Refinancing guide · Sorbus Finance
What do lenders look for when you refinance business debt?
Quick answer
There are no universal eligibility rules for business refinancing. Lenders commonly look at trading history, recent accounts and bank statements, how existing debts have been managed, the reason for refinancing and whether the new repayment appears affordable. Many also assess directors and may ask for guarantees or security. Preparing clear documents makes assessment easier.
What factors do lenders commonly consider?
Each lender sets its own policy and may weigh factors differently. We do not publish minimum turnover, trading-age or credit-score figures because they vary between lenders and change over time.
| Area | What a lender may want to understand |
|---|---|
| Trading history | How long the business has operated and how consistent income has been |
| Financial performance | Profitability and cash generation from accounts and management figures |
| Existing commitments | Who you owe, how much, and how reliably payments have been made |
| Purpose | Why you want to refinance and what changes as a result |
| Affordability | Whether the proposed repayment fits evidenced cash flow |
| People | Directors and owners, their history and sometimes personal credit |
| Security | Whether assets or guarantees are available or required |
Which documents should you prepare?
Lenders vary, but the list below covers what is commonly requested. Having it ready tends to reduce back-and-forth.
- Recent filed accounts, where available, covering the period the lender requests
- Current year management accounts
- Recent business bank statements, often several months
- A debt schedule listing every facility, balance, repayment and end date
- Copies of existing agreements and written settlement figures
- Identification and address details for directors or owners
- A short note explaining the purpose and any unusual items in the figures
Can you refinance with missed payments or adverse credit?
Possibly, but it depends entirely on the lender and the circumstances. Some lenders will consider applications where there have been past problems, especially with a clear explanation and improved recent conduct. Others will not. Expect any offer in that situation to reflect the lender's view of risk.
If arrears are current and growing, more borrowing may not be the right answer. Free independent debt advice is worth considering first.
Will I have to give a personal guarantee?
Many business lenders ask directors for personal guarantees, including on loans described as unsecured. A guarantee can make you personally liable if the business does not pay, which could put personal assets at risk depending on its terms. Unsecured does not mean there is no personal exposure. Take independent legal advice if you are unsure.
Document pack
- Filed accounts
- Management accounts no more than a few months old
- Bank statements for all business accounts
- Debt schedule and settlement figures
- Explanatory note on purpose and any anomalies
- Director ID and details of existing guarantees
When should you not borrow to refinance?
Be candid with yourself. Refinancing is probably the wrong move if:
- Applying to multiple lenders at once without understanding the type of credit search each uses
- Signing a personal guarantee you have not read or taken advice on
Free, independent help is available from Business Debtline. Check its eligibility and remit for your business.
General information, not financial, legal or tax advice. This page explains concepts in a UK context. Whether any option is available, and on what terms, depends on the lender, the specific agreement and your business's legal structure. Sorbus Finance is a broker, not a lender. Read our initial disclosure and commission disclosure.
Frequently asked questions
Do sole traders and partnerships qualify?
Some lenders lend to sole traders and partnerships, others only to limited companies. The legal structure also affects personal liability, because sole traders and general partners are typically personally responsible for business debts.
Does a soft search affect my credit file?
Soft searches are generally not visible to other lenders, but practice varies. Ask the lender or broker which type of search they will run before you consent.
What if my accounts are out of date?
Many lenders rely on recent figures, so bringing accounts up to date can help. Some may accept management accounts in the meantime, depending on their policy.
Prefer to talk it through?
Leave your details to request a discussion about your borrowing. This form is an enquiry, not a loan application. Ask the adviser what consent and credit checks would be needed before a lender application proceeds.