By Phil Ellerby

Finding the funds to grow your business is not always easy.

In recent years, tighter borrowing rules have meant that lending money from banks continues to be difficult (but not impossible).

Fortunately, there are also several alternative providers of business loans in Yorkshire who are willing to back the growth plans of small and medium sized businesses in our region.

Whether you’re in need of business loans to start a business, a start-up looking to expand or an established business that’s keen to grow; there are alternative lenders who can provide the capital investment you need.

Take a look now at some of the best alternative business loans Yorkshire can offer;

Business Enterprise Fund

What is it?

The Business Enterprise Fund is available to start-ups and established businesses in North and West North Yorkshire that have been refused finance from other lending sources.

Although four different business loans are available, they must be used for the purpose of starting a new business or expanding an existing business. Payment is also required within 5 to 7 years.

What business loans do they offer?

Start Up Loans: Unsecured loans from £500 to £25,000 are available at an interest rate of 6.2% through the Start Up Loans Company, a Government-financed scheme designed to fund and mentor pre-start, start-ups and young businesses.

These are for businesses who have been trading for up to 24 months and include a five-year repayment schedule.

Small Loans to Businesses: Businesses who are unable to secure finance through a bank can lend from £500 to £25,000 in an unsecured loan at interest rates between 19.8% – 23%.

Available to any age business in all sectors, including retail, these business loans can be used to secure 100% of the funding need.

Interest-only payment periods and a seven-year repayment schedule can be negotiated, if required.

Medium Loans to Businesses: Businesses that are deemed to be in a riskier category can apply for unsecured loans between £25,000 to £50,000 at an interest rate between 12% and 19.8%.

These loans can be used to fill the gap when other lenders refuse to offer the full amount needed. This money can be used for any business purpose, including improving cash-flow.

Payment terms of up to seven years and interest only payment periods are available.

Large Secured Loans to Businesses: Personally tailored secured loans from £50,000 to £150,000 can be arranged at interest rates of between 12% to 19.8%.

Businesses with an adverse client history will be considered, with repayment terms of up to seven years for asset procurement. BEF will also provide expert support and advice, if required.

Find out more:

Business Enterprise Start Up Loan

What is it?

A business loan scheme offered by the European Regional Development Fund, it is aimed at assisting people aged 18 and over who are either looking to launch a business or have recently started to trade and are still in the two-year start-up phase.

Assistance is available in all areas of the North East of England, including North and West Yorkshire and the Humber region.

What business loans do they offer?

This stream of Yorkshire finance offers unsecured business loans of £500 to £25,000 available at an interest rate of 6.2%. Although there is a five-year time frame for repayment, successful applicants will also receive support from experienced business mentors.

Find out more:

Finance Yorkshire – Business Loans

What is it?

Start-ups and established SME businesses operating in a manufacturing or service sector within the Yorkshire or Humber region can apply for unsecured business loan finance.

To apply, your business must be revenue generating, have growth potential and a gap in funding that cannot be met by conventional providers.

If your turnover is below £43m and you employ fewer than 250 staff, these business loans can be used to buy premises, plant and machinery, intangible assets, stock or improve the chances of international trade.

What business loans do they offer?

A gross interest rate of 12% is payable on all loans, although rebates may be offered at the discretion of the fund.

Early-stage business loans: A company with less than three years’ trading history can apply for between £15,000 to £50,000. Loan rebates of 2% are available, resulting in a net interest rate of 10%.

Established business loans: If your company has a minimum of three years’ trading history you may be eligible for a loan from £15,000 to £75,000. Loan rebates of 4% would result in a net interest rate of 8%.

Established and profitable business loans: If you have a minimum of five years’ trading history, with the last three years all in profitably, the loans available range from £15,000 to £250,000. Loan rebates of 6% are available, resulting in a net interest rate of 6%.

Loans cannot be used for re-financing existing commercial borrowings.

Find out more:

Finance Yorkshire – Equity-Linked Investments

What is it?

Aimed at start-ups, early-stage or growing SMEs in the Yorkshire and Humber region, business loans and equity finance is available for business launch, expansion, development capital or relocation.

