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Why it's important to deliver affordable loans for small businesses

The affordability of business loans is essential for one obvious reason - if they're not affordable, then they won't be helpful, they will just create problems. Affordability is not about stretching a business to the max, but what is realistically manageable when it comes to repayments and repayment terms.

Equally, affordability isn’t just about looking at turnover – it's about looking at the business, and the reason for the loan. If you don’t, as a lender you might miss out on supporting an exciting new or growing enterprise.

This is where the purpose of the loan is crucial. Ethical, short-term business loans are not about delivering a lifeline in a hopeless situation. Instead, they're about providing a helpful tool for businesses so that they can take advantage of an opportunity and make their money work harder for their business.

How Rivers provides affordable financing for small businesses

At Rivers we are not just about providing loans - we provide business funding solutions, through our team of Business Finance Specialists. These are experienced professionals who provide independent business finance and loans with a special focus on supporting SMEs in any sector and have done for many years.

To us, affordability is essential, so we seek to ensure that’s the case in several ways:

• We consider the business case for the loan rather than looking at the amount in isolation
• We consider your equity in the business.
• This is in conjunction with the affordability of repayments.
• Clients do not need to make a contribution to the amount required.
• We provide affordable loans with transparent fees. Our loans only have a one-off arrangement fee, standing at a flat rate of 4% on short-term loans and 3% on medium-term loans.
• We offer 14-day repayment terms on short-term loans because we know that they are preferable for businesses to the standard daily or weekly repayments.
• With our short-term Cash Flow Solution Loans, once 50% of the original has been repaid you are welcome to apply for a renewal
• Alternatively, you can settle the loan early without a penalty.

Eligibility criteria for Rivers’ affordable loans for small businesses

Having eligibility criteria in place for business loans is also a crucial part of the process and having them is a clear marker that a lender is responsible in their approach.

For example, at Rivers, we have four core eligibility criteria that need to be met before a loan application can progress. These are:

• At least one company Director is a UK homeowner
• You are a limited company or LLP
• You are registered in England or Wales
• You have been trading for a minimum of three months

Unlike traditional banks, we don't ask for a contribution, or for a detailed business plan, but we do ask for clarity on what the loan is for and how it's going to serve your company. We also undertake appropriate due diligence to check that repayments will be realistic alongside any other fiscal commitments.

This holistic consideration of a business's loan application is fundamental to making sure we're delivering the right product. As Business Finance Specialists and trusted business advisors we want to be helpful. Sometimes that means saying 'no' to the application you sent in, but being able to offer an alternative approach which we believe will be more sustainable and beneficial for your business. We might also say 'no for now', if the business is stretched for example, knowing it might be best to trade through it for a few months, taking the debt on when you're on a better financial footing.

That's because while we want to lend, we want to lend responsibly, knowing that it's not just best for us, but best for you as well.