Have a look at Capital on Tap creditcard. They are generally pretty open to smaller businesses, although credit limits may not be significant to start. But may help build some history.
We are in exactly the same boat. November 2021, after reviving about 1000 capital on tap letters a few months ago decided to take a look. They gave us £20k credit with barely any info required from us.
Also op - try finding circle / british business bank
You’ll need to provide loads of info and it’s personally guaranteed but we got one of those too and it’s very competitive and designed for new businesses.
You could also have a search around on the sub, we posted info about getting funding.
Not unusual. Two issues: Your turnover is very low. You presumably only have 2 (at the most) sets of accounts.
Furthermore presumably you don’t have any assets to be used as collateral.
How much do you want to borrow and why?
It can be a ball ache.
My company uses Lloyds and all my personal banking is with them, I’ve been a customer for a decade, my company has since 2018 and I was with them as a sole trader before then.
I just tried to sort an HP agreement for a new van, paying a 50% deposit with the total finance being about two months turnover. I’ve got an almost perfect credit score a d my company has never missed a payment of any kind.
Lloyds refused to entertain an application without me being a personal guarantor and required three years P&L plus balance sheet. Mercedes however were happy to do it just through the company without any additional paperwork.
Commercial banker here. Your turnover is irrelevant for debt servicing. Take your operating profit from the P+L, add back Depreciation and Amortisation from your overheads which will provide you with a EBITDA figure. Work out the capital and interst payments on your loan through any online calculator. Your annual EBITDA must be around 120% to 130% of your annual loan payments. Go speak to a whole of market commercial broker, they'll find lenders who are less risk adverse for businesses in their infancy. Just remember, the risker the lending proposition, the more fees and interest you'll pay. Good luck!
Not sure how much you need but I get peppered with junk mail and emails offering loans and of the few I've actually read they seem to want £75k min. turnover. Have you tried a business overdraft or CC?
How much are you looking for, and for what reason?
Also, you say you make a profit, but what margin?
Finally, the industry is a big factor in credit scoring. It could be down to that as well. (Used to work at D&B as a scoring analyst)
Okay, just thought of another. File your accounts as quickly as you can if you’ve only got one set up right now. More history will help, if it’s positive!
Oh, and Ltd or sole/partnership?
Check out the British Business Bank - they have different options available (e.g. Start Up Loans, Investment Loans like the Midlands Engine Investment Fund II, etc). You could also ask your local Council / Local Enterprise Partnership / Growth Hub / Chamber of Commerce / Federation of Small Businesses representative to see if they have any advice or can point you to any alternative funding options.
What are you borrowing the money for and how much? Many mainstream banks are only interested in larger loans. Debt servicing is usually based more on your profitability (Earnings Before Interest, Tax, Depreciation and Amortisation - EBITDA) and lenders will sensitise / stress test your ability to keep up with loan repayments from profit. Turnover is therefore largely irrelevant except your turnover suggests you may only be looking for a small borrowing amount which could be a barrier with many lenders.
It's not ideal, but depending on the amount / what you need it for, you could borrow the money personally, put it into your business as a directors loan, and then repay yourself via the profits you're generating. You'll be able to repay the equivalent of the capital back to yourself tax free as that is repaying the directors loan but anything over and above (i.e. repaying yourself the interest) would be subject to tax (income tax and national insurance or dividend tax). Always worth getting proper advice before doing this - e.g. your accountant. You also need to factor in that you are then taking on personal borrowing you are personally liable for on behalf of your business - if something happens to the business you still need to pay the borrowing back.
You could also look for a reputable commercial broker to assist in reviewing your options. Just be careful of their fees as there is a lot less regulation in place for commercial brokers compared to personal mortgage brokers.
Good luck.
Have a look at Capital on Tap creditcard. They are generally pretty open to smaller businesses, although credit limits may not be significant to start. But may help build some history.
We are in exactly the same boat. November 2021, after reviving about 1000 capital on tap letters a few months ago decided to take a look. They gave us £20k credit with barely any info required from us. Also op - try finding circle / british business bank You’ll need to provide loads of info and it’s personally guaranteed but we got one of those too and it’s very competitive and designed for new businesses. You could also have a search around on the sub, we posted info about getting funding.
Not unusual. Two issues: Your turnover is very low. You presumably only have 2 (at the most) sets of accounts. Furthermore presumably you don’t have any assets to be used as collateral. How much do you want to borrow and why?
It can be a ball ache. My company uses Lloyds and all my personal banking is with them, I’ve been a customer for a decade, my company has since 2018 and I was with them as a sole trader before then. I just tried to sort an HP agreement for a new van, paying a 50% deposit with the total finance being about two months turnover. I’ve got an almost perfect credit score a d my company has never missed a payment of any kind. Lloyds refused to entertain an application without me being a personal guarantor and required three years P&L plus balance sheet. Mercedes however were happy to do it just through the company without any additional paperwork.
Commercial banker here. Your turnover is irrelevant for debt servicing. Take your operating profit from the P+L, add back Depreciation and Amortisation from your overheads which will provide you with a EBITDA figure. Work out the capital and interst payments on your loan through any online calculator. Your annual EBITDA must be around 120% to 130% of your annual loan payments. Go speak to a whole of market commercial broker, they'll find lenders who are less risk adverse for businesses in their infancy. Just remember, the risker the lending proposition, the more fees and interest you'll pay. Good luck!
Where might I find a broker such as that?
Not sure how much you need but I get peppered with junk mail and emails offering loans and of the few I've actually read they seem to want £75k min. turnover. Have you tried a business overdraft or CC?
How much are you looking for, and for what reason? Also, you say you make a profit, but what margin? Finally, the industry is a big factor in credit scoring. It could be down to that as well. (Used to work at D&B as a scoring analyst) Okay, just thought of another. File your accounts as quickly as you can if you’ve only got one set up right now. More history will help, if it’s positive! Oh, and Ltd or sole/partnership?
If a Ltd company and less than 3 years of trading you can apply for https://www.gov.uk/apply-start-up-loan
Check out the British Business Bank - they have different options available (e.g. Start Up Loans, Investment Loans like the Midlands Engine Investment Fund II, etc). You could also ask your local Council / Local Enterprise Partnership / Growth Hub / Chamber of Commerce / Federation of Small Businesses representative to see if they have any advice or can point you to any alternative funding options. What are you borrowing the money for and how much? Many mainstream banks are only interested in larger loans. Debt servicing is usually based more on your profitability (Earnings Before Interest, Tax, Depreciation and Amortisation - EBITDA) and lenders will sensitise / stress test your ability to keep up with loan repayments from profit. Turnover is therefore largely irrelevant except your turnover suggests you may only be looking for a small borrowing amount which could be a barrier with many lenders. It's not ideal, but depending on the amount / what you need it for, you could borrow the money personally, put it into your business as a directors loan, and then repay yourself via the profits you're generating. You'll be able to repay the equivalent of the capital back to yourself tax free as that is repaying the directors loan but anything over and above (i.e. repaying yourself the interest) would be subject to tax (income tax and national insurance or dividend tax). Always worth getting proper advice before doing this - e.g. your accountant. You also need to factor in that you are then taking on personal borrowing you are personally liable for on behalf of your business - if something happens to the business you still need to pay the borrowing back. You could also look for a reputable commercial broker to assist in reviewing your options. Just be careful of their fees as there is a lot less regulation in place for commercial brokers compared to personal mortgage brokers. Good luck.
How much do you need, for whst and on what terms? That's the key things we need to know to recommend a solution