services Register to ensure the provider is registered.

The HM Treasury backed Business Finance Partnership scheme aims to increase and diversify sources of capital available to business.

Peer-to-peer lenders

Peer-to-peer lenders let you borrow money directly from savers - cutting banks out of the equation. Terms can be more favourable - eg no early repayment fees - and you may find you are accepted even though banks have turned you down. Also, some services are free to apply for and doing so won't affect your credit rating - even if your application is rejected.

Some peer-to-peer lenders include:

  • ThinCats.com
  • Zopa
  • Funding Circle
  • RateSetter
  • Assetz SME Capital

Social and community lenders

Social lenders are generally non-profit making organisations that can offer loans and credit.
  • Community Development Finance Institutions (CDFIs) lend to businesses, social enterprises, charities and individuals who intend to use the money to help and develop their local community. The Community Development Finance Association has a tool that can help you find CDFI finance.
  • Co-operative and community finance - employee-owned or community businesses can apply to borrow money from the Industrial Common Ownership Finance Fund.
  • Credit unions - credit unions offer loans that are accessible and affordable. They are owned and controlled by their members. This means they have to make decisions that are in members' best interests, rather than to make money for external shareholders.

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News

3 results found 
Huddersfield house developer doubles target to raise £22,000 for charity

Friday 26 May 2017

Huddersfield-based house developer SB Homes has more than doubled its charity ball fundraising target, making £22,000 for two local charities. The event was organised to mark the firm’s 20th anniversary and took place at Casa in Brighouse on Saturday evening. Kirkwood Hospice and Forget Me Not Children’s Hospice will receive an equal split of the vital funds raised. A total of 214 friends, family, suppliers, clients and business people from the property industry attended the ball. They were greeted with a drinks reception, followed by a three-course dinner, dancing, casino tables and live music from musician Steven Heath. Stephen Byram, managing director of SB Homes said: “The ball went really well, the atmosphere was great and the singer got everyone up dancing. We wanted to have a fantastic night for our 20th year in business. But more than that, we also set out to support causes that are really important for our town. “Most people within West Yorkshire know someone who has been supported in some way by these hospices. Kirkwood Hospice is particularly close to me and my family — my wife’s nana passed away there five years ago, and my mum attends their weekly support sessions. She has made lots of friends and her confidence has skyrocketed since going there. In fact, she’d rather go to Kirkwood than have a holiday! What they do is genuinely incredible.” Both charities care for local people and children living with life-limiting illnesses and provide support for their families and friends, free of charge. Kate Leadbeater, Partnership Development Manager at Kirkwood Hospice said: “Kirkwood Hospice really is very lucky to have SB Homes as a supporter and we appreciate everything that they have done for us. Their generosity will make a huge difference to those in Kirklees who rely on our services. “It’s also quite poignant that the firm chose to support us in its 20th year, just as we are celebrating our 30th year!” Samantha Loucas, corporate fundraiser at Forget Me Not Children’s Hospice added: “We are so grateful that SB Homes chose to support us — £22,000 is a fantastic achievement and we truly can’t thank them enough!” Huddersfield Interiors was the event’s headline sponsor, with other main associates including Newlay, Easy Bathrooms and Ramsdens Solicitors. The final total of over £22,000 was raised from a combination of ticket sales, sponsorship funds, donations, a live charity auction, a table fundraiser and silent auction organised by See It Now Sports. Lots included a diamond, catered chalet holiday in French Alps, signed Anthony Joshua shorts and a break to New York, to name a few. Early next month, SB Homes will launch phase two of its Empire Works development in Slaithwaite, Huddersfield as well as a show home. The properties include 24 2-bedroom apartments, as well as four 4-bedroom family houses.
Posted by Byram, Amy
Yorkshire businesses get behind £10k fundraising campaign

