Turned down by Metro Bank? Business loan alternatives

What business lending Metro Bank offers

Metro Bank describes itself as an independent UK bank offering relationship banking through a network of 78 stores, alongside telephone and digital banking. Its Local Business Managers are based in stores, and larger customers have a Relationship Manager or Local Director. Here's what it publishes about its business lending. We've left out rates and fees, which change and depend on your circumstances.

Metro Bank says it uses a sale and leaseback structure to refinance equipment and machinery you own outright, and that you might raise up to 75% of the asset value.

What Metro Bank looks for

Metro Bank's lending is closely tied to banking with it. It says you need its Business Bank Account (for businesses with up to £2m turnover) to apply for a business loan, or its Commercial Current Account (over £2m) for a commercial loan, and that security will likely be needed. For loans and overdrafts it says security may include a guarantee and indemnity from directors and security over property such as land, and that property used as security, which may include your home, may be repossessed if repayments aren't kept up.

Its published business overdraft criteria include having traded for at least seven months, a director holding at least 20% of the business, turnover of no more than £40m, and not operating in certain excluded sectors. It also says you must wait three working days after opening a Business Bank Account before applying for lending.

If you don't bank with Metro Bank, or don't want to move your account, its loans and overdrafts aren't the natural route, and lenders that don't require a current account may suit you better.

We're not part of Metro Bank

Nexgen Business Finance is an independent credit broker. We're not part of Metro Bank, we're not connected to or endorsed by it, and we can't make or influence its lending decisions. This page summarises Metro Bank's own published information so you can weigh up your options, including going back to Metro Bank if that's right for you.

Why a bank may say no

Only Metro Bank can tell you why it declined your application, so ask for the main reason. In general, the British Business Bank lists a low credit score, lack of collateral, a weak business plan and poor cash flow forecasts among the common reasons banks refuse business loans, and says start-ups may also be declined for a short track record or no assets.

With a bank that typically asks for security, a decline can simply mean there wasn't suitable security available for the amount requested. That's useful to know, because it points towards lenders who assess the asset being financed, or the invoices you're owed, rather than property.

Metro Bank and the Bank Referral Scheme

The Bank Referral Scheme requires designated banks to offer declined small and medium-sized businesses a referral to government-designated finance platforms. HM Treasury's Notice of Designation lists nine banking groups: AIB (First Trust Bank), Bank of Ireland, Barclays, Clydesdale Bank, Danske Bank, HSBC, Lloyds Banking Group, the Royal Bank of Scotland Group (now NatWest Group) and Santander UK. Metro Bank isn't on that list.

That doesn't mean you've lost anything. The British Business Bank says businesses can approach the designated platforms, or other platforms, brokers and finance providers, on their own at any time. The designated platforms named by UK Finance are Alternative Business Funding, Funding Options and Funding Xchange.

If Metro Bank declines you, there's no need to wait for a referral. You can compare other lenders straight away.

Alternatives to a Metro Bank business loan

Which route fits depends on why Metro Bank said no and what you need.

• Unsecured business loans. Many lenders don't require you to hold a current account with them. A personal guarantee is usually required. See unsecured business loans.
• Secured business loans. Property security can support larger or longer borrowing. Your property may be repossessed if repayments aren't kept up. See secured business loans.
• Asset finance. The vehicle or machinery you're buying acts as security, so you may not need property. See asset finance and hire purchase.
• Asset refinance and sale and leaseback. Raise cash against equipment or vehicles you already own, including some still on finance. The asset can be repossessed if repayments are missed. See asset refinance and sale and leaseback.
• Invoice finance. Funding based on what your business customers owe you. See invoice finance.
• The Growth Guarantee Scheme. A government guarantee available only through accredited lenders, ranging from high street and challenger banks to specialist and local lenders, which make their own decisions. See our Growth Guarantee Scheme guide.
• Community Development Finance Institutions. Non-profit, relationship-based lenders that the British Business Bank says generally lend £25,000 to £250,000 and may lend where others won't. Security or a personal guarantee may be requested.

How a broker can help

Metro Bank's model suits businesses that want a local, relationship-led bank and are happy to move their banking and offer security. If that isn't you, or Metro Bank couldn't help, comparing lenders with different requirements makes sense.

We're a credit broker, not a lender. We'll ask what Metro Bank told you, look at what the business owns and owes, and suggest lenders whose criteria fit. We start with a conversation and indicative quotes rather than sending your details to every lender. See our guides on what to do after a decline and using a broker or your bank.

Call our team on 01604 355800 or send an enquiry.