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Getting the right deal could free up more cash where you need it

For many businesses, their borrowing is a patchwork of products. Interest rates have been high which makes borrowing expensive, and prudent business owners have been careful not to overstretch themselves by borrowing more than they need. 

At Swoop, we also advocate looking at some of the niche and specialist borrowing products on the market which could suit the needs of businesses better than a traditional unsecured loan. 

With interest rates falling, however, consolidating all those debts into one loan at a lower rate can achieve two things: first, it can simplify your outgoings by putting all your debts onto a single line of the accounts; second, it could save you money and free up capital for other projects. 

Ed Brown, Commercial Funding Manager at Swoop, says that consolidating outstanding debt within a property purchase (or remortgage) is becoming more attractive as the market shifts: 

“Lender appetite has really bounced back recently with some banks pledging to increase the number of commercial mortgages they agree by as much as 20 percent. Even during the uncertainty of the last couple of years, property ownership has made sense for some, but as interest rates go down, we are likely to see more businesses exploring this as an affordable and desirable option.”

Lower interest rates affect the whole market, not just commercial mortgages. And with the boom in challenger banks and digital first products, the battle for market share is getting more fierce – with lenders often prepared to squeeze their margin rather than lose a potential customer. For businesses wishing to consolidate existing borrowing into a single loan product, this is good news: there are lenders willing to be flexible and offer competitive prices to customers.

What are the advantages of restructuring your debt?

First, see much more clearly how much debt is costing your business. This enables you to make plans, much more easily, knowing exactly how much money he will have in your account.

Restructuring your debt with a lower interest rate will also enable you to save money, or you might opt to repay over a longer term – which will give you better cash flow day-to-day. 

If you make the right decision, you can find yourself with simplified accounts, and more money in your pocket.

Ed Brown says:

“It pays to know your options. The fact is that there are more lenders looking for your business than ever before. You can leverage their appetite to push for a lower interest rate, longer loan term, or reduced fees.”

If you are thinking about restructuring your borrowing but aren’t sure where to start, get in touch: Swoop’s friendly experts will help you reduce your costs, get the best deal possible and achieve your financial goals.

Everything you need to know about the budget – at a glance

In what is likely to be his last budget, the Chancellor gave us a statement that was business-lite, preferring to concentrate his limited fiscal headroom on initiatives that will reward individuals (better known as voters). The few benefits and incentives for UK SMEs were either minimal, extensions of extensions, or relied on projections that may not come to pass.

Executive summary:

The Spring ‘24 budget was ‘Going for Growth – the Sequel’, in which the Chancellor offered a repeat of his Autumn tax cut to individuals, extended long-standing alcohol and fuel duty freezes, maintained the windfall tax on energy producers, and revisited the Government’s existing reliance on investment zones and cash incentives for targeted industries to jump start productivity.

It remains to be seen if these initiatives can deliver the growth that the UK needs, as small and medium sized businesses were largely left out of the budget equation – a major error when 99.9% of the business population is concentrated in these groups – leaving many business experts saying that this budget was more political theatre than real economic policy, a carrot for potential voters, and not a realistic plan to rebuild the nation’s productivity and prosperity.

Why is this?

The Chancellor made great show of cuts to personal National Insurance Contributions, raising the threshold for the clawback of Childcare Benefits, championing innovation zones, lifting the VAT threshold and promising to expand full expensing to cover leased assets.

The reality is less rosy: few of these measures will make life easier or better for UK SMEs. Cuts to personal taxes do not necessarily make workers work longer or harder. Cutting childcare benefit penalties is unlikely to encourage many parents to return to work. Innovation zones generally favour large corporations. The lift in the VAT threshold was too small and will still be almost £20k short of where it should be if it had matched inflation since 2017. The expansion of Full Expensing will only occur when fiscal headroom is available – which could be never.

All in all, there were few things to cheer small business owners here. The rise in NLW which lands in workers’ pockets in April, the loss of business rates relief for 220,000 businesses, inflation still twice as high as the BOE target and the problems of Brexit still unfolding are more likely to have SMEs attention.

