Your Business credit

Lenders use reports from companies such as Experian and TransUnion to check your business creditworthiness. The most favourable terms are offered to businesses with good credit scores so it’s good to know ahead what position you are in. It might also make sense to settle outstanding debts before applying.

Personal credit

Some lenders will consider too much personal credit as a risk so it can also be worth running a credit report on yourself before looking to apply. Lenders also don’t like it if there are any outstanding CCJs on an applicant, so always settle those where possible.

Age of the business

The minimum age of the business varies from lender to lender, some lenders will require an age of 6 months or more to allow an application, but it is more common to see 1 or 2 years as a minimum requirement. Note – if you switch from a sole trader to a limited company, some lenders will only count the time as a limited company as they are separate entities.

Revenue and Operating Profit

Lenders like to see the business is performing well and will be making enough money to cover the repayments of the loan.

Personal guarantee

The core difference between an unsecured loan with a personal guarantee and a secured loan is that with a personal guarantee the lender has no legal rights over any property if the business defaults. Instead, the personal guarantee promises the directors will still pay back the funding. This could be via a corporate voluntary arrangement (CVA) to repay the debt over smaller manageable payments. 

What are the next steps? 

As stated, the exact requirements will vary between lenders and we have options that fit all kinds of requirements. So even if you think you don’t qualify based on the above, get in touch and we can take a look for you.