There were stunning figures released in a new survey about business start-ups recently.
Data from small business lender iwoca showed that 93 new businesses were created every hour.
Despite economic headwinds, rising inflation and rocketing energy costs, the number jumped by 18 per cent year on year.
Data from Companies House show over 402,000 businesses were also registered between January and June 2022.
However, despite this surge in new businesses and demand for funding, many still struggle to secure the finance they need.
Lenders want security for loans
Commercial lenders want to know their money will be secure when they lend to a new business.
They want to be sure that the borrower can repay, or have their assets liquidated should they default.
Securing financing for a start-up is especially challenging, as it is inherently riskier than financing an existing business.
There are many ways of raising finance, including alternative methods, outside of traditional loans, such as angel investors, peer-to-peer platforms, crowdfunding or credit unions.
How can businesses improve their chances?
Measures that might persuade lenders to provide finance include:
Before trying to secure finance from a bank, it’s a smart move to speak to an accountant.
Rejected? Then start again
Find out why your application was rejected. Get as many specifics as possible for the rejection, so an updated plan can be presented.
Ask for recommendations from other potential lenders who might specialise in your field and then re-apply.
However, be careful not to make too many applications, as this could affect your credit score.ri
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