Kevin Fitzgerald, Managing Director at recruitment firm Employment Hero summed the budget up well: “No rabbits under the Chancellor’s hat today, in what was a frustrating Budget for leaders of small and medium sized businesses. Whilst it is right that the Government focuses on initiatives that will help individuals and household budgets during the current cost of living crisis, the Chancellor has provided little support for SMEs by way of meaningful tax cuts and investment for growth.”

His comments were echoed by Bruce Cartwright. Chief Executive, The Institute of Chartered Accountants of Scotland. “The Chancellor has again failed to offer enough support for small and medium sized businesses (SMEs), which make up 99.9% of UK businesses and are the life blood of the economy.”

Meanwhile: GDP per capita has hovered around 1% for most of the last 15 years…

…and is set to be negative until 2025. Which leaves strong doubts over whether yesterday’s budget can deliver the growth the UK needs.

If you want to learn more about the spring budget 2024, watch our insightful webinar where our founders discuss the impact this budget will have on SMEs.

Understanding the dynamics of credit scores can often feel like navigating through a maze, with each turn influenced by various financial decisions and behaviours. For financial advisors and brokers, you’re expected to demystify this journey for your clients, providing them with the clarity and guidance needed to maintain or improve their financial health.

Here at Swoop, we recognise the importance of a healthy credit score in securing loans and funding options. We’ll help identify the common reasons behind a drop in credit scores, underscoring the pivotal role such insights play in crafting effective investment strategies. Through Swoop Funding’s lens, we aim to illuminate the path for finance professionals, enabling them to leverage our platform’s unique opportunities to benefit their clients.

Let’s unpack the factors that can influence credit score fluctuations and how understanding these can be a game-changer in the financial landscape.

What makes up your credit score?

Your credit score is composed of five separate categories with different weights. Some affect your score more than others.

1. Payment history (35%)
2. Amounts owed (30%)
3. Length of credit history (15%)
4. New credit (10%)
5. Credit mix (10%)

Alt text: pie-chart-showing-the-five-FICO-scoring-categories-and-percentages

6 Reasons why your credit score has dropped

A credit score is a dynamic metric that reflects your financial reliability. Its fluctuations can impact your ability to access various financial products. For clients navigating the complexities of their financial journey, understanding the reasons behind a credit score decline is crucial.

This knowledge not only empowers them but also enables financial advisors and brokers to provide targeted advice and solutions. We will explore the following common factors contributing to a decrease in credit scores:

• You have late or missing payments
• You recently applied for a mortgage, loan, or new credit card
• Your credit utilisation has increased
• One of your credit limits decreased
• You closed a credit card
• There is inaccurate information on your credit report

1. You have late or missing payments

Implications: Payment history is a large component of your credit score (35%). Late payments not only reflect poorly on your financial responsibility but also signal risk to future lenders. The impact of a late payment can vary based on how late the payment is, how often you’ve been late, and how recent the late payment was.

Practical Steps: Set up automatic payments for regular bills to avoid oversight. If you face financial hardship, contact your creditors before a missed or late payment to discuss possible adjustments to your payment schedule or temporary relief options. Making a payment before 30 days past due can prevent it from being reported to the credit bureaus.

2. You recently applied for a mortgage, loan, or new credit card

Implications: Each hard inquiry from a credit application can slightly reduce your credit score. The hit of a “new credit inquiry” can stay on your profile for two years before no longer showing as new. The rationale is that seeking new credit could indicate financial instability or an increased risk that you will overextend yourself.

Practical Steps: Only apply for new credit when necessary. Use lenders’ pre-approval processes to gauge your eligibility for credit cards or loans without impacting your credit score. Space out applications every two years if possible to minimise the cumulative impact of hard inquiries. This includes auto loans, personal loans, and credit cards.

3. Your credit utilisation has increased

Implications: Credit utilisation—how much credit you’re using compared to your total available credit—is also a pivotal factor, illustrating your dependency on credit. A sudden spike in utilisation can alarm creditors, suggesting a change in your financial stability or risk profile.

Practical Steps: Pay more than the minimum payment on credit cards to gradually reduce balances. If possible, make multiple payments throughout the month to keep balances low. Monitor your credit card statements closely and adjust your spending habits to keep utilisation in check.

4. One of your credit limits decreased

Implications: Creditors may lower credit limits based on their risk assessment, which can unfavourably affect your credit utilisation ratio. Sometimes, this happens without warning and for reasons outside your direct financial behaviour, such as economic downturns or changes in the lender’s policies.

