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Finance, Financial World, Loans

Small loans, big loans, some the size of your head. Does size matter in finance?

It wouldn’t be overly unfair to call business finance a “numbers game”. Whilst the most important thing in the business is undoubtedly personality, at the end of the day the fine details are often about the numbers. Exit fees, interest rates, monthly repayments and more all add up (no pun intended) to a full package that you choose to accept or deny.

With so many numbers involved in the financial process, it can be easy to come to the conclusion that “bigger is better” to lenders. After all, 1% interest on a 1.5m loan is much higher than one on £150k, so that must be more important to the lenders, right? Thankfully, that’s not the case – big loans and smaller ones aren’t “competing” for finance, and lenders are happy to consider any viable proposal for finance, big or small. However, just because they’re not competing doesn’t mean that the size of your loan doesn’t have an impact on your finance journey.

Lenders will look at any viable loan, but a bigger loan will naturally be looked at differently. If it’s a smaller lender, they might want to be 100% sure about the risks involved before they make any decisions, for example. This would mean a more extensive review process for the proposal, involving various different people. Similarly, analysing a proposal for a small loan is not the same as it is for a large one. Smaller loans might be for very specific things, and might need more an expert opinion on a particular topic than a big, more general project.

Business finance is a bespoke process. Lenders will want to look at different parts of the application specifically, and will require different information before they can decide if an application is likely to be profitable. This will apply whether you’re looking for £50,000 or £5,000,000. The size of your loan does matter in finance – it will lead to a greatly different journey to the funds. But when it comes down to actually getting the money, you’ve no need to worry.

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