The short answer
To qualify for a business loan in the UK, lenders mainly look at four things: your trading history, annual turnover, creditworthiness, and whether you can afford the repayments. You’ll usually need to be a UK-registered business with a UK-resident director aged 18 or over.
Most lenders want at least 12 months of trading and a minimum turnover often pitched around £100,000. That said, the criteria vary a lot, and there are routes for startups and for businesses whose credit isn’t perfect. Run through the checklist below to see where you stand.
Before you spend an afternoon on an application, it pays to know where you stand. Still getting to grips with the basics? Our guide to how business loans work covers those first. Then come back and run the quick checklist below.
Do you qualify? Quick checklist
- ✓ Your business is registered and based in the UK
- ✓ At least one director or owner is a UK resident, aged 18 or over
- ✓ You have a UK business bank account
- ✓ You have some trading history, or a solid plan if you’re a startup
- ✓ You have recent figures to hand (bank statements, accounts, management accounts)
- ✓ Your repayments would be affordable against your cash flow
- ✓ You know what the money is for and how it will help the business
Ticked most of them? Good, you’re in decent shape. The rest of this guide unpacks what each one really means, how much you might borrow, and the things that quietly sink applications so you can sidestep them.
What lenders look at when assessing eligibility
Every lender weighs things a little differently, but they’re all chasing the same answer: can this business comfortably repay what it borrows? Here’s what feeds into that.
Trading history
Most lenders want to see at least 12 months of trading, and some look for two to three years. The longer your record, the more stability it signals. Newer businesses aren’t shut out, but they’ll often find a better fit with startup finance or government-backed options.
Annual turnover
Minimums are all over the place. Some lenders set none at all, others start at a few thousand pounds a month, and larger facilities may want turnover of £50,000 to £100,000 a year. Around £100,000 is one of the benchmarks you’ll see most often, but there’s no universal threshold, and the British Business Bank points out that each lender sets its own. The stronger and steadier your turnover, the more you can usually borrow.
Creditworthiness
Lenders check the business and, in many cases, the directors too. A track record of paying on time counts for a lot. Outstanding County Court Judgments (CCJs) can be a sticking point, though some specialist lenders will still consider you if those judgments are older or settled.
Affordability
This is what it really comes down to. Lenders want to see your income covering the repayments with room to spare, often measured as a debt service coverage ratio. Steady, profitable cash flow does more for your case here than almost anything else.
Business structure
Whether you’re a sole trader, a partnership, or a limited company affects which products fit and whether you’ll be asked for a personal guarantee.
Many UK lenders look for at least 12 months of trading history, though startup finance and government-backed schemes exist for brand-new businesses.
Eligibility at a glance: how it varies by lender type
| Lender type | Trading history | Turnover |
|---|---|---|
| High street banks | 2 to 3 years | Higher minimums |
| Alternative / fintech | 6 to 12 months | Lower or flexible |
| Government-backed | Startups welcome | Often none |
| Specialist lenders | Case by case | Flexible |
Figures are general industry guidance and vary by lender and product. Confirm specifics before applying.
Each lender type comes with trade-offs: high street banks offer competitive rates but stricter criteria; alternative and fintech lenders are more flexible but can cost more; government-backed options suit new businesses within set limits; and specialist lenders will consider poor credit or unusual cases.
Government-backed options include the British Business Bank’s Growth Guarantee Scheme, which is open to UK businesses with a turnover of up to £45 million that generate more than half their income from trading. We explain it in our Growth Guarantee Scheme guide.
Eligibility by business type
- Sole traders. Plenty of products are open to you, though your personal credit will carry more weight.
- Limited companies. The widest choice of all, especially once you’ve got filed accounts behind you.
- Partnerships. Well catered for. Expect every partner to be assessed.
- Startups. Your trading history is thin by definition, so startup loans and government-backed schemes are usually the best fit.
- Imperfect credit. You’re not ruled out. Specialist lenders look at the whole picture rather than one number, and routes like asset finance or a merchant cash advance can be more realistic.
- Seasonal businesses. Eligible, but lenders will want to see how the repayments hold up in your quieter months.
Why business loan applications get rejected
Most rejections come down to a handful of things:
- Affordability concerns. The numbers don’t show comfortable repayment.
- Incomplete or inaccurate information. Small errors create doubt, and doubt creates delay.
- A weak or missing business plan. Lenders want to see the money put to good use.
- Sector restrictions. Some lenders simply don’t fund certain industries.
- Credit issues. Recent missed payments, or CCJs that are still unresolved.
The good news is that most of these are fixable before you apply. If credit is your main worry, our guide on how to improve your chances of approval with bad credit goes deeper.
What you will need to apply
- Proof of identity for the directors or owners
- Business bank statements, usually the last three to six months
- Recent accounts or management accounts
- Details of existing debt or finance agreements
- A short summary of what the loan is for
- For secured borrowing, details of the asset
How Greenwood Capital helps
We’re a UK business finance partner built on fast, flexible funding with real people at the helm. Instead of leaving you to guess at the criteria, we look at your business, tell you where you stand, and match you to finance that actually fits. No jargon, no pressure, and no pushing you towards something that doesn’t suit you.
If you want a straight answer on whether you qualify, have a word with our team and we’ll walk you through it.