When you shouldn’t get a business loan (compared to when you should)

We sourced emergency same day funding for a business owner after their major customer was late paying their bill and they had expenses they did not want to put off.

The loan was structured to allow for an early payment discount, lowering the cost of the finance and our client was extremely confident their customer was going to pay. 

This meant they could clear the loan within the early payout window.

This finance wouldn’t have been appropriate for every business.

Business owners often come to us for the first time because their existing finance is more expensive than it should be or they’ve found it’s not the right solution for their needs.

We help business owners faced with this challenge change to the right business loan option at the best possible rate. 

This can apply to all loans but most often to unsecured lending, invoice finance, trade finance and private lending.

I understand how business owners can end up in the wrong loan option.

When you’re under pressure any finance approval might seem like a good solution but that’s not always true.

The right loan solution should take into account your business cycles, your capacity to repay the loan and other commitments.

It might seem obvious but if the cost of your finance is more than the margin you make on your products and services you should reconsider going ahead even if you have an approval.

Instead of helping you grow or ease a cash flow challenge, taking a loan in this situation – hoping business or circumstances will somehow change – can set you backwards.

In contrast, the right finance for your business will give you a clear benefit, should enable your business and will have a defined exit strategy you feel good about.

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