Ask about lender requirements
Lenders may have different requirements for newer businesses and different product types. Ask early what trading history and supporting evidence are needed, whether the requested facility is available, and how the lender will assess the case. Do not assume the scheme creates an exemption from credit checks.
- Confirm product-specific minimum criteria.
- Explain the company’s age and ownership accurately.
- Check whether group trading information is relevant.
Build an evidence-based case
Where historical accounts are limited, a lender may request current management information, bank statements, contracts, pipeline evidence, cash-flow forecasts or information about the owners. The lender determines what is relevant. Forecasts should be realistic and supported by clear assumptions.
- Show how forecasts were prepared.
- Set out expected cash receipts, costs and repayment capacity.
- Describe the funding purpose and delivery plan.
Understand the risk and terms
If a facility is offered, review repayments against downside scenarios as well as expected trading. Lender terms, personal guarantees and security are determined case by case within scheme rules. The guarantee does not transfer repayment responsibility away from the business.
- Check interest, fees, repayment dates and covenants.
- Ask what security or personal guarantee is required.
- Do not borrow on the assumption that projected sales are certain.