The Chancellor has recently announced a new ‘National Loan Guarantee Scheme’ to support lending to businesses – yet why is there so little enthusiasm in response to it?
The Treasury confirms this with these comments “the scheme might not increase the overall amount that banks lend to British Companies”. Businesses may see it as boost at a time when funding issues are a sensitive issue but the feeling is it’s just another tape ridden scheme to ‘help’ businesses survive in this tough economic climate.
Our commercial finance specialists say – “No doubt it will be another scheme to join the tsunami of failed initiatives. Just ask yourself, what happened to the Enterprise Finance Guarantee Scheme – why is there such a slow uptake? What happened to the Enterprise Capital Funds? Local Enterprise Partnerships? The list is endless and it all seems to be entangled in red tape.”
There are clearly incentives there but businesses are likely to struggle with the time to manage their applications for such finance. There is the copious amount of administration, time and extra costs businesses are unable to allocate to such projects.
This is where our commercial finance partners can help your business. We can apply for business finance on their behalf leaving them to manage and grow their business. After a free initial meeting with no obligation they will know the right way to access your clients finance whether it is direct through our strong panel of lenders or through a finance scheme thus overcoming the hurdles on your clients behalf.
Such is the plethora of commercial finance schemes available it is unlikely that any one business can be an expert in all of them. Commercial mortgage brokers may tend to steer clear of equipment leasing for example and vice versa. Legislation often ensures that to be fully authorised and approved as a supplier of certain products it is thus not viable to spread yourself too thinly and look to be an expert in other fields.
All but the very largest companies tend to remain specialists in their area of expertise rather than cross over into other fields. FSA regulations ensure compliance and therefore that the business advisor in question, assuming they are undertaking to give guidance covered under FSA regulations of course is indeed qualified to discuss such matters.
Keeping up to date on movements in government policy is also a challenge in itself so any good advisor will ensure they have kept up to date on such matters also.
Without doubt, the most common type of loan applications that lenders must consider are for personal loans. By design, these loans can be taken out for any particular purpose, suggestion any suspicion is likely to prevent the transaction from going through. But the process is much more reliable, and loans of as much as $5,000 can be quite easily secured.
Of course, having a poor credit score is something that lenders are not going to ignore. It is, after all, their job to assess the reliability of the borrower, and ascertain whether they can be trusted to make the required monthly repayments on time. In such instances, personal loans with bad credit are issued, which are different in that their interest rate is higher.
The fact is that loans for people with bad credit will never be available on terms as good as loans to applicants with good credit, slickcashloan though online lenders are beginning to challenge that idea.
There is a general belief that personal loans are never available in large sums. After all, if a loan of $50,000 is needed, the purpose for such a sum is surely the purchase of a car, or home improvements or even loan consolidation. These purposes are covered by specific loan deals. A personal loan with bad credit, however, hardly needs to be very high.
However, there are some advantages to seeking a smaller loan from lenders. A traditional lender, like a bank, will have questions about all loans, but online lenders offer a no questions asked policy on some loans up to $5,000, even loans for people with bad credit. So long as the applicant has a proven income, and a bank account, the lender does not care what the money is used for.
There are two types of personal loan to choose from, with each having very real effects on the repayment sum and schedule. The first is a secured loan, where collateral is provided as security against the amount borrowed. When seeking a personal loan with bad credit, this option is generally the best since the security gives lenders a greater confidence.
Collateral also means that the interest rate is generally lower, which is good news for the applicants. However, the fact that loans for people with bad credit carry with them far greater risk makes the lender pleased since any default can result in them having seizing the collateral.
The second type are unsecured loans, which basically means that the loan is approved with no collateral as back up. With this kind of personal loan the risk is higher, even if the applicant has excellent credit history. An unforeseen loss of job can throw the repayment plan into jeopardy, so when it comes to personal loans with bad credit that are unsecured, the risk is considered very high.
Lenders typically react to this level of risk by charging higher than normal interest rates. This can mean a huge increase in interest paid over the life time of the loan compared to good credit loans. There are better options when it comes to loans for people with bad credit.
Arguably the best personal loans to get are those what require no credit checks at all. And this is why it is considered a good idea to seek personal loans with bad credit form online lenders.
With loans of as much as $5,000 available credit check free, there is no need for an applicant to fear the impression their credit rating will make. Of course, loans for people with bad credit will always have some conditions, like proof of income, they are much easier to get than many believe.