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

4 results found 
Kirklees’ Biggest Business Conference Returns

Tuesday 06 February 2018

Following on from the huge success of the 2017 Conference, the Mid Yorkshire Chamber is delighted to be hosting their 2018 Kirklees Business Conference (KBC) at John Smith’s Stadium, Huddersfield on Wednesday 21st March. The free, one-day conference has become an unmissable event in the local business calendar which is dedicated to helping businesses to connect, learn and grow. Attracting over 600 business people and 50 exhibitors, KBC includes a fantastic programme of engaging seminars, a discussion panel, surgery sessions and open networking throughout the day. This year the Mid Yorkshire Chamber is proud to announce an official partnership with Google bringing a Digital Garage to KBC as part of the seminar programme. Running alongside the four seminar sessions, more surgery sessions will also take place following their success last year. Held by local businesses located in the stadium boxes, the surgeries will provide the opportunity for companies to run their own seminars, workshops or one to ones. Rory Bourke, Events & Sponsorship Co-ordinator at the Chamber said: ”Kirklees Business Conference is definitely shaping up to be a day not to be missed. The conference is a fantastic opportunity to raise your profile, make new contacts and learn from other experienced professionals. There are many opportunities for local businesses to get involved through sponsorship, exhibiting or attending as a delegate.” Confirmed conference sponsors and partners include; AD:VENTURE, The John Smith’s Stadium, The Design Mechanics and Social Progress. Delegate tickets are free but registration is essential, significant interest is anticipated therefore early delegate booking via www.kirkleesbusinessconference.co.uk is advised to avoid disappointment. For further information about the conference follow @MYBizConfs and #KirkleesConf on twitter. To find out more about sponsoring or exhibiting at the event please email events@mycci.co.uk or call 01484 483679.
Posted by Mid Yorkshire Chamber of Commerce
Smith Brothers spins towards a £2.5k festive fundraising total

Tuesday 19 December 2017

Elland-based electrical engineering firm Smith Brothers has completed a week-long festive fundraising venture, raising more than £2,500 for three charities. The main event saw two squads of eleven competing in an indoor ‘bikeathon’ at the company’s HQ last week. With one side representing the British Heart Foundation and the other Diabetes UK, both were tasked with racing the equivalent distance of 206 miles from the Lowfields Business Park boardroom to Big Ben. Although the British Heart Foundation cyclists were first to cross the finish line, both teams far surpassed their initial fundraising targets of £500 each. Donations amounted to £1,283.82 for the winners and £1,193.94 for Diabetes UK. The power engineering contractor also raised £100 for Save the Children through a bake sale and sweepstakes competition, which were held alongside the bikeathon. Elaborating on the successful fundraising activities, managing director Nick Gudgeon said: “It goes without saying that festive spirits were high in the office during last week’s charity cycling challenge – and competitive streaks were revealed too! “Even though my team narrowly lost out on the winning title, it was still brilliant to get involved with the bikeathon and we’re thrilled to have beaten our sponsorship goals for both organisations. It’s always uplifting to see people rallying together in aid of such worthwhile causes, and we’re especially grateful to the volunteer cyclists for taking part, AKTIV Training Coach for lending us the bikes and all those who generously donated.” Earlier in 2017, Smith Brothers also backed a golf day in aid of the Quaggy Development Trust and sponsored a benefit dinner hosted by Frank Bruno for the Nigel Harris Sports Foundation. The company additionally sponsors an under 9s football team as part of its community support.
Posted by Scriba PR Limited
Around Town In the Huddersfield Live Hygge Tipi

