Small Business Finance

When it comes to raising funds for your business, it can pay to look beyond traditional financing routes such as bank loans and overdrafts. Unplanned overdraft fees are costly and the process of applying to banks for a loan can be time consuming and the rejection rate is high. According to a recent SME Finance report by BDRC Continental, 40% of small firms have been refused credit from their bank.

An increasing number of alternative finance lenders may be more willing to lend than banks as well as having products which are more flexible and better-suited to your business needs. There have been lots of discussions around crowdfunding and peer to peer lending as the key alternative financing options for small businesses in 2015. However, many small business owners may well have personal assets or items in store or at home which could be used to secure finance, free up cash flow or provide a cash injection to help grow the business.

H&T Pawnbrokers offer secured loans to all types of businesses. If you are not sure which assets you can use to secure capital, you may be surprised to find out that there is a wide range of items you can use as collateral for a loan. In fact, it is highly likely that you already own something in these categories and are therefore eligible for a loan right now. H&T Pawnbrokers for example lend on:

• Gold, silver or platinum jewellery
• Diamonds
• Gemstone jewellery
• Luxury and branded watches
• Designer handbags, clothes, shoes and accessories
• Art & antiques
• Cars
• Stock, equipment, vehicles
• Almost anything with a resale value

A secured loan, also known as an asset or pawnbroking loan, is money you borrow which is secured against an asset you own. H&T Pawnbrokers will provide you with an adviser to talk to about your personal requirements. Business owners can access this type of loan online, via a mobile app, or in one of their 190+ stores nationwide.

In general, when applying for a secured loan online, you will need to upload a picture of your asset for a valuation and H&T will arrange a courier who will pick up your item. You may instead prefer to apply for a secured loan in person. You will need to take the asset to a store and allow experts to look at your item and confirm the loan amount. In most cases you will receive the money instantly, although art, antiques and unusual items may require specialist evaluation.

The amount you can borrow varies from company to company, H&T Pawnbrokers will typically lend up to £50,000. The term of a secured loan is six months but can often be extended if payments are up to date. Repayments can be made at any time during that period or at the end of the term, depending on what suits you best.

Here are some examples of how asset loans have been used by H&T Pawnbrokers small businesses:

A West Sussex taxi driver wanted to buy another vehicle, so he used his personal jewellery which was worth £10,000. Once he had bought the vehicle he was able to generate income and repay the loan. Many types of small businesses can benefit from a secured loan. Another customer from the Midlands owns a small jewellery store. Their stock was used as collateral for a secured loan to successfully free up funds for a store extension

Benefits

An asset-based loan has the advantage of being quicker than many other finance options as you will have access to cash straight away which you can invest in your business. No credit check is needed when getting a secured loan as your credit history is not relevant. It is also a flexible way to borrow money as you can pay it back when it suits you throughout the six-month period, with the potential to extend the term if necessary.

Things to consider

Most of the time, H&T Pawnbrokers small business customers pay off their loan and are able to retrieve their assets. However, there is still a risk as if you are unable to repay the loan, you could lose your asset. You should therefore consider the terms and time period of the loan carefully. At H&T Pawnbrokers our staff will always try to help you keep hold of your item if possible. If you are unable to pay back the loan, your items will be sold in order to recover the debt (loan and interest) as well as any admin charges. If there is any surplus from the sale you will get that money back.

If a secured loan isn’t for you, you could still have a look at the items of value you have at home and see whether you could sell them to access capital. One Surrey small business customer recently found some mismatched cuff links at home as well as an old bracelet which hadn’t been worn in over 10 years. Having had them evaluated, she found they were worth £300 which she used for marketing her business.