Turned down for
trading history
Trading history is the single most common reason a business loan is declined, and the only one that fixes itself. Most of our panel wants at least a year; one lender will look at six months. Under six months, conventional cash flow lending is realistically not available.
No credit check to enquire.
What each milestone unlocks
- Six months — one lender on our panel, with turnover of around £5,000 a month required
- Twelve months — several more open up, and the pricing improves
- Two years — most of the panel, including the larger facilities
- Five years with four filed accounts — the cheapest fixed-rate lending we have access to
The jump between six and twelve months is the steepest. If you are at eight months and the need is not urgent, waiting four months will usually get you a materially better deal than taking what is available today.
What works before a year
If you take card payments, revenue-based funding reads your settlement data rather than your accounts, which is exactly the right shape for a young business with real trade but no filing history.
If you invoice other businesses on credit terms, invoice finance lends against your debtors rather than against you. A young company with good customers can sometimes borrow on the strength of those customers.
What rarely works is a conventional unsecured term loan. Applying for one anyway leaves a search on your file for nothing.
Does a dormant period count?
Usually not. Lenders generally count from when the company started trading rather than from incorporation, so a company registered three years ago that began trading in March is treated as a few months old. It is worth being straight about this up front, because it comes out in the bank statements anyway.
How to use the months while you wait
File your first accounts when they are ready rather than at the deadline. A new company has twenty-one months from incorporation to file its first set, and a lender looking at a young business has very little else to read. Filing early gives them something.
Keep the company’s money in the company’s account and nothing else in it. Personal spending mixed in makes six months of statements far harder to read, and a young company is judged on little else.
Pay suppliers to terms. Trade credit paid on time is one of the first things to appear on a new company’s credit file, and it is one of the few things you control from day one.
Personal borrowing is a separate decision
At this stage some founders borrow personally and put the money into the company, including through the government-backed Start Up Loans scheme, which lends to individuals whose business has traded for less than three years. It is assessed on you rather than on the company, and the debt stays yours whatever happens to the business. That can be the right call. It should be a deliberate one.
Common questions
Does my industry experience count if the company is new?
It helps the conversation more than the decision. An underwriter will read it as context, and a director who ran a similar firm for ten years is a better story than one who did not. But most decisions at this size rest on the company’s own trading, so experience rarely gets a six-month-old business past a twelve-month rule.
I bought an existing business. Does its trading history transfer?
If you bought the company itself, its shares, the history comes with it, because it is the same legal entity. If you bought the assets and now trade through a new company, most lenders treat that company as starting from zero, even with the same customers and premises. Some will still want to see how it has done since the change of owner. Tell us which it was, because it changes the answer.
Can a new company get asset finance when a loan is out of reach?
Often more readily, because the lender has the asset to fall back on. Our sister firm CW Asset Finance arranges it, and a young company buying a van or a machine is a common case there.
Find out what is open to you now
We check the panel before anyone searches your file.
Get my options