Wednesday 15 November 2017

What better time to get together than Christmas? Around Town believe that connecting the business community of Huddersfield in its iconic locations and organisations is a brilliant way to share ideas, hear inspirational stories and have some FUN. Organised by Oli Smith, Michelle Crowther and Chris Buckley Around Town create memorable events every 3 months. 2018 plans are already underway; “as well as meeting at some amazing businesses we are walking Around Town in Spring - a fantastic way to get to know each other whilst experiencing some award winning locations and scenery in Huddersfield “ says Michelle And with Huddersfield Live December promises to be a memorable Around Town event. Hosted in the Hygge Tipi in St Georges Square, hear Sam Watt and Poppy Stahelin tell of the fabulous work the team at Huddersfield Live are doing and some of the stunning events planned for next year. Laura Drury sets the backdrop of how she formed the The Hygge Tipi and how it creates a convivial atmosphere for Huddersfield folk to mingle, drink mulled wine, and keep the winter night out in front of the log fire. All In the heart of Huddersfield. Tickets are limited and can be reserved FREE here. Chamber members old and new are very welcome. Around Town Events for 2018 confirmed. March 1st - Valli Opticians May 17th - Owen Scott Tailors May 25th - (Walk) Around Town - 15miles (approx) Breakfast Sarnies, The Kirklees Way, Finish in a Brewery!
Posted by The Alternative Board
Group supporting crisis-hit asylum seekers wins crowdfunding cash at Huddersfield SOUP

Friday 10 November 2017

A charity that feeds and supports people fleeing war zones and violence gained a boost to its funds after winning the fourth Huddersfield SOUP event at The Media Centre. Destitute Asylum Seekers Huddersfield (DASH) was one of four good causes to pitch for audience members’ £5 entry fees at the packed crowdfunding get-together at Café Ollo and was delighted to win £400. Mike Shaw, who presented a four-minute bid, explained how DASH provides hot meals and help with casework, health and education issues and language. He said: “We will spend this money well, it won’t last long. It will go on food, bus fares and essentials. It is wonderful to be in room full of people who care. Thank you for the generosity of the citizens of Huddersfield.” Huddersfield SOUP, which has been running for a year, is based on an American concept in which four people pitch, four questions can be asked of each presenter and then the audience must vote for their favourite – as well as enjoying a bowl of warming soup, a bar and live music. The Media Centre’s Chief Executive, Brent Woods, said: “This was another great SOUP event with original, emotive pitches. The atmosphere was buzzing and there was plenty of opportunity for participants to meet new people and make connections. Big congratulations to DASH, our worthy winner.” Other people to pitch were: • Rachel Devereux who wants to develop her idea of ‘emergency bears’ for families to keep in their cars so that if there is an accident, paramedics can scan the bear electronically to receive important information about children on board. • Victoria Callum-Ward who is organising a Winter Pride event at Tokyo in Huddersfield to raise money for the Hands Off HRI campaign. • Sam Booth who talked about Crowns For Courage, her initiative to offer confidence-boosting head henna tattoos to women who have undergone chemotherapy and lost their hair. The event was compered by Rebecca Winwood, Zephyr Bar and Kitchen provided delicious pumpkin and pea and ham soups and Clint Junior, booked through Small Seeds acoustic nights, sang and played guitar. Those seeking help from DASH include women fleeing forced marriage and domestic violence, gay men facing persecution and many escaping war zones and conflict. Often they don’t know if they will be allowed to stay in the UK and find it difficult to prove what they have been through. DASH operates from the Salvation Army premises in New Hey Road, Oakes. It has five part-time staff who are paid for through charitable trusts as well as over 50 volunteers. For more information about DASH or to donate, go to www.huddsdash.org.uk
Posted by Scriba PR Limited
4 results found 

Events Posted

2 results found 
Image for
Kirklees Business Conference
Wednesday 21 March 2018 - Wednesday 21 February 2018, 09:00 - 16:00
John Smith's Stadium, Stadium Way, Huddersfield, HD1 6PG
Free Entry
Image for
Business Diversification
Tuesday 17 April 2018, 17:30 - 20:00
3M Buckley Innovation Centre , Firth Street , Huddersfield , West Yorkshire , HD1 3BD
Free Entry - 70 places
2 results found 
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