Practical Steps: Regularly review your credit limits and speak with your creditors if you notice a decrease. Maintaining a good relationship with them and demonstrating financial stability can sometimes persuade them to reconsider their decision. Alternatively, paying down balances can help manage your utilisation ratio.

5. You closed a credit card

Implications: The rule of thumb is to never close a credit card because it hurts more than it helps. Closing a credit card account reduces your overall available credit and can shorten your credit history, particularly if you close an old account. This can inadvertently increase your credit utilisation ratio and remove a history of on-time payments from your credit report.

Practical Steps: If you must close an account, try to pay down balances on other cards to mitigate the impact on your utilisation ratio. Also, keep an eye on credit cards you haven’t used in a while, the issuer may close your account for you which can have the same effect as closing a card yourself.

6. There is inaccurate information on your credit report

Implications: Errors on your credit report, such as incorrect late payments, fraudulent accounts, or identity theft, can unjustifiably lower your credit score. These inaccuracies can stem from clerical errors, misreported information, or more sinister activities like fraud.

Practical Steps: Review your credit reports regularly from major credit bureaus. If you find inaccuracies, file disputes with each bureau online or by mail, providing documentation to support your claim. Follow up on your disputes to ensure corrections are made.

What is considered a good or bad credit score?

Generally, good credit is anything over 700. Average credit is between 600 and 700, anything below 600 is poor but this can vary.

• A score of 670 to 739 is considered “good,” indicating a borrower that lenders are likely to view as dependable.
• Scores from 740 to 799 are deemed “very good,” showing better lending terms and lower interest rates are likely.
• A score of 800 and above falls into the “exceptional” category, which can lead to the most favourable borrowing terms.

A credit score below 670 begins to enter the “fair” or even “poor” categories, which can make it more difficult to qualify for favourable credit terms. Scores in these lower ranges might lead to higher interest rates or the need for a co-signer when applying for loans.

How to improve your credit score

Improving your credit score is a strategic process that requires consistent effort and financial discipline. By understanding the factors that influence your credit score, you can take targeted actions to enhance it. Here are key strategies to consider:

1. Pay your bills on time: Your payment history is a significant factor in your credit score. Late payments can negatively affect your score, so ensure you pay all your bills, including credit cards, loans, and utilities, on time. Setting up automatic payments or reminders can help you stay on track.
2. Reduce your credit utilisation ratio: This ratio measures how much of your available credit you’re using and is a critical factor in credit scoring models. It’s recommended to keep your credit utilisation below 30% of your total credit limit. You can achieve this by paying down existing balances and avoiding large purchases on credit.
3. Keep old credit accounts open: The length of your credit history contributes to your credit score. By keeping older accounts open and active, you demonstrate a longer history of responsible credit use. Closing old accounts can shorten your credit history and potentially lower your score.
4. Limit new credit inquiries: Every time you apply for a new line of credit, a hard inquiry is made to your credit report, which can temporarily lower your score. Limit the number of new credit applications, especially within a short time frame, to avoid negative impacts.
5. Diversify your credit mix: Having a mix of credit types (e.g., credit cards, auto loans, and mortgages) can positively affect your score, as it shows you can manage different types of credit responsibly. However, it’s not advisable to take on new credit unnecessarily, just to improve your credit mix.
6. Check your credit reports for errors: Inaccuracies on your credit reports can negatively impact your score. Regularly review your reports from major credit bureaus for any errors or discrepancies and dispute them promptly to have them corrected.
7. Seek professional help if needed: If you’re struggling to manage your debt or improve your credit score, consider consulting with a reputable credit counselling service. They can offer personalised advice and help you develop a plan to improve your financial situation.

How Swoop can help

Throughout this article, we’ve explored the dynamics of credit scores, their impact on financial opportunities, and strategies for improvement. For financial advisors and brokers, integrating Swoop Funding into your toolkit can significantly enhance your ability to support clients in these areas.

Swoop offers innovative financial solutions, from loans to savings options, tailored to protect and grow businesses. By leveraging our smart matching technology and accessing expert advice, you can navigate the complexities of finance with confidence. Hit the “get started” tab and unlock these opportunities to help drive your clients towards financial success.

