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The advantages of choosing an alternative lender over your bank

It was reported recently in the Financial Times that Small UK companies continue to struggle to secure affordable bank loans, with The Federation of Small Businesses, a lobby group for the UK’s smallest companies, finding that successful applications for bank loans and other financing had dropped  “precipitously”.

With UK business confidence lowering as recession fears increase, SMEs are feeling the pinch as they see over 50% of bank loan applications rejected.

In fact two-thirds of small companies surveyed by the FSB said they were planning to make some form of investment in their businesses by 2024. Over half did not feel they were aware of the different types of financing available to them.

The FSB commented on this “Many small firms now are in a highly precarious position, carrying debts from the pandemic, with the Bank of England raising the base rate, and with funding options getting scarcer and costlier.”

Loan Application - SME Capital

So, how can we make sure UK SMEs get the funding they need?

Well, when it comes to borrowing money, there are a lot of options out there away from ‘traditional banks’.

Alternative lenders like SME Capital have grown in recent years as more SME borrowers look to find fairer loan terms for Debt Capital to grow their business having become frustrated with traditional banks attitudes and commitment to small businesses.  

There are also a number of advantages for an SME borrower seeking funding from an alternative debt lender.

Lower Fees

Traditional bank loans can include hidden fees and charges that can add up quickly. 
Alternative lenders are more transparent with their fee structure, and will be far more competitive on the rates offered.

Loans tend to be bespoke to the borrower's exact business needs and situation, rather than a general business loan with no flexibility. 

Your current financial situation is important of course, but alternative lenders will look beyond just a credit check. They will get to know the team, the vision, the market, your strategy and opportunities to grow.

Personal Service

It’s this level of understanding and interest in a borrower's business that defines the difference between a bank and an alternative lender. 

Banks tend to be impersonal, and they may not always have time to answer your questions or give you the help that you need. Alternative lenders take a more relationship approach, taking the time to get to know the people behind the business, the leaders, the heart of the company and how it works.

This ensures that the debt loan structure is actually right for the business, advising when it’s perhaps not the right route, but helping the business get prepared for future applications. 

Alternative lenders such as SME Capital are smaller businesses and invested in providing a better level of service experience for borrowers.


Bank loan applications can be time consuming. And over 50% of SME bank loan applications are being refused.

Even if approved, it can take time to more loan funds into a borrowers business account.
Alternative lenders will assign a relationship manager and make sure all the borrowers requirements are met upfront to qualify and avoid lengthy delays in processing.

This pre-qualification process makes sure that if approved, the applications and credit process is quick and thorough. Ensuring you get the funds you need in a good timescale. 

SME Capital Debt Financing

If you are interested in speaking with an alternative lender about your funding needs, we would be delighted to chat with you.  We provide specialised, long-term financial alternatives rather than a general loan that applies to all businesses in the UK. We do not ask for personal guarantees or collateral.

We are here because we firmly believe that our specifically designed finance solutions for UK companies, which will aid in your growth and success, represent a better option.

We are experts in SME lending, therefore every customised loan we make for you will be designed especially with the goal of becoming your long-term finance partner.

Whether you need financing for a refinance, succession planning, M&A, or growth and expansion, we give you the opportunity to thrive without asking you to give up control, equity, or personal assets.

SME Capital uses a cash flow-based approach to lending, offering a multiple of business profitability, specifically EBITDA, as opposed to a loan amount being directly tied to the value of specific assets. We can provide an economic solution to consolidate smaller lenders, or refinance expensive short-term loans, while providing additional working capital for the business.

With repayment terms from 3 to 7 years and flexibility on repayment structures SME Capital is an effective, relationship-led, refinance solution for qualifying businesses in any sector that have been trading more than 3 years with £250,000+ EBITDA.

About SME Capital

SME Capital was founded to support the growing number of SMEs who face difficulty or frustration in accessing capital through traditional methods. We understand the importance of real and trusted relationships in the SME lending market and have dedicated Regional Directors based across the UK.

By combining traditional lending expertise with the latest in data analytics, we are supporting established UK SMEs with their long-term objectives and business ambitions

Financial Times story: 
Small UK companies struggle to secure affordable bank loans | Financial Times (

January 2023

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