Why won't banks lend to a stagnant business?

Banks prefer to see a clear history of growth in revenue and profitability. A business with stagnant or declining turnover is seen as higher risk, as it raises concerns about the business's ability to adapt to market changes and generate enough future profit to cover loan repayments.

What is an 'asset lend'?

An 'asset lend' is a type of loan from a specialist or private lender where the lending decision is based almost entirely on the value of the asset you provide as security (usually property), rather than the business's income. This is a common way for stagnant businesses to get funding.

Can invoice finance help a business with flat sales?

Yes. Invoice finance can be a great option. Lenders in this space are more focused on the creditworthiness of your customers than your business's growth trajectory. If you have invoices from reliable, large customers, you can turn them into cash to improve your working capital.

How can I prove future growth to a lender?

To overcome a history of stagnant sales, you need a very strong business plan. This should include evidence of new contracts won, detailed financial projections, and a clear strategy outlining how you will use the loan funds to generate growth.

Are the interest rates higher for stagnant business loans?

Yes, you should expect to pay a higher interest rate. Because the lender is taking on more risk compared to lending to a rapidly growing company, they will charge a higher rate to compensate for that uncertainty.