Thursday, November 4, 2010

Huge Costs Mean Smaller Firms Face A Struggle To Secure Loans From High Street Banks?

While a rush of first-time buyers meant that the number of secured loans approved by British banks last December was double that during the same period in 2008, many small businesses are experiencing difficulties in finding a bank that is willing to lend without imposing unachievable administration costs and interest rates of up to 8%.

Despite the fact that Britain is emerging from recession, a growing number of small businesses are facing a battle for survival when securing loans from high street banks is not only proving to be prohibitively costly but also incredibly time consuming. Some firms are spending months searching for a loan, submitting numerous applications in the process, but for many the big name banks are not their ultimate source of funding even though some published figures suggest evidence to the contrary.

Other financial institutions are allowing smaller firms the chance to secure loans where banks have failed to provide a satisfactory solution. While potential home-owners may have the choice of high street finance providers, the same can not always be said for small businesses who are now discovering that the easiest way to secure a loan for their companies is often by approaching other lenders in the first instance.

Internet-based brokers are another popular consideration where loan applications are being turned down by banks, or their interest rates and charges are proving to be too big for small businesses to swallow. So for those in a position to allow their company the opportunity to expand, it may be more prudent in the first place to channel valuable time and effort into securing a loan through means other than the obvious high street banks.


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