Getting your business funded with a high-street bank loan is a difficult affair. Company owners that look for finance options like a NatWest business loan face rejection year after year.

Last year more business owners opted for alternative funding sources than the UK’s five biggest banks. Specialist banks and lenders accounted for a record 60% of SME lending in 2024.

But why are traditional ways of funding like a NatWest business loan becoming less popular? Here are 4 harsh truths about getting a business bank loan today.

Long Application Process

The application process for getting a business loan with a high-street bank is renowned for being lengthy.

Some applications can take two to three weeks, whereas others can take over 3 months. Some banks have underwriters who review loan requests and scrutinise the business’s documents.

These documents usually include 6 months of business bank statements, the last set of full filed accounts, a business plan, and a cashflow forecast. High street banks are strict with lending and can review these documents for months before deciding if you’re eligible for a business loan.

However, specialist lenders are more forgiving with their application process. They can get businesses funded in as little as 4 hours with the same (and often less) documents that banks require. They work with specialist underwriters and finance brokers to speed up the funding process.

Crispcap is a finance brokerage that works with various lenders to get businesses financed speedily. You can get in touch here.

Low Approval Algorithm

High-street banks often utilise automated underwriting systems that determine a business’s eligibility for a loan using AI.

For instance, to get a NatWest business loan the customer needs to complete a 3-minute eligibility criteria checker.

Whilst automation makes decisions quickly, there isn’t much that can be done if you fail to meet their criteria for a business loan. You can still apply for one directly with the bank, but your chances of success are minimal and a formal decline may damage your credit score.

However, specialist lenders have a more flexible approach to their funding process. They are experienced in financing businesses of different sizes and health and will take on more risk for a higher interest rate on the loan.

Finance brokers can leverage their relationships with different lenders to get a business loan for a company that couldn’t be approved anywhere else.

Cost of Funds

Business loans from the bank are harder to obtain, but they will have a lower interest rate than commercial finance from specialist lenders.

A variety of factors, including a business’s health and credit rating, determine interest rates on business loans. The loan amount and its monthly repayment terms will also have an impact.

However, loans from specialist lenders are usually more expensive because they are lending to a business that’s deemed as high-risk.

What’s more, the customer pays a higher fee for faster service and expert advice. It may be their only opportunity to get the loan term and amount they want too.

Many business owners get a short-term loan as a stopgap to keep their business moving until they’re eligible for a bank loan in the future.

Credit Score

Personal and business credit plays a huge part in securing commercial finance from a high-street bank. To get a NatWest business loan, the bank says that good personal credit is crucial to your application.

Credit is determined by your trustworthiness to repay borrowed money on time and in full. Credit cards, mortgages, and financial contracts will contribute towards your credit score.

If your credit score is low, there are specialist lenders who may be able to offer you a bad credit business loan whilst you build your score back up. This finance option is tailored to business owners who struggle with credit but still want to fund their business.

Whilst the interest will likely be higher than average, a bad credit business loan can help businesses improve their cash flow and grow their operation. Regular loan repayments on time can also improve your credit score.

Crispcap has arranged countless loans for businesses with bad credit. Our panel of specialist lenders are flexible and cooperative.

Will I Get a NatWest Business Loan?

If your business turnover is high and showing strong profit margins, you may be eligible for a NatWest Business Loan. Your credit will need to be in a strong place as well.

However, bank approvals have more than halved since the pandemic as the economy recovers. Relying solely on their automated underwriting system and strict criteria is not a promising option today.

Exploring other funding sources in the current market is definitely worthwhile. This is especially true if the bank denies your application, or you want a loan with more flexible amounts and terms.

You would also access the funds faster than banks even if your credit score is low.

You can borrow from Crispcap’s exclusive panel of lenders by getting in touch here. Your initial application does not affect your credit score.