Getting to grips with your R&D tax credits can unlock funding solutions for the whole of your business

R&D tax credits seem like a niche concern, but for businesses that are seeking to make a claim based on the work they have done, Swoop’s R&D team could mean more than just a quickly-completed application. It’s also a great place to access the expertise of the whole company to help improve your cash flow.

Why does Swoop have an R&D team?

In the early days, Swoop referred customers to accountants and to R&D claims specialists. But we began to realise that accountants were growing less keen to handle R&D, while the specialists weren’t able to grasp the benefits of looking at a customer’s wider funding needs. Customers also voiced their frustration at the time that it took to get claims to the submission stage; as a tech business, we knew we could improve turnaround times and make the whole process less painful.

Swoop’s in-house team was born. By offering an R&D tax credit service as part of our integrated offering across business funding, grants, and equity finance, we knew we could work more closely with a customer as we would have a much broader view of their overall needs in mind …and customers could find solutions in one place. As for the speed of claims, we aim to have your application submitted within two weeks of receiving the documentation we need.

How does Swoop handle your claim?

Step one: Swoop will get a full understanding of your business activities with the aim of maximising your claim. We’ll take into account the latest guidelines and HMRC’s enhanced due diligence

Step two: Swoop will connect you to other sources of funding that your business may require: we have over 500 grants on our database at any given time, plus the full market of finance products and a network of VCs and investors looking for opportunities.

Step three: Your business finances are boosted with the capital it needs to grow and you have an unrivalled range of financial products and services at your fingertips to take you into the future.

Case study #1: Swoop speeds through a claim worth £30,000

A food and beverage business approached Swoop on 30th of January 2024. Swoop’s experts explained that they could still claim tax credits for the year 2020-2021 due to the two year limitation period.

If the deadline had been passed, the client would not have been able to claim back £30,000 from HMRC.

Swoop compiled the calculation and technical report within 8 hours, and submitted the claim hours before January 31 deadline. On 26th of February, the customer received confirmation that the claim had been processed and that the money would be credited to their account.

Swoop is now preparing documents for the customer’s 2021-2022 and 2022-2023 claims.

Case study #2: Attention to detail boosts the customer’s claim

Another food and beverage client, with a history of successful R&D claims, asked Swoop to review their calculations. The team found almost £80,000 of additional claimable costs.

While the customer’s 2021 claim was still under review by HMRC, the 2022 claim was passed thanks to Swoop’s more robust, transparent and compliant application.

Swoop’s additional service came into play when the customer needed extra funding support. An R&D advance gave the customer a cash injection in advance of the HMRC payout.

At Swoop, we don’t just provide an efficient R&D service; we’re also here to support businesses across all of their needs.

By going through Swoop, you get:

• A claims service integrated into a wider funding offering
• Full access to grants based on your sector and location
• The full suite of Swoop solutions to your business’s needs
• A likely improvement in your credit score, giving you more choice over your funding options
• Access to R&D advances from our approved lenders who can lend up to 80% of the payout against current or future claims
• Assistance in structuring your financials to maximise your claim
• Quick turnaround time – just two weeks from Swoop receiving the documents, we will submit the claim to HMRC.

If you have ambitions for your business to deliver maximum profitability, become more financially efficient or need to boost your cash flow, Swoop can help you make it happen. Speak to an R&D expert today.

If you’re looking for investment in your business, whether you’re just starting out or planning to expand, an angel investor is one potential option to explore.

Beyond simply investing in your business, angel investors can also bring a wealth of experience that could prove invaluable to your business.

This guide explains everything you need to know about finding angel investors for your business.

What are angel investors?

What should you look for in an angel investor?

How to find angels

How to decide which angel investor is right for your business

Get capital from family & friends

A good place for an early-stage business to start might be to ask any friends or family members if they are willing to invest in your company or loan you a lump sum. A loan might be easier to set up as all you need to do is agree to repay it over a set term, with interest added on top. Interest rates can be significantly lower than if you borrowed from a bank or another lender, and it can be a quicker process too.

Alternatively, if you go down the investment route, your friends or family would hold a stake in your company. This means you wouldn’t need to repay them anything as your investors would only get money if your company becomes profitable. On the flipside, if your business is not successful, your investors could lose money.

