UK businesses looking for finance are finding it harder to get a loan

With Brexit and political uncertainty causing credit conditions to tighten, one in ten businesses are looking for finance from a non-bank lender.

With the UK in the early stages of Brexit and now facing a General Election, new research conducted by RateSetter Business Finance reveals how credit conditions look to be tightening again, with over 400,000 small businesses now interested in finding an alternative to the banks for a loan.

When asked, 32 per cent of SMEs that had considered raising finance say that it was now harder than six months ago.

During this period of uncertainty for SMEs, these findings come at a time when guidance is needed most.

As banks are progressively closing their branches and cutting back on front-line staff, businesses now need to go elsewhere to benefit from face-to-face contact before borrowing money. More than a third (39 per cent) of small businesses prefer to seek advice in person, the move to online-only offerings and the closure of physical branches is a concern.

Bucking the trend, RateSetter Business Finance, a peer-to-peer business lender, has built up a network of regional managers that can meet potential borrowers and understand their full story.

A recent example was Essex-based Brighter Futures Foster Care, whose co-founder Justina Gay comments, ‘With RateSetter we were able to talk in person to people who genuinely seemed interested in our business and who understood what the options might be. We were talked through the process at every stage and it was pain free.’

The £120k loan from RateSetter has enabled the company to add 19 new fostering households and 24 more child placements in the South East of the country.

The research also finds that the majority of businesses that are looking for finance (63 per cent), value speed and simplicity when obtaining a loan. RateSetter’s managing director of commercial finance, Paul Marston, explains how this is given priority when agreeing a loan.

‘We know that the sooner we can put the money into the hands of the business owner, the sooner it can be put to work. We have built our processes around short applications, quick decisions and minimal paperwork and in many cases we’ve been able to provide money in a business’s account within hours of applying.

‘Our Regional Managers are all experienced lenders, who are there to guide business owners towards the right way to borrow, not just provide a simple yes or no,’ continues Marston.

This new research indicates that alternatives to the banks, like RateSetter, are necessary for the continued growth of the UK’s SME market and the economy in general.

Further reading on finance

Looking for finance? is working in partnership with trusted lenders to find the best business funding deals. Find out more here.

Owen Gough, SmallBusiness UK

Owen Gough

Owen was a reporter for Bonhill Group plc writing across the and titles before moving on to be a Digital Technology reporter for the

Related Topics

Business Finance

Leave a comment