Business loan eligibility in the UK

• Trading history — twelve months is a common floor, two years or more widens the field.
• Turnover — monthly credits through the business account, and whether they are steady or spiky.
• Credit profile — company file, director file, CCJs, defaults and existing charges.
• Structure — limited company, sole trader or partnership changes which lenders can look at all.
• Purpose — what the money is for, and whether the return supports the repayment.

• Under twelve months of trading.
• No business bank account, or turnover running through a personal account.
• Recent defaults or an unresolved CCJ.
• Several finance applications or declines in the last month or two.
• Accounts long overdue at Companies House.

A poor credit file does not close everything off — read business loans with bad credit for what stays fundable.

• Six to twelve months of business bank statements.
• Latest filed accounts, and management accounts if the filed set is old.
• Company registration number and registered address.
• Detail on existing finance: balances, monthly payments and end dates.
• For asset or invoice facilities, the invoice or the equipment quote itself.

Different routes are linked to different commercial situations. Equipment purchases are commonly considered through asset finance, while eligible business-to-business invoices may be considered through invoice finance. Some providers offer cash-flow-linked structures based on card takings, including a merchant cash advance. A provider may also consider an unsecured business loan for a defined cash-flow requirement. These descriptions are not recommendations. Use the business loan calculator only to illustrate repayment calculations.

What are the basic eligibility criteria for a UK business loan?

Most commercial lenders want a UK-registered business with a trading history, regular turnover through a business bank account, and a director able to give a personal guarantee. Criteria differ by product and by lender, and none of it is a guarantee of an offer.

How long does a company need to have been trading?

Twelve months of trading is a common minimum across commercial lenders, and two years or more opens up considerably more options. Under twelve months usually points towards start-up specific products rather than mainstream commercial lending.

Does turnover matter more than profit?

For many short-term commercial products, yes. Lenders often size a facility against monthly bank credits because that shows real cash movement. Profit still matters for term lending and for anything assessed off filed accounts.

Can a sole trader apply?

Some lenders fund sole traders, but the partners Backed introduces to work with UK limited companies. If you are a sole trader, a high street bank or a start-up loan scheme is usually the better first stop.

Does an enquiry affect my credit file?

Submitting an enquiry to Backed does not itself run a credit search. A funding partner may carry out a search as part of their own process, and they will tell you when that happens.

Backed may introduce your company to one or more funding partners whose criteria may fit. Providers determine eligibility, approval, pricing and terms.

Submit a funding enquiry

• How to get a business loan in the UK — What lenders look at, the funding types available, and how to apply.
• How business loans work in the UK — Terms, rates, repayments and personal guarantees explained.
• Business loan calculator UK — Monthly payments, interest-only comparison and total cost before you apply.
• Commercial business loans in the UK — Business lending products, what lenders assess and how to compare offers.
• Business loans with bad credit — What is still fundable when the credit file is not clean.
• Invoice finance explained — Turning unpaid invoices into working capital.