Whichever option you choose, it’s crucial to draw up an official written agreement so that there are no misunderstandings. If you go for the investment option, it’s important to highlight the risks, while if you’re borrowing through a loan, you need to state what happens if you can’t make your repayments. 

Seek private investors

Private investors are individuals who are willing to invest their own money into your business. In return they usually receive shares in the company and can have a say in how its run. 

There are two main types of private investors – angel investors and venture capitalists.

Angel investors, or business angels, are high net worth individuals who have the money to invest into a business. They usually prefer to invest in startups and early stage businesses.  However, they will need to be confident of your business’ success, so you will need to have a solid business plan and be able to show that your business has high growth potential. 

Read more: our guide on finding angel investors.

Angel investors are usually experienced entrepreneurs which means that as well as offering funding, they can also offer their own skills, expertise and contacts which can be invaluable to a new business. 

Venture capitalists, on the other hand, don’t invest their own money, but that of investors. They do this by setting up a fund that is used for others to buy shares in the company. Although they can help startups, they usually invest in businesses that are already established and are looking to expand or launch a new product or service. 

Venture capitalists usually invest larger sums compared to angel investors – a few million in some cases. The return on investment is typically much higher too. 

Read more: our guide on finding VC funding.

Contact similar businesses or schools in your field

If you know people in a similar line of business to yours, it can be worth contacting them to see if they know of anyone who might be interested in investing in your company. 

Be aware, however, that this can be quite a drawn out process, as you might need to contact several people or even attend industry-related events to network and expand your pool of potential investors.  

Another option is to look at schools offering diplomas or degrees in your area of work. Some of the professors who teach there might be willing to put you in touch with some of the guests they invite to speak on certain subjects. If they can set up an introduction for you, this could be another opportunity for investment.

Look to crowdfunding

Crowdfunding is another potential option to explore. It enables businesses to collect money from a number of people (‘the crowd’) via online platforms. There are several different types of crowdfunding platforms, as outlined below:

Reward-based crowdfunding

With this type of crowdfunding, investors are asked for relatively small sums of money and in return, they receive a reward. This is often a product or service offered by the business. For example, if your business makes clothing, everyone who invests a certain amount might receive a branded t-shirt. Rewards could also include exclusive invitations to events. 

Donation-based crowdfunding

In this case, any money given is not expected back. Donations are usually for relatively small amounts and the money generated is usually for a project. For example, it might be to give to families who have experienced a loss or a community that needs medical support. 

GoFundMe is an example of a donation-based crowdfunding platform, where the family of a person diagnosed with cancer, for example, might start a campaign to raise money for specialised treatment. 

Debt-based crowdfunding

Debt-based crowdfunding is also known as peer-to-peer lending. Here, you receive money in the form of a loan from a large number of private investors, which could be individuals or businesses. 

Peer-to-peer lending matches those with money to lend with those who want to borrow. Because it removes the need for financial institutions such as banks, interest rates tend to be better for borrowers, while investors generally earn a higher return than they would through a regular savings account.

Equity crowdfunding

With equity crowdfunding, investors usually receive shares in the company in return for their investment. This means they receive a share of the profits if the company performs well. Investment sums tend to be in the thousands but it can be a riskier option as there is no guarantee on return.

If you’ve decided to fulfil your dream of running a pub or simply fancy a career change, you’ll likely need to borrow funds to help cover the cost of setting up your business.

This blog explains all you need to know about financing a pub.

What is pub finance?

Pub finance is an umbrella term that covers the different financial solutions often needed to get your pub business up and running. Pub finance can be used to cover dips in cash flow, pay for inventory, renovate an existing premises or buy a new one.

In some cases, funds could be transferred to your bank account within a few hours. Repayment terms depend on the type of finance you’ve applied for. Unsecured pub loans, for example, need to be repaid over one to seven years, while pub mortgages can be repaid over a period of up to 30 years.

What is a pub mortgage?

A pub mortgage is a type of commercial mortgage that’s used to buy or refinance a pub, nightclub or bar.

Pub mortgages are similar to regular commercial mortgages in that you borrow a lump sum to repay over many years. But lenders will generally have specifications about what type of business they are prepared to lend to, which means pub mortgages can be harder to qualify for.

You’ll need a pub mortgage if you want to buy the pub premises outright so that you have complete control of the business. This differs from leasing a pub, where you still run the business, but lease the premises from a leaseholder – often a brewery.

