Improve Your Chances When Applying For A Business Loan: Same Day Approval

Securing the right kind of finance for your business quickly and with minimum disruption to everyday operations can be crucial. Small and medium sized businesses (SMEs) in the UK often need access to exterior funding to cover unexpected costs, invest in new opportunities or simply to manage cash flow. But waiting the period of many weeks that some traditional lending methods take for approval can often mean missing time-sensitive deadlines or costly downtime. Which is why so many SMEs have been turning to alternative online lending options such as same-day loans to keep pace with business demands.

However, although the application requirements for a same-day business loan are a lot less stringent than they are for loans from traditional lenders, such as the banks, there is still no guarantee of success. All financial lenders will assess various factors before approving a same-day loan. And same-day funding business loans​ are unsecured, meaning they are not tied to any physical asset, so lenders tend to look at the financial viability of the business to assess suitability. What this does mean, however, is that there are various things businesses can do to improve their chances of a successful application.

How To Improve Chances Of A Successful Application

Approval decisions for same-day business loans are made quickly, which means businesses need to demonstrate they are viable and secure in a few key metrics:

Maintaining A Good Credit Score

A business credit score is usually the first thing a lender will look at, and the higher the score, the greater degree of reliability and lower risk is attached to the application. Businesses can check their credit score with various online credit agencies to assess their current standing. This can then be boosted by paying outstanding invoices and limiting credit applications (especially over short periods). A study by UK Finance found that 30% of SME loan rejections were due to poor credit scores, so ensuring a positive score can significantly boost approval odds.

Clear And Up-To-Date Records

Lenders will want to see records that indicate a stable financial history before approving funding. That means ensuring that cash flow statements, profit and loss accounts and bank statements are up to date. Ideally, these should highlight a consistent income and growth to reassure lenders that repayments can be made. All tax filings need to be current, and any outstanding amounts paid.

Select The Right Lender

Traditional lenders are much less inclined to approve these kinds of fast loans, so it makes more sense to look at alternative finance options. According to the British Business Bank, nearly two out of five SMEs used alternative lenders in 2023, owing to the slower pace of bank lending. Even if using an alternative lender, businesses should always look for clear approval criteria before submitting an application.

Apply For The Correct Amount

Businesses need to apply for an amount that matches their business needs. If they do not calculate a realistic loan amount, they are more likely to be turned down. UK Finance studies show that loan approvals are 20% higher when businesses apply for an amount in line with turnover.

Have A Strong Business Plan

A strong business plan that clearly outlines how funds will be spent will also increase chances of approval. Revenue growth projections should be clearly outlined, and evidence should be provided of any past and current business success.

To find out more about business loan same-day approval and other alternative finance options, get in touch with our team here at Century Business Finance.

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