SMEs face two additional business challenges. Firstly, making the right choice of provider from the bewildering number of banks and wider finance providers. Secondly, that of ‘Who do you trust for advice?’ It’s increasingly difficult to find an agenda-free source of information that helps you find the most appropriate provider for your SME size and sector.
1) Should you simply go to your current business banking provider?
Approaching your bank for a loan is certainly one option, but failure to test the market can come at a price. Competition in the loan sector comes not just from banks, but from building societies, credit unions, peer-to-peer lenders and crowdfunders. The choice for SMEs beyond the high street has been further widened by new competition from both online lending platforms and business-only models.
Business loan providers recommended on independent SME financial services website, Business Banking Insight show it’s best not to write off a provider just because you haven’t heard of them. Newer players such as Iwoca, FundingCircle and Handelsbanken are frequently recommended by their customers, along with more ‘household name’ brands.
You can see how loan providers compare and what your peers are saying about them here.
2) Independent recommendations on business loans - without an agenda
Product websites such as Moneysupermarket.com are useful for an initial list of providers, but they are paid by those they feature – and exclude many smaller, higher rated banks. Independent consultants and finance brokers are a definite option for guidance. You’ll need, of course, to balance the value of their recommendations with the fee they will need to charge for their time.
Business Banking Insight (BBI) is a new, independent website, specialising in SME finance product reviews. BBI commissions a valuable national survey of SMEs’ most recommended business loan providers, and makes it available on its site at no cost. The website allows you to view the most (and least) recommended providers from those small businesses who, importantly, currently hold the products themselves.
BBI is a joint venture between the Federation of Small Businesses, British Chambers of Commerce, HM Treasury and other key stakeholders. BBI was set up in 2014 to help small businesses find the most appropriate financial product for their needs.
3) Who are the UK’s most recommended SME loan providers?
The results of the Q4 2016 BBI survey have now been added to the website. The wealth of new, independent data not only reveals providers who scored the highest level of SME recommendations nationally, but also allows you to drill down and view recommendations by company size, business sector – and geographical area. It also lets you view those providers that are internationally active, for SMEs with an eye on starting or growing overseas trade.
Nearly 50 providers, big and small, are detailed in the survey and rated impartially. There are also links to the providers’ websites, so you can see the full detail of rates, charges and services for each.
Importantly, SMEs were not paid for their feedback, so the results are revealing, helpful and wholly independent.
You’ll find details of how loan providers are rated here.
4) Praise and criticism for the UK’s business loan providers
Beyond the recommendations themselves, the Business Banking Insight website also gives feedback from SMEs on the quality of service they are receiving from their loan providers.
Reviewers didn’t hold back on both praise and criticism, painting pictures which cover everything from the set-up of loans, responsiveness, to value for money and even providers’ support and understanding for SMEs in difficult times.
With the average loan value approved for smaller businesses in Q3 a sizeable £82,132, the implications of choosing the right lender will impact on your business for many years to come***. The quarterly Business Banking Insight SME survey provides a valuable, independent starting point where you can compare recommendation levels of loan providers currently lending to small businesses like yours.
View SME recommendations here.
* Longitudinal Small Business Survey, Department for Business, Innovation and Skills, May 2016
** Hiscox DNA of an Entrepreneur report, September 2016
*** BBA SME Lending Data report, September 2016