How do pub mortgages work?

As with all mortgages, a pub mortgage must be secured against your property, or even multiple properties. You repay the amount borrowed in regular instalments over a term of between five and 30 years. Repayments are usually monthly, but some lenders will let you pay weekly or quarterly. Interest rates can be fixed or variable.

Pub mortgages can be on an interest-only or capital repayment basis.

• If you choose an interest-only mortgage, you’ll only need to repay the interest, resulting in lower monthly repayments. But at the end of the term, you’ll need to pay off the original amount borrowed, so you’ll need a suitable repayment plan in place.
• With a capital repayment mortgage, you pay off a portion of the capital, plus interest, each month. At the end of the term, there will be nothing left to repay, and you’ll own the property outright.

Who can apply for a pub mortgage?

You can apply for a pub mortgage whether you’re an individual, a partnership, a limited liability partnership or a limited company. You must be at least 18 years old.

You might apply for a pub mortgage to buy a new property or refinance an existing one.

Am I eligible for a pub mortgage?

Pub mortgage applications will be individually assessed. Whether you’re eligible will depend on several factors, including:

• Your affordability: Lenders will want to see that you can comfortably afford your repayments. To do this, they will examine your trading history and accounts. They will also look at existing levels of debt.
• Your business plan: A robust business plan that outlines projected earnings and a budget for costs will work to your advantage. This is particularly important if you don’t have a trading history.
• Your business credit history. A good credit score means you’re more likely to be accepted and secure competitive interest rates.
• Your experience: Many lenders will be looking for at least two to three years’ experience in the hospitality sector, ideally running a pub or another business. If you’ve never run your own business and have no experience in the hospitality industry, you may struggle to get accepted for a pub mortgage.
• Whether you have the necessary licences: At a minimum, you’ll need to have a personal licence and premises licence.
• Your deposit size: You’ll need a deposit of 30% to 45% to qualify for a pub mortgage.

In addition, some lenders will look at the pub’s previous trading accounts, and the pub’s location may also be considered.

How long does an application take?

Pub mortgage applications can usually be completed within six to 12 weeks. However, this will depend on whether you have the necessary details and documents to hand, as well as the complexity of your situation.

How much does a pub mortgage cost?

Pub mortgage interest rates can range from 3% to 7% per year. But this will depend on:

• The size of your deposit: The less you borrow, the less you’ll usually be charged
• Your credit history: A higher credit score generally means a lower interest rate
• Your trading history: A business in good financial health is more likely to secure a better rate.

Interest rates can be fixed or variable. If you choose a fixed-rate pub mortgage, the rate will remain the same for the term of the deal, usually two to five years. This means your monthly repayments will also be stable.

If you choose a variable rate deal, the mortgage rate and your monthly repayments could go up or down.

Where can I get a pub mortgage?

You may be able to find a pub mortgage with any of the following lenders:

• High street banks: Mortgage rates can be more competitive with high street banks. You’ll usually need to speak to a specialist in the commercial lending team who has experience with pub mortgages.
• Challenger banks: A few challenger banks offer pub mortgages. These banks tend to have more flexible lending criteria, so their mortgages are often easier to get accepted for. But this also means you’ll pay a higher interest rate.
• Specialist online lenders: A mortgage with a specialist lender can be the most flexible option as they often accept applicants with poor credit or weaker trading accounts. Again, interest rates will be higher and you may need a larger deposit.

Can I get a pub mortgage with no deposit?

It might be possible to get a pub mortgage without a deposit. But you’d need another form of security, such as the equity in another property you own, to qualify. It’s best to discuss your situation with a mortgage broker who will be able to tell you which lenders are more likely to accept an application with no deposit.

What is a pub loan?

A pub loan enables you to borrow a sum of cash from a lender. You repay this sum, plus interest, in monthly instalments over a set term. Terms are generally shorter than pub mortgages, although this depends on the lender and whether the loan is unsecured or secured.

Unsecured loans, which don’t require collateral, are usually repaid over one to seven years. Secured loans have longer repayment terms.

What can I use my pub loan for?

