Facility minimums and terms
Scheme products include term loans, overdrafts, asset finance, invoice finance and asset-backed lending. Minimum facility amounts are £25,001 for term loans and overdrafts, and £1,000 for asset, invoice and asset-backed finance. Term loans and asset finance run from three months to six years; overdrafts, invoice finance and asset-backed lending run from three months to three years.
- Term loans and overdrafts: £25,001 minimum.
- Asset, invoice and asset-backed finance: £1,000 minimum.
- Invoice finance has a maximum scheme term of three years.
Working capital
Working capital is a legitimate business purpose that may be funded, subject to scheme restrictions. This is not limited to exceptional cases. The scheme’s rules govern permitted purposes; a lender separately decides whether to offer a particular product and whether the application meets its credit and product criteria.
- Describe the business need and planned use of funds.
- Check which scheme product the lender offers for the request.
- Borrowers remain responsible for all repayments.
Stock and inventory
Purchasing stock or inventory may be a legitimate business purpose, subject to scheme restrictions. Explain the planned purchase, amount and expected repayment source in the application. The lender assesses the proposed facility and the business, but lender product availability does not change the scheme rules on permitted purposes.
- Set out the stock or inventory funding need.
- Confirm available product types and terms with the lender.
- Do not assume an application will be approved.
Equipment and machinery
Equipment or machinery may be proposed as a legitimate business purpose, subject to scheme restrictions. Asset finance is among the scheme product types; term lending may also be discussed where appropriate. The lender determines product availability, assesses the application and sets terms, so the scheme does not guarantee a particular structure.
- Explain the equipment or machinery requirement.
- Asset finance terms range from three months to six years.
- Check the lender’s offer, costs and repayment obligations.
Vehicles
A business may discuss vehicle finance as a proposed legitimate business purpose, subject to scheme restrictions. Whether a particular vehicle and facility can be financed depends on the applicable scheme rules and the lender’s available products and credit assessment. Confirm the proposed use, product and terms directly with an accredited lender.
- Explain how the vehicle relates to the business purpose.
- Ask which scheme product, if any, is available.
- Review full costs, security and repayment terms.
Growth, expansion and investment
Funding for business growth, expansion or investment may be considered where it is a legitimate business purpose and complies with scheme restrictions. Explain the project, amount and expected repayment source. An accredited lender makes its own credit decision and decides which eligible products it offers; the scheme does not promise approval.
- Describe the planned investment and expected business use.
- Provide a supportable repayment plan.
- Check product availability and terms with the lender.
Refinancing existing borrowing
Refinancing may be possible under scheme rules, but it is not automatic and restrictions apply. Disclose the existing facility, lender, balance and reason for refinancing so the accredited lender can assess the request against the scheme rules and its credit criteria. Do not assume every existing borrowing can be refinanced.
- Provide details of the borrowing being refinanced.
- Explain the reason and repayment plan.
- Confirm eligibility with the lender before relying on refinancing.
Lender assessment
An accredited lender makes the credit decision, assesses affordability and suitability, and sets the terms of any facility. It may not offer every product or approve every application. This product and credit discretion operates within scheme rules and does not change which business purposes those rules permit.
- Check product availability with an accredited lender.
- Compare total cost, security and term.
- Borrowers remain liable for 100% of their facility.