Helping Brokers Overcome Lending Hurdles

SME finance isn’t what it used to be. Bank lending to small businesses fell by £14 billion in 2023, and approval rates dropped to their lowest since 2014 (Bank of England). Mainstream lenders are sticking to their rigid models, and for businesses that don’t fit the mould? It’s getting harder to access the funding they need.

Brokers are stepping up, helping clients navigate this tougher lending landscape. But knowing where to place a deal, and how to get it over the line, matters more than ever. At FOLK2FOLK, we see firsthand where deals hit roadblocks and, more importantly, how brokers can sidestep them.

Three Common Roadblocks

1. The ‘Slow Yes’

A delayed decision can be just as damaging as a ‘no.’ When a business owner spots an opportunity, they need answers fast.

How to overcome it:

• Know which lenders can provide indicative terms within 24 hours.
• Work with lenders who prioritise direct access to decision-makers and can provide ‘on-demand’ credit reviews and decisions, cutting out unnecessary delays.
• Ensure clients have the right documentation ready to avoid unnecessary back and forth.

2. Complex Cases That Don’t Fit the ‘Box’

Most lenders love a clean, simple case but in reality, it’s not always straightforward. Borrowers with multiple, diverse or unusual income streams, complex security, or unconventional structures often struggle to get a ‘yes’.

How to overcome it:

• Work with lenders who are willing to see the merits of each individual deal. Lenders who can see the bigger picture and take a holistic view of the people, the business idea, the security, and all available income streams.
• For clients with complex property structures (e.g., multiple titles or trust-held assets), identify lenders with a reputation for navigating this type of complexity.
• Choose lenders offering flexible structures like interest retention periods to support cash flow particularly for new businesses.

3. Legal & Structuring Hurdles That Slow Things Down

Even when a loan is approved, the legal and structuring process can stall a deal. Multiple titles, trust ownership, or unique security arrangements can lead to unnecessary delays if not handled properly. How to overcome it:

• Engage with lenders who are experienced in navigating legal complexities.
• Ensure early conversations between the lender and solicitors to avoid surprises.
• Work with lenders known to proactively case manage to keep deals moving.

Getting Deals Over the Line Together

For brokers, the right lender isn’t just one that says ‘yes’, it’s one that’s committed to moving fast, understands the unique nature of each deal, and collaborates to put a deal together.

At FOLK2FOLK, we:

• Provide indicative decision and costs within 24 hours.
• Organise on-demand credit reviews as required to keep the deal moving
• Work with Brokers to make the deal
• Typically provide funding within weeks.

Need to place a deal fast? Talk to us first:  en*******@*******lk.com / 01566 706960