In early stage businesses, typically with a revenue of less than £2m, lending will normally be on a secured basis.
As a business grows the bank can support the growth with a range of working capital facilities, to aid the smooth running of the business.
Starting out
A bank will not fund early stage R&D or product development on an unsecured basis.
It will generally start lending on a short to medium term basis when there are independent revenue streams, not linked to the success of the product in development, that can service the loan repayment.
The relationship
Relationship is very important – build up a track record with your bank, starting with smaller loans or working capital facilities and growing these with the business.
Keep the bank up to date with progress and maintain good account conduct as this can affect the risk profile of the business when looking at credit applications.
As the business grows to revenues of c£5m it would be of benefit to be in a specialist sector-aligned team within the bank, so that you can benefit from their experience with similar clients.