Pub loans can be used for a variety of purposes, such as:

• Buying inventory
• Hiring staff
• Renovating your premises
• Outdoor maintenance, such as garden landscaping
• Buying a vehicle for the business
• Paying for kitchen equipment
• Marketing and advertising costs

How much can I borrow for a pub?

This will depend on the type of loan you apply for and the lender. Unsecured pub loans might let you borrow from £1,000 to £500,000. Secured loans typically let you borrow upwards of £250,000.

The amount you can borrow will also depend on your credit rating and affordability, as well as your business’s financial health. The stronger these are, the more you can borrow.

What do I need for a pub loan application?

When applying for a pub loan, most lenders will want to see the following:

• Three to six months’ worth of bank statements
• Tax returns for at least the past two years
• A cashflow forecast
• Your exit strategy to show how you will pay back the loan
• Proof of identity and address

If it’s a secured loan, you’ll also need to provide details of the security you’re offering.

You must be at least 18 years old and have a UK-registered business. Some lenders will ask that you’ve been trading in the UK for a minimum period – often around three months. However, lender criteria will vary, so check carefully.

How can I apply for pub and bar loans?

You can usually apply for a pub loan directly with the lender or you can apply through a broker.

A broker can assess your financial situation and help you find lenders that are more likely to accept your application and offer the most competitive interest rates. A broker can also offer support when completing your application, making it a much smoother and less stressful process.

Here at Swoop, we can help you find the right pub loan for you. Even if you’ve been turned down elsewhere, it may still be possible to secure the funds you need. Register with Swoop to get started.

What are the benefits of pub business loans?

One of the biggest benefits of pub business loans is that they can be quick and easy to set up. You might have the funds in your account in just a few hours.

As mentioned, pub loans can be used for a range of purposes, giving you the flexibility to spend the cash as you see fit. Monthly repayments are often fixed, making it easier to budget and interest rates can be low. What’s more, if you make your repayments on time, you’ll steadily improve your business credit score. This can boost your chances of getting access to more credit in the future.

What are the typical interest rates on pub finance?

Pub finance interest rates typically start from around 3.5%. You’re more likely to qualify for lower interest rates if you have a good trading history, excellent credit, and your business is financially robust.

Higher rates will usually apply if the lender views your business as a higher risk. This might include businesses with a poor credit score or a limited trading history.

Get started with Swoop

Our team at Swoop would be happy to discuss your requirements with you to help you find the right pub finance deal and support your application. Begin with the best deal to give your project the best start possible. Apply now.

Open Banking has changed the way UK businesses and individuals can use and grow their money. Fast, efficient and more innovative than traditional financial systems, Open Banking puts the customer firmly in control. But what exactly is Open Banking, how does it work and what can it do for you? Read on to find out all you need to know about this financial revolution. 

What is Open Banking?

Open Banking has existed in the UK since 2018. It authorises the high street banks to let you electronically share your financial data with other, third-party financial providers. Your permission gives these entities ‘read only’ access to your banking data, such as transactions, payments and available balances, allowing you to obtain financial services and conduct transactions without the faff of visiting your bank. With Open Banking, you don’t need to fill out lengthy forms to provide third-party apps or websites with the data they need. Once you’ve given permission through your bank’s mobile or online banking, these services can access the necessary information directly. 

Examples of open banking

Open banking is used by many thousands of businesses and millions of individuals in the UK every day and for literally hundreds of different uses. Here are four examples of Open Banking in action:

• Business and personal finance management has been positively changed by Open Banking. Data aggregation enables companies to access and combine customer bank account data, such as savings balances, to provide tailored support with money management and actionable insights.
  
• Proof of income is crucial for many private and business transactions, including lending or renting residential or commercial property. Open banking changes this with instant income verification—there’s no need for payslips, bank statements, or tax returns.
  
• Affordability checks are important for lenders in both consumer and business lending. But judging a borrower’s real financial position can be challenging with limited financial data. Open banking allows lenders to analyse up to two years of financial records to achieve an accurate affordability profile.
  
• Online payments do away with the need for paper documents. However, in the business world, paper invoices are still very common, and they’re a major reason why so many small businesses are struggling with late payments. Open banking can eliminate the time lag when it is embedded into the checkout and payment flow of a business’ accounts receivable. Automatic bank to bank payments are triggered on agreed timelines, producing a fast and frictionless experience.

How does Open Banking work?

