It’s no secret that a loan can help your business reach a key milestone. Whether you’re a startup or something more established, you may need to secure non-standard assets that typical lenders won’t finance. A business growth plan might rely on it, or it could be vital in order to carry out the work that you do.
Unfortunately, these are seen as high risk loans for a small business… Until, of course, you scour for other options. And trust us – they do exist…
What are high risk loans?
We should classify what these loans are before moving on to solving the lending challenges you’ve faced so far, or may be about to walk into.
High risk loans for a small business aren’t perceived to be valuable beyond what the business does. This means that, if you were to cease trading, few people (if any) could use those assets for any benefit. Premises, for example, can be sold. So can stocks and shares. Equipment and software may not be as transferrable. A list of atypical assets would include:
- Physical tools that are only useful to your industry
- The installation and upkeep of a digital network
- Software and hardware
- An office refurbishment
- Security systems
- Bespoke assets
So when we ask ‘what are high risk loans?’, the answer lies in perception. To a mainstream bank or lending partner, these resources are harder to repossess if you don’t keep up with a payment schedule. This works for leasing too. Every year, thousands of applications are rejected on such terms. And it’s happening in the wake of rising business rates, which puts more strain on SMEs.
Seek a more considerate point of view
If the barrier to finance is subjective, then you must look elsewhere for alternative financing models. The UK is experiencing a change in thinking within the lending sphere. Forbes reported a 43% jump in alternative finance approvals over 2017 alone.
Johnson Reed’s Quirky Kit service puts you in the frame for non-standard asset financing – which, with our guidance, you’ll be able to pay back on time. From industrial machines and technology to an office refit, we link to some of the best, progressive lenders in the country to open up more investment opportunities for your growing organisation.
Let’s change the perception of ‘high risk’ loans for a small business… Because, after all, there’s a reason for those apostrophes. The phrase doesn’t take into consideration how an asset may positively impact your earnings, both now and in years to come. Speak to us today and see where we can take your commercial ambitions.