Allica Bank’s Regional Relationship Managers set to help SMEs avoid funding rejections
Businesses across Yorkshire are being given crucial advice to help improve their chances of success when applying for funding, after research from Allica Bank shows over two thirds of local businesses have had funding applications rejected.
The research conducted by Allica Bank found that 69% of Yorkshire businesses surveyed have had previous funding applications declined and more than a third (35%) say they aren’t confident their funding needs will be met by a single lender – doubling or even tripling the risk of funding rejections.
Given that almost half (46%) of businesses said they may be looking for funding in the next 12 months, Katie Roberts, Allica Bank’s Business Relationship Manager in the region, provides the following Top Tips for businesses applying for funding:
- Be prepared: have up-to-date financial accounts and business bank statements ready to share.
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Be Transparent: complete transparency can improve your credibility in the eye of the lender. Provide any additional information you think might help the lender assess your application upfront. Any gaps could only lead to more questions. If in doubt, the more information the better!
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Be thorough: Not all loans will require you to share a business plan, but consider submitting one anyway to really tell the story of your business and increase your credibility.
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Be timely: The earlier on in the process you provide this information, the quicker you could get a decision. Even better, have it ready to share on the day you submit your application
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Be complete: Information to consider sharing: financial accounts; bank statements; business plan; evidence of any cash deposit; a summary of whether your business has been affected by COVID-19, and, if relevant, how it has coped and dealt with the effects of the pandemic; information on the asset/property you are borrowing against (if applicable); and details of any ongoing debt/repayment obligations.
Katie says ensuring that funding applications are properly constructed with the right data and business plan will help firms to maximise their chances of success: “As the economy continues to recover from a difficult pandemic period, lenders are becoming ever more conscious of risk.
“To maximise the chances of a successful application, provide as much information on your business, its future and how you will use the funding as possible. It gives your lender a greater understanding of the business and in turn a clearer picture of risk factors. Doing so from the outset can really strengthen your position, too, as it can set a lender’s mind at rest that there’s nothing to hide.
“If your bank offers you a relationship manager, work closely with them so they can get to know you and help you prepare the relevant documentation. All of this can help improve your chances of a quick decision.”
Katie added that giving the bank as much time to assess and review will also improve success rates: “If you know your business might need funding down the line, connect with your relationship manager as soon as possible to talk about your options. Rushing an application through is rarely beneficial to either party, so teeing up the application and allowing enough time for any unexpected delays will ensure the bank feels like it is making an informed decision without needing to hit a tight deadline.”
