Credit and Underwriting

Adverse credit describes negative information in a credit history, such as missed payments, defaults or court judgments, relevant to a lender’s assessment.

An affordability assessment examines whether a borrower can meet the proposed repayments alongside its other commitments, using the lender’s criteria.

An aged creditors report lists amounts owed to suppliers, grouped by age or overdue period.

An aged debtors report lists money owed by customers, grouped by how long invoices have been outstanding or overdue.

A Companies House filing is information or a document submitted to the UK register for a company or other registered entity, such as accounts, a confirmation statement or charge particulars.

A credit score is a numerical indicator produced by a credit agency or lender to summarise selected information about credit risk.

A credit search is a check of information held by a credit reference agency about an individual or business.

Creditworthiness is a lender’s assessment of how likely a borrower is to meet its financial obligations on the proposed terms.

A debenture in UK secured business lending is commonly a document granting a lender security over specified company assets, often using fixed and floating charges.

Debt service coverage ratio compares a defined measure of cash available for debt payments with the principal and interest payments due over the same period.

EBITDA is earnings before interest, tax, depreciation and amortisation, used as one measure of operating financial performance.

A fixed charge is security attached to identifiable assets, with restrictions on dealing with those assets determined by the charge and applicable law.

A floating charge is security over a changing class of company assets that generally allows ordinary business dealings until a specified event fixes the charge.

A gearing ratio measures financial leverage by comparing debt with equity or another stated measure of capital.

A hard credit search is a credit-file check normally associated with a formal credit application and visible to other lenders on the relevant personal credit report.

Management accounts are financial reports prepared for internal business management, commonly covering more recent trading than filed annual accounts.

A personal guarantee is a legally binding promise by an individual to meet specified business obligations if the business does not satisfy them.

A soft credit search is a credit-file check that is generally not visible to other lenders as an application for credit on the person’s report.

Underwriting is the process a finance provider uses to assess an application’s risks and decide whether to offer funding and on what terms.