Tuesday 04 April 2017

As preparations for the charity football initiative ‘The Match 2017’ continue to gain momentum, the latest supporters to get on board are Huddersfield-based businesses Magic Rock Brewing and Lindley Financial Management. The inaugural event, which will take place on Saturday 20th May at The MBI Shay Stadium in Halifax, will bring together footballing amateurs and Huddersfield Town legends, in a game that will help to raise much needed funds for Yorkshire Air Ambulance. Both firms have dug deep for the cause, and have each donated £500 in return for becoming an official shirt sponsor. With a running cost of £12,000 per day for the two yellow helicopters to remain active, the organisation relies entirely on donations to continue saving lives. And now further support is required to keep The Match proceeds growing, and help this initiative reach its £10,000 target. Magic Rock Brewing was founded by brothers Richard and Jonny Burhouse and inspired by brewing traditions and the US craft beer scene in particular. The award-winning and ever-growing company produces an innovative range of idiosyncratic beers in their 4,000sqft Tap Room, close to the town centre. When approached via social media and asked to get behind The Match, Richard says there was never any doubt about getting involved: “We are a community focused business, keen to support local initiatives wherever possible. We are aware of the excellent work the air ambulance does for the region, and wanted to do our bit.” Regular charity supporters Lindley Financial Management also had no qualms about signing up to help the event. The independent financial advisers, based in Brighouse, also support Pilgrim Bandits Charity, aiding soldier amputees injured in Iraq and Afghanistan. Commenting on The Match, director Mark Learmont, said: “I hope as many people as possible attend on May 20th. Nobody knows when they may need the help of the Yorkshire Air Ambulance – supporting them is vital and their services must be applauded.” Organiser, and founder of grassroots football specialists Coaches Club, Dave Learmont, adds: “I am so thankful that two local businesses have gone the extra mile to raise awareness and proceeds for this fantastic charity. 100% of all funds donated will go to Yorkshire Air Ambulance, and these shirt sponsorships put us well on our way to hitting our huge target.” But the search for sponsors isn’t over, with the players themselves now looking for individual support. For only £150, companies will secure their name and details on the official match website, alongside their logo on the programme. The players and Town legends are also appealing for members of the public to get on board and buy tickets. Available at £10 for adults and £5 for children, the aim is to provide a fun, low cost day out for all the family. Pre-match and half-time entertainment – as well as a couple of extra special guests – will be revealed over the coming weeks. All tickets must be purchased before the game, via justgiving.com/teams/coaches-club. Further information and updates about The Match and player sponsorship can be found at The Coaches Club website, and on Twitter @cccmatch.
Posted by Scriba PR Limited
Vizulate becomes Approved Supplier on Digital Enterprise scheme

Friday 10 March 2017

Vizulate Digital is delighted to announce that we have been named as an approved supplier on the Leeds City Region Digital Enterprise scheme, which allows eligible small and medium sized businesses across Yorkshire to ‘Invest in Digital’. Running until March 2019, the Digital Enterprise scheme aims to support the growth and development of SMEs in the region through investment in digital skills and technology. Eligible businesses will be able to apply for 40% funding towards the cost of digital projects including digital marketing, social media, web design and development, e-commerce and more – up to a maximum of £5,000. The Digital Growth Vouchers could also fund part of the cost of technology upgrades such as IT and telecoms and, if approved, the business will then only have to cover the remaining 60% of the cost. The Digital Enterprise scheme is a partnership programme which is partly funded by the European Union (European Regional Development Fund), the West Yorkshire Combined Authority/Leeds city region Local Enterprise Partnership (LEP) and the 9 local authorities which form part of the Leeds city region – Leeds, Calderdale, Kirklees, Bradford, Selby, Craven, Harrogate, York and Wakefield. As approved suppliers on the Digital Enterprise scheme with over 10 years’ experience we are able to offer the full range of digital services including: Website Design & Development E-Commerce Digital Marketing Social Media Search Engine Optimisation (SEO) Online Advertising (Google AdWords, Facebook Ads etc.) Video & Animation Integrated Digital Solutions Web Hosting & Email Through our trusted partners we can also provide IT and telecoms solutions. We believe digital marketing represents the single biggest opportunity for businesses to achieve growth.
Posted by Vizulate Digital
3 results found 
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