Firstly, no person or business has to use Open Banking. It’s your choice. You have to opt-in to Open Banking, not opt-out. Secondly, every third-party financial provider must ask for your consent to access your data when you sign up to their services. Thirdly, your bank can only share the portions of your data that you want it to – such as available balances but not recent transactions. You can also withdraw your permission from any provider at any time, and they must renew your permission every 90 days. If you don’t renew, access to your data automatically expires.

As for the technology, without going down a technical rabbit hole, banks share your information securely via technology called an Application Programming Interface (API). APIs act as tech translators, allowing the different systems and platforms of various providers to ‘talk’ to each other in the same  language and seamlessly pass along the information you’ve agreed to share. You’ve almost certainly experienced this kind of technology before with popular platforms or apps such as Google, Uber or Deliveroo. For example, Deliveroo might use Google Maps’ API so it can work out where you are and where their delivery driver is to tell you when you can expect your take-away meal to arrive.

How is Open Banking different from traditional banking?

There are significant differences between Open Banking and traditional banking:

How is Open Banking regulated?

The rules regarding Open Banking are strict and designed to protect customer privacy and financial data. These rules have existed across Europe since 2007. In the UK, Open Banking is regulated by the Financial Conduct Authority (FCA). Only companies that are authorised by the FCA can use Open Banking technology (APIs) to access financial information or initiate payments on behalf of a customer. Penalties for misuse of Open Banking systems and data can be severe.

Is Open Banking safe?

Yes. As long as they’re authorised, providers can only access the data that’s needed for the service you’ve signed up to. For example, if you’re an SME seeking a business loan and you’ve asked a comparison marketplace to look at your business’ current account, it can’t also look at a commercial mortgage you have with the same bank unless you give your express permission.

Additionally, all third-party financial providers have to comply with data protection rules. This includes GDPR. The provider must tell you exactly which data it will use, how long for and what it’ll do with it before you sign up. If you’re not sure about anything, make sure you ask the provider what data they want and what they are using it for before you give access. If something doesn’t feel right, don’t share your data with that provider.

Open Banking benefits:

Open Banking has major benefits for both businesses and consumers:

Benefits of Open Banking for businesses

• Enables businesses to access their customers’ financial data (with their consent), allowing them to offer better and more personalised products and services.
• Allows businesses to automate and streamline their financial processes, such as accounting and compliance. This saves time and cuts costs, which can improve efficiency and productivity.
• Helps businesses tap into new sources of financing, which can increase their revenue.
• Helps businesses to detect and prevent fraud. This improves the customer experience.
• Can help organisations to capture more sales (especially online and consumer-facing businesses, where slow payment systems often lead to customers leaving unpurchased items in their basket).

Benefits of Open Banking for consumers

• Enables customers to share their financial data with third party providers. This allows access to a wider range of tailored products and services than they may receive from traditional banking
• Allows instant payments without the need for credit or debit cards
• Helps customers save money on loans and mortgages – provides instant comparisons
• Improves financial inclusion by providing access to financial services to underserved populations
• Helps prevent financial fraud by giving customers more control over their data and who can access it

Open banking challenges:

Not everything is perfect in the world of Open Banking. Still a relatively new innovation, Open Banking has yet to address these important disadvantages: 

• Security fears: By design, Open Banking gives third-party financial services providers access to customers’ confidential data. As a result, many business and personal customers remain worried about security breaches that could occur because of increased sharing. This is mainly driven by customers’ lack of understanding as to how Open Banking works, but it has nevertheless created a wariness among some customers that is proving difficult  to eliminate.  

• It removes the interpersonal relationship with the customer: Because everything is handled digitally, old-style, face-to-face encounters between the customer and their bank are getting fewer and fewer. This can lead to a breakdown in the relationship and brand loyalty between customer and provider and it is also giving the banks reason to close thousands of branches across the UK, which can disproportionately impact older and less technically savvy customers.

Find out more with Swoop

Open Banking can give businesses fast access to a range of financial services and products – loans, mortgages, investments, leasing and more. Swoop is at the forefront of this new financial freedom. Our mission is to provide UK SMEs with the best and most cost effective financing options when they need it and with the minimum of fuss. Call us today to find out how your business can benefit from the biggest change in business financing since money was invented.