I was being interviewed last week, and I was asked:
” Mark, you often say businesses overpay for finance and most businesses that apply direct are turned down 70% of the time, why is that?”
Finance is similiar to buying many things, you should go to where you are best suited for your budget and business requirements. If you had £90k to spend on a car you will have different requirements than if you had £9k to spend, the chances are you will be shopping in different places. Both car dealers, will be used to dealing with the type of customer who comes in every day and will give them the best deal.
Well if you are looking for a £500k loan over 7 years, without a personal guarantee and no charges for early repayment(we can do this loan, by the way) you would not go to the same finance company-
As the Directors of a business that had a previous liquidation of their business and currently are in a time to pay arrangement with HMRC, would you?(we can do this loan to, by the way) Of Course you wouldn’t
The trouble is Finance Companies and Banks, marketing departments say:
“Everyone is welcome” (just like Supermarkets)
Well, try having a Pub or being in the Construction related Industry and walking into your local bank and asking for a decent loan – But you probably have tried that? And found it was not quite like the TV Ads.
Well you might say, what about all the big finance companies, that lend to all businesses, they are all over the internet? Yes, but which one will you go to?
When you were were young, you might have gone to the supermarket with your Mum, and over the years you have learnt the difference between Waitrose, Tesco, Asda and Lidl. You went shopping every week and knew which Supermarket was the right fit for you and where the best offers were that week.
Well business finance is similar, the 100 odd finance companies have their own particular “sweet spot”, it might be high risk or low risk, construction, leisure or manufacturing. Go to the wrong one and you will pay more or be turned down.
And they all like to balance their risk spread, which means the same business might, apply to the same finance company, at different times of the year and pay a lot more or be turned down.
It’s just like a special offer, you go at the right time and you will pay less, go at the wrong time and you will pay more.
Well I am not your Mum and I can’t show you the best supermarket for your needs and where the special offers are.
But I do know finance companies and they do tell my team what they are looking for right now.
If you would like to know what this week’s “Special Offers” are for your particular needs then please call me.
You know your business best, let me be your “Sat Nav” to the best finance deals with as little traffic as possible.
PS. Do you know what the biggest complaints, I hear every week from Company Directors are? Book Debt Finance, Factoring and Invoice Finance. or Secured Funding on your home or business asset or development finance.
If you are looking for this type of finance, please please call me now rather than in three months time with another horror story. It is so easy to get this right but so easy to get it wrong, a bit like driving through London with a Satnav or without a Satnav or map, just relying on signs.