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SME Capital FAQs

Lending criteria

Our lending parameters are constantly expanding, but we currently lend up to £5m.

No, we are sector agnostic. We do not have any preconceptions on specific sectors and assess each business on their own merits.

Loans are available for between 3—7 years, with 5 years being the most popular term.

Not at this moment, however we are always looking to expand our capabilities.

No, we provide senior secured debt.

SME Capital typically does not take personal guarantees. Instead, we typically take a First ranking debenture from the company that creates fixed and floating charges over the present and future assets of the company.

Underwriting process

We can deliver funding within 6 weeks of initial application. Our internal processes are set up to enable this, but typically we find that timelines can change on a case by case basis depending on borrower and advisors’ preferences. These changes in timelines primarily stem from other external dependencies on the transaction.

In certain circumstances we will require third party verification, which will require you to engage an external financial due diligence provider, at your cost.

The Loan

Interest rates are typically between 8% p.a. and 11.0% p.a. Is the interest rate fixed or floating? Interest rates are fixed.

We generally require monthly interest payments and quarterly capital repayments. We offer bespoke business loans and tailor the structure accordingly, so we are able to offer capital repayment holidays if required.

Covenants are tested quarterly.

We will require at least three financial covenants. Those covenants tend to be Debt Service Cover Ratio as well as one of either: Gross Leverage or Net Leverage along with one of the following: Minimum Cash Balance; Interest Cover..

Fees and Charges

We like to be transparent about our fees. SME Capital applies an arrangement fee of 3.5% of the loan amount or a minimum charge. Borrowers will also need to pay for lender’s legal fees and ongoing quarterly monitoring fees during repayment.

Loans can be repaid early at any time but must be repaid in full. There is an early repayment charge, but in certain circumstances this may not be applied.