The majority of banks are still not providing for the needs of smaller businesses, despite what they say. More than 47% of SMEs have been turned down for finance*, some more than once, and a third of business owners have had to forego their salary as a result. These issues for businesses have illustrated serious and potentially damaging funding gaps, but a new breed of lenders have arisen to meet this need and are thriving. We at LDF, now the largest independent finance company for smaller businesses in the UK, will be launching our advertising campaign “Welcome to the flipside” today. The campaign, promoting business loans, tells the market that there is another option to traditional banks and modern alternatives like crowdfunding or peer-to-peer lenders.
We have been in business for 30 years, initially providing services to accounting and law practices who use them habitually as a tool to manage potential cash flow bumps like VAT and corporation tax bills. Over recent years, we have developed our business reach to include asset purchases, and seen a growth in businesses seeking finance for business development, marketing, IT upgrades and refurbishments, despite uncertainty following Brexit.
Recent estimates indicate that the value of rejected bank finance applications has reached £35bn per year. Many small business owners fear being rejected so don’t apply for finance at all, impacting their growth potential.
We have realised that the application process is a key problem and removed all the unnecessary ‘red tape’ from our business, making applying and receiving finance faster and more effective. There are no tick box forms and smaller business owners and directors will always be able to speak to a person and be treated like an intelligent human being. The campaign message is simple – LDF brings money to smaller businesses, not bureaucracy.
Family-run White Cross Vets flipped the impossible using our business finance to almost double their workforce from 9 practices to 16 within only a year.
“The funding we received enabled us to open five new practices creating 60 new jobs, as well as the purchase of veterinary equipment such as Digital X-rays and Ultrasound Scanners. We have also recently installed new sound systems that are scientifically designed to reduce stress in cats and dogs – this ‘Meaow-sic’ is a real hit with patients and their owners.”
Jo Jobling, Group Finance Manager at White Cross Vets
So, as we get ever closer to our formal departure from the EU, we remain unclear about our future, but for smaller businesses, it is business as usual. And whilst the same challenges of managing cash flow, paying tax bills and funding business growth remain, we are offering a simple, no hassle finance solution. Welcome to the flipside indeed.
*LDF survey of small businesses conducted in January 2017