Bank loans, like a Natwest business loan, are a convenient way of financing your small business. You can source money to ease cash flow, pay for refurbishments or buy equipment without having to give away equity in your business to an investor.
Taking out a business loan makes your financial planning easy, since you generally know how much you need to pay back each month. However, as an SME you’ll probably need a long trading history to secure a bank loan – unless you’re applying for specialist funding such as Natwest's startup loan – and company assets to use as security if you want a secured loan.
If you need to get hold of money to grow your organization, you’ll certainly need to prove you’re a viable business. But that applies to all lenders – they just have different ways of assessing applications.
Natwest small business loans
Startups and established SMEs can apply for Natwest loans up to £25,000 repaid over a term of between 1 to 10 years. Business owners must be 18 and over, and operating as a limited company, a partnership or a sole trader.
For the bank's startup package your turnover needs to be less than £1 million and your business should've been trading for a maximum of 12 months. Older businesses can borrow between £25,000 to £500,000, and there’s no arrangement fee. However, if you take a payment holiday in the early stages of your term, you’ll be charged interest.
There’s also a longer term variable rate loan available starting at £25,000, with an interest-only option available. The money can be drawn down in stages, and repaid over a term of up to 25 years.
Specialist business loans
Farmers can get a cash boost with Natwest’s agricultural loan to buy machinery or livestock, to develop land, open a farm shop, or set up as a renewable energy source.
Also, community-based businesses providing social care services have access to a range of loans with varying amounts and terms.
Natwest business credit card
SMEs get a credit card when they sign up to a Natwest business account. However, as with all businesses that want to borrow, do keep an eye on changes to interest rates if you're on a variable rate. The annual fee of a Natwest credit card is £32 at the time of writing.
Alternative finance providers
Although there are a few options from Natwest, the application process for most traditional banks is usually pretty long-winded, which could impact your SME’s growth if you need the money quickly. If you can't afford to wait, it's worth looking for alternative lenders – there are plenty of options out there.
Not only that but the big banks have a reputation for their tough stance on small business lending, which can be off-putting for many new and growing SMEs. Banks still lend to entrepreneurs, but there’s now a blossoming market of alternative finance (altfi) providers, offering loans on more flexible and convenient terms.
One of these providers is Fleximize, which was set up to help SMEs thrive through easy-to-access financing. The lender offers busy business owners a quick and easy application process, and a personalized service all the way from loan application, right through to the last repayment.
Compared to the banks, the lending process with an Atlfi provider will typically be less bureaucratic, freeing you up to focus on day-today business.
Another source of information about small business lending is The Ultimate Guide to Business Funding.