BCRS Business Loans review: community lending in the Midlands and Wales

BCRS Business Loans is a not for profit lender that supports small and medium sized businesses in the West Midlands and Wales when the banks will not. It is a community development finance institution, or CDFI, and its loans come with a relationship based approach rather than a pure credit score decision. BCRS Business Loans is one of the lenders on our panel, so we can check whether it or a mainstream lender is the better route for your business.

01About BCRS Business Loans

BCRS started in 2002 as a co-operative business loan fund in the West Midlands and has grown into one of the better known community lenders in the region. It describes itself as a non-profit distributing society, which means surpluses are put back into lending rather than paid out to shareholders.

A big part of its work is managing public and regional loan funds. BCRS lists the Midlands Engine Investment Fund, the Investment Fund for Wales and the government backed Growth Guarantee Scheme among the schemes it administers. Its listing on the GOV.UK business finance finder says it is aimed at businesses that can show they cannot secure bank funding.

02What BCRS Business Loans funds

BCRS offers one core product: a business term loan. The detail is straightforward.

Loans can be used for most business purposes that help a firm develop and grow: working capital, equipment, premises improvements, taking on staff or new contracts. The GOV.UK listing names a wide range of eligible sectors including agriculture, construction, education, health, hospitality, digital and creative, manufacturing, retail, transport and utilities.

For a wider view of loans that do not require property as security, see our unsecured business loans guide, and for location based schemes our regional business loans page.

03Who BCRS suits (and who it may not)

BCRS is likely to suit:

• Businesses based in the West Midlands or Wales with a sound plan but a bank decline, or not enough security for the bank.
• Younger businesses, including those with one to two years of trading.
• Owners who value a lender that takes time to understand the business.
• Firms in areas the mainstream market underserves; BCRS has highlighted lending in economically disadvantaged areas.

It may not suit:

• Businesses outside its lending area.
• Firms that can get bank or mainstream lending, since BCRS is intended as a lender for those that cannot.
• Very urgent needs. Relationship based lending usually takes longer than an online lender.
• Amounts below £10,000 or larger deals beyond its range.

Loans can be used for most business purposes that help a firm develop and grow: working capital, equipment, premises improvements, taking on staff or new contracts.

04What BCRS looks at

BCRS publishes its own eligibility and loan process guides. It says every application goes through a credit assessment and an affordability check. As a community lender, typical requirements include:

• A business plan explaining what the loan is for and the impact it will have.
• Cash flow forecasts showing how the loan will be repaid.
• Recent accounts, management figures and bank statements where you are trading.
• Evidence of the bank's response, as schemes like this are aimed at businesses unable to secure bank funding.
• Information about the directors or owners, who are commonly asked for personal guarantees.

05Pros and cons

Pros

• Designed for viable businesses turned down elsewhere.
• Open to start ups and young businesses.
• No early repayment charges, according to BCRS.
• Not for profit, with a focus on jobs and local economic impact.

Cons

• Only available in its lending area.
• Usually slower than online lenders because of its fuller assessment.
• May cost more than a bank loan, reflecting the higher risk it takes on.
• You may need to show you have tried a bank first.

06Applying through a broker vs going direct

BCRS accepts direct applications, but many businesses do not know whether they are a bank case, a community lender case or a fit for an online lender. A quick market check can save weeks. We search the market, present your plan clearly and approach suitable lenders, which may include BCRS where it fits. It is free to enquire; any broker fee is disclosed separately before you proceed.

If BCRS is the right fit, we will say so, and if a cheaper or faster route is available, we will show you that too. Start with our Instant Quotes tool to compare lenders in minutes. Smart Funding Solutions is an independent broker and is not part of BCRS Business Loans. The scheme is described on GOV.UK.

07Alternatives to BCRS Business Loans

• FW Capital lends larger amounts and is worth comparing for bigger requirements.
• Finance For Enterprise offers unsecured business loans and can be an option for larger, established businesses.
• iwoca can be quicker for smaller, shorter working capital needs if your trading record is solid.

Starting out? Our start-up business loans guide sets out the other options.