Top 6 reasons SMEs struggle to get business financing — and what to do instead
Access to funding continues to be a growing challenge for SMEs. Research suggests more than half of SMEs are worried about securing the right funding for their business. If you find yourself in this camp and/or have experienced challenges accessing capital then this is for you.
Securing financing should help your business grow — not slow it down. Here are the top 7 reasons SMEs find accessing funding a challenge, and how flexible funding is changing the game 🚀
1. Traditional lenders aren’t built for modern businesses
Banks are risk-averse, slow-moving, and focused on collateral. If your business needs financial agility, has volatile or seasonal cash flow or limited credit history, you might find traditional lenders aren’t interested in supporting you.
What to look for instead: seek lenders that are built with your business in mind. These offer greater flexibility and many base decisions revenue performance – not just your credit score or assets.
2. Complicated, drawn-out approval processes
Traditional lenders often have complex applications and internal processes, which mean lengthy forms followed by waiting weeks for a decision.
What to consider instead: Fintech platforms are speeding things up, with streamlined digital applications and faster decisions. Allowing you to continue focusing on your business, not chasing paperwork.
3. Rigid repayment structures
If you have seasonal or fluctuating cash flow, a fixed repayment is unlikely to work for your business, making getting access to traditional financing options difficult.
A better fit for your business: Look for funding options that offer flexible repayment schedules, tailored to your business set-up. Revenue-based repayment options make sense for businesses who need access to funds at specific times.
4. Opaque terms and hidden fees
While these don’t prevent access to funding directly, they do create obstacles, a feeling of uncertainty and cause problems in comparing options that are truly affordable for SMEs.
What to look for instead: Lenders who are upfront from the start. Easy to understand terms and clear fees, terms and interest rates. Loan calculators are a great way to help you see repayment structures and understand the true cost of borrowing - Juice has a new one, keep reading to see how it can help you.
5. Fear of overleveraging
It’s understandable that business owners want to grow sustainably without putting their personal assets at risk. Traditional lenders often require financial commitments which can restrict opportunities for growth.
What works instead: Alternative funding partners that don’t require a personal guarantee. These lenders may offer funding based on recurring revenue, meaning less risk for you, and more freedom to grow on your terms.
6. Not knowing all the options
Sometimes the biggest hurdle is simply not knowing what your options are — or thinking you don’t qualify when you actually might. We know businesses are apprehensive to access funding, which affects their growth opportunities.
How to get started: Juice’s Loan Calculator is a good starting point to understand if you’d qualify for flexible funding and what this could look like for your business 💥
Also consider working with a broker to help find you the funding that works for your business. Reading reviews and testimonials can also help with selecting a lender who speaks your language.
If you’ve been considering funding your business and this resonates with you, we’d love to walk you through your options. At Juice we offer honest advice to help you grow. No pressure or obligation.
💡 And if you’re looking for more than just funding, check out our Growth Hub. It’s built for founders like you, and it’s all about helping you scale smart – not just fast.