Finstock Capital business loan review: Rates & more

Finstock Capital was established in 2017 and is headquartered in London. It offers a range of finance products aimed at businesses that might struggle to secure traditional bank funding or that want to avoid giving up equity.

An overview of Finstock Capital business loans

Finstock Capital offers both tax credit loans and venture debt, as well as bridging loans and acquisition finance. Below is an overview of how tax credit loans and venture debt work with Finstock Capital:

What is Finsec’s typical interest rate?

Secured business loans typically come with more attractive interest rates than unsecured loans because the security provided reduces the lender’s risk. However, the exact amount you pay usually depends on a range of factors such as the size of your business, its annual turnover and your business credit history.

In general, a business with a lengthy trading history and a strong financial and credit record will qualify for better interest rates than a new business with a limited credit history.

Tax credit loans

Tax credit loans allow businesses to borrow against the value of tax relief or tax credits they expect to receive from HMRC, before the cash is actually paid. Finstock Capital provides tax credit loans against research and development (R&D), video games and animation, and film and theatre. Your business must first qualify for tax credit before you can access a tax credit loan.

R&D tax credit loans are typically secured against an expected R&D tax credit repayment from HMRC. These loans can be useful for businesses as it can take months to receive tax credit from HMRC, and a tax credit loan enables companies to access and use the funds much faster. The lender is then repaid once HMRC pays out, usually with interest and fees.

Video games tax relief (VGTR) loans work in a similar way but are secured against the value of the VGTR tax credit expected from HMRC. They are commonly used by video game developers.

Theatre tax credit loans are secured against theatre tax credits claimed on qualifying theatre productions.

Venture debt

Venture debt is a form of borrowing designed for high-growth companies, often startups, that might not yet be profitable but have strong growth prospects and backing from venture capital investors. Loan terms are typically from a couple of months to up to two years.

This type of loan is usually taken alongside or shortly after a venture capital equity round, and it can help extend the runway between equity rounds and fund growth initiatives. Some agreements may be interest-only at first, followed by capital repayments.

How much can I borrow with a Finsec business loan?

You can typically borrow between £3,000 and £250,000 with Finsec, although second charge mortgage contracts only offer borrowing of up to £100,000.

The amount you can borrow depends on your business’s financial circumstances and ability to repay the loan, as well as the value of the property used as security. Also note that the amount you wish to borrow combined with any amount owed to your first mortgage lender must not exceed 65% of the value of an investment or semi-commercial property or 70% of the value of their residential property.

After six months, if you have met all your repayments in a timely manner, you may be able to apply for an increased loan amount.

What is Finstock Capital’s typical interest rate?

The interest rate you pay will depend on the type of business loan you apply for as well as factors such as your business’s financial standing and credit rating.

Businesses that have a good credit record and can show they can meet the repayments will likely qualify for the most competitive interest rates.

How much can I borrow with a Finstock Capital business loan?

Depending on the type of business loan you apply for, you can borrow between £100,000 and £5 million. This will also depend on factors such as the size and trading history of your business, your business’s credit history and its annual turnover.

You can typically borrow larger sums if your business has a strong financial and credit record.

What is the acceptance rate for a Finstock Capital business loan?

Finstock Capital doesn’t publish its acceptance rate, but in general, you are more likely to get accepted if you meet the eligibility criteria, have a good credit record and can show that you can afford the repayments.

Eligibility criteria and whether you qualify

Only UK businesses can apply for a loan with Finstock Capital, but the company will work with businesses at various stages of development.

To qualify for tax credit loans, your business must meet the criteria for the specific type of tax credit you’re applying for.

For example, with R&D tax relief, your company must be working on innovative projects in science and technology, while to qualify for theatre tax relief, the production you are working on must meet certain requirements. You can contact Finstock Capital to find out more or you can find the qualifying criteria on the gov.uk website.

Venture debt is usually best suited to start-ups and rapidly growing companies that already have backing from venture capital investors.

Additional information

When applying for funding with Finstock Capital, it’s important to read through the terms and conditions carefully, paying attention to the following:

Early repayment fees

Check whether there’s an option for repaying your business loan early and whether any penalty fees apply. This often varies depending on the type of loan – some may not charge any early repayment fees, while others might charge a percentage of the amount outstanding.

How long does it take to get approved?

Finstock Capital doesn’t specify how long it takes to get approved for a business loan, but the process is usually completed quickly. Providing the relevant information promptly can help speed up the process.

Estimated time to receive funds

You may be able to get a tax credit loan in as little as one week after first contact. If you’re applying for a venture loan, you usually receive funds within two to four weeks.

Can a loan be repaid early?

Whether you can repay your loan early depends on the type of loan you’ve applied for. You should be able to find this information in your business loan agreement or contact Finstock Capital directly to ask.

Is security required?

Yes, tax credit loans are secured against the value of tax relief or tax credits the business expects to receive from HMRC. Some forms of venture debt also require you to secure the loan against company assets, such as inventory or intellectual property. These assets are at risk if you fail to repay your loan.

What documentation is required

When applying for a business loan with Finstock Capital, you’ll need to provide certain information and documentation. Finstock Capital can explain exactly what you’ll need to supply, but it will usually include the following:

Business information

Typically, when applying for a business loan, you must provide details about your business, including its registered name and address, the size of the company and its annual turnover. You may also be asked for how long the business has been trading and how many staff it employs.

In some cases, you may need to provide a detailed business plan, as well as your business bank statements.

Business owner information

You will likely need to provide the details of all business owners, including their names, addresses and contact details.

Funding requirement

You must also state how much you wish to borrow and what you plan to use the funds for.

How to apply for a Finstock Capital business loan

You won’t be able to apply for a business loan with Finstock Capital directly online. Instead, you will need to complete the online enquiry form and wait for someone to get back to you. You can then discuss your requirements in full, and a credit check will be carried out.

Alternatively, you can email info@finstockcapital.com or phone 0208 748 9898.

Is the application process different to other lenders?

The key difference between the application process for Finstock Capital and traditional high street lenders is that you cannot apply directly online. Instead, you must contact the company and wait for someone to get back to you to discuss your requirements.

The advantage of this is that funding can be tailored towards your business needs and you’ll have a clear idea about whether you’ll qualify and how much you may be able to borrow.

How to improve your chances of getting funded

The best way to increase your chances of getting funding is to complete your application form accurately and honestly and provide any requested information or documentation as quickly as possible. You may also find it easier to get accepted if your business has a good credit score.

Pros & cons of a Finstock Capital business loan

Before applying for a business loan with Finstock Capital, be sure to weigh up the pros and cons to assess whether it’s the right option for your company.

Pros

Team of experts on hand to help discuss your options
Choice of funding options
Easy application process

Cons

Fees may apply
Can’t apply directly online
Can take longer than some competitors to receive funds

Alternative funding options for different lenders

If you’re not sure that a business loan from Finstock Capital is right for your business, there are plenty of alternative funding options available from other lenders. These include:

Why use a finance broker?

A finance broker can make it easier to compare and apply for business loans. Because they have access to multiple lenders and products, they can help identify options that suit your circumstances. You might find this particularly helpful if your business is relatively new, has a limited credit history or has experienced financial difficulties in the past.

A reputable broker will set out any fees clearly and handle the application process for you.

Bear in mind that some brokers charge for their services, either as a fixed fee or a percentage of the loan, so it’s important to check the costs before going ahead.

Get started with Swoop's business funding platform

Our team at Swoop would be happy to discuss your business funding requirements with you to help you find the right deal to support your application and help your business grow.

Finstock Capital business loan review: Interest rates, eligibility, and the application process