To be eligible, you must have growth potential, be revenue generating, employ fewer than 250 staff, have a maximum turnover of £43m and operate in a manufacturing or service sector.

Businesses that operate in retail, property development or sport and leisure sectors cannot apply. Neither can businesses which are failing.

What business loans do they offer?

Mezzanine loans are available from £100,000 to £1 million.

Equity investments from £100,000 to £2 million.

Joint equity-linked packages from £100,000 to £2 million.

Loans with Profit Participation from £400,000 to £1 million, 10% fixed interest or 10% of net profit – whichever is higher.

All loans will have their interest rates decided on an individual basis and they must be repaid within five years.

Find out more:

Seedcorn Finance Loans

What is it?

Offered by Finance Yorkshire, this funding is available to early-stage technology-based SMEs in the Yorkshire and Humber region and can be offered in the form of a business loan or equity finance.

To qualify, your business must be developing unique technological content which is patent or copyright protected and beyond the research stage.

As well as receiving financial support, your company will receive assistance with recruiting senior team members, developing market entry strategies and finding additional investors or partners – if required.

What business loans do they offer?

Businesses which can demonstrate high growth potential will have access to convertible loans and equity finance deals ranging from £15,000 to £780,000 in return for a significant minority stake.

Find out more:

Start-up Loans North and West Yorkshire

What is it?

A personal loan style funding initiative for entrepreneurs aged over 18 wishing to start up a new business in North or West Yorkshire.

This loan can be used to fund any business start-up costs, but applicants must pay it back within 3 to 5 years.

What business loans do they offer?

The minimum loan amount is £500 but you can borrow anything up to maximum amount of £25,000. Typically, they loan sums of around £2,500.

Payments are subject to a fixed annual percentage rate (APR) of 3% plus the Retail Price Index (RPI) which currently stands at 3.5%.

Find out more:

Enterprise Ventures SME Loans

What is it?

Enterprise Ventures focuses on offering business loans to SMEs in the North West, Yorkshire and Humberside region.

Loans between £15,000 and £1million are available for most purposes, including stock acquisition, purchasing assets, improving operations and business development.

What business loans do they offer?

Standard ‘Business loans’ starting from £15,000 to £1m are available for a variety of purposes.

Specialist ‘Venture Capital’ loans between £30,000 up to £2m are on offer and come with dedicated business expertise and advice.

To qualify for funding, your business will usually need 3 years of trading history, a current or anticipated £100,000 operating profit and around £1m turnover.

Find out more:

How’s Business

What is it?

Whilst business loans can also be secured through traditional lenders such as banks, there are a number of online tools which will allow you to access a whole host of revenue streams.

An online funding finder for business loans, How’s Business searches for the Yorkshire finance providers which are best suited to your type of business or sector.

What business loans do they offer?

With access to range of loans available directly from the government, local authorities and other bodies, simply enter the loan amount you require and your business details – they’ll then recommend specialist lenders to approach for funding.

Find out more:

Responsible Finance

What is it?

A social enterprise which re-invests profits to deliver economic and social benefits, this initiative puts businesses in contact with providers of fair and affordable loans and finance.

It is especially for businesses, people and social enterprises that traditional mainstream lenders are unwilling to support.

What business loans do they offer?

Previously known as the Community Development Finance Association (CDFA), Responsible Finance represent a national network of responsible lenders who offer business loans ranging from £100 to £500,000 based on your ability to afford the repayments.

Find out more:

Tax Smart

What is it?

At Northern Accountants, we know exactly how important cash flow is to your business – a lack of it can be the difference between success and failure.

That’s why we now offer a free no-obligation consultation to help manage your finances more effectively.

Having used this technique to free up thousands of pounds for our clients, we like to think of it almost as our own version of a business loan.

What’s on offer?

By taking a view of all the taxes that can affect your business, now and in the future, we can help you to take advantage of available tax relief opportunities to free up cash for reinvestment.

Find out more:

Visit our Tax Planning page now or get in touch to arrange your free consultation.