Do lenders use same criteria in deciding a business loan?

Cheers

OK, so there is no advantage then?

WellKnownSid

Cheers wrote: »

OK, so there is no advantage then?

Advantage, as in will they ignore your credit history? No.

jonesMUFCforever

Cheers wrote: »

OK, so there is no advantage then?

Banks will not lend to you on personal loan terms for a business venture - they will transfer you to a business manager - they will expect you to have a business plan and they will expect you to put some hard cash into it yourself.

I would imagine they might lend unsecured up to say £5k or so but anything over that they might ask for security.

I don't think you have said what the money is for so it is difficult to advise further.

Caz3121

If you are currently unemployed you could look into the New Enterprise Allowance
https://www.gov.uk/government/collections/new-enterprise-allowance-campaign

bris

There is no benefit to a business loan.


As a sole trader you are subject to the same rules as personal loans, you can either meet their criteria or not. Once you mention it's for business purposes makes no difference, either you have assets to put up against it or you don't.


A business loan would be for a ltd company would be looked at in a similar way, you would need either a good plan or trading accounts depending on whether you are trading or starting up. regardless they will want you to share the risk, that means putting up security to cover the loan.

The old days are gone, there is no such thing as the friendly manager who has the final say and can approve you on the spot.


These days it's a relationship manager who takes down your details and all relevant info regarding plans, security etc then pass it all over to a team who put your numbers into a computer, the computer decides if it's viable. You won't even get that far if your credit record is not good, even with security as the last thing they want to do is repossess your house with the publicity it brings.


The higher risk lenders will have no problems repossessing your home, but they want bigger up front fees, higher interest and more security than they need.

Playing_with_Fire_2

There is also the matter of whether there is a business that is currently making money. It is easier to sell an expansion than starting from scratch.