Momenta Finance review: larger unsecured and secured business loans

Momenta Finance is a non bank lender that sits at the larger end of SME lending. Where many alternative lenders stop at £100,000 or so unsecured, Momenta will go up to £500,000, and further still with property as security. Smart Funding Solutions is an independent broker and is not part of Momenta Finance. Momenta is one of the lenders on our panel, so we can set its offer alongside banks and other lenders for the same amount.

01About Momenta Finance

Momenta Finance is the trading name of Merchant Money Limited, a company registered in England, with offices in Paul Street, London. It launched in 2013 and says it has supported around 2,500 SMEs and disbursed £250 million of funding.

Momenta describes its approach as tailored lending: understanding the business first, then designing the finance around it. It says it is accredited by the British Business Bank, and it offers loans under the government backed Growth Guarantee Scheme as well as its standard products. Its case studies cover businesses such as contractors, property developers and visitor attractions.

02What Momenta Finance funds

Momenta also lists development finance, secured loans against tenanted property and commercial property equity release.

Its unsecured loans come in two tiers. The standard loan runs from £50,000 to £350,000 and needs one homeowner guarantor. The enhanced loan, from £350,000 to £500,000, needs two homeowner guarantors.

Momenta lists a wide range of uses for its unsecured loans:

• Refinancing existing debt.
• Working capital.
• Expansion and new premises.
• Buying assets or machinery.
• Staffing and training.
• Marketing.

For a sense of what a loan of this size involves, see our guide to the £500,000 business loan.

03Who Momenta Finance suits (and who it may not)

For unsecured lending, Momenta's published criteria are clear. You will need:

• A UK registered limited company or LLP.
• At least two years of trading.
• Turnover of at least £350,000, taken from your latest filed accounts.
• More than half of your income from trading activities.
• At least one director or shareholder who owns property in the UK and is 18 or over.
• Any county court judgments settled, or being settled.

That makes Momenta a good fit for an established company with solid turnover that needs a six figure sum without putting property up as direct security. The secured loan is an option where you want to go higher, up to £1.5 million.

It is less likely to suit:

• Sole traders and partnerships, as unsecured loans are for limited companies and LLPs.
• Businesses with under two years of trading or turnover below £350,000.
• Owners who do not own property, since a homeowner guarantor is required.
• Anyone needing less than £50,000, the bottom of its standard unsecured range.

Momenta also lists development finance, secured loans against tenanted property and commercial property equity release.

04What Momenta Finance looks at

Once you submit an application, Momenta says it runs credit checks and passes the case to its underwriting team. For a loan of this size, typical information includes:

• The latest filed accounts, and often more recent management accounts.
• Recent business bank statements.
• Details of existing borrowing and what the new loan will be used for.
• Information on the directors, including property ownership for the guarantee.
• For secured loans, details of the property, its value and any existing charges.

Underwriters will want to see that the business can comfortably afford the repayments from its trading profits, and that the guarantors understand their commitment.

05Pros and cons

Pros

• Unsecured loans of up to £500,000, higher than many alternative lenders.
• Terms of up to 84 months keep monthly repayments lower.
• Secured, bridging and commercial mortgage options under one roof.
• Accredited by the British Business Bank and offers the Growth Guarantee Scheme.
• Broad list of permitted uses, including refinancing.

Cons

• Minimum turnover of £350,000 and two years of trading for unsecured loans.
• Requires homeowner guarantors, two for the larger loans.
• Not aimed at smaller loans below £50,000.
• Limited companies and LLPs only for unsecured lending.

06Applying through a broker vs going direct

At this level of borrowing, small differences in structure, term and guarantee requirements matter a lot. A bank, a challenger bank or a private lender might all be willing to lend the same sum on quite different terms.

We search the market, compare Momenta with other lenders that fit your profile, and present a clear, well supported case. That saves you approaching several lenders separately and helps you avoid multiple hard credit searches. It is free to enquire; any broker fee is disclosed separately before you proceed.

Start with our Instant Quotes tool to compare lenders in minutes, or read more on Momenta's own website.

07Alternatives to Momenta Finance

• ThinCats: a lender to established mid sized businesses, worth comparing for larger and more bespoke facilities.
• Allica Bank: a business bank that may suit companies looking for secured lending or a commercial mortgage from a bank.
• Mercantile Trust: lends against residential and buy to let property and accepts sole traders, which may help if you do not meet Momenta's company criteria.

To weigh up your options, see our guides to unsecured business loans, secured business loans, business bridging loans and commercial mortgages.