Business funding: who can apply and what to prepare
You know what your business needs the money for. But will a funding provider consider your company, and what information will it want?
There isn’t one set of requirements for every provider or type of funding. This guide explains what providers commonly look at, what to have ready and how to prepare without creating unnecessary work.
What do funding providers look at?
Providers want to understand your business, why you need the money and how the funding will be repaid. The importance of each factor depends on the type of finance.
| What they may consider | What it means |
|---|---|
| How long you’ve been trading | The business’s track record and how much financial information is available. |
| Sales and business costs | How much money the business brings in and what it needs to spend. |
| Existing borrowing | What you already owe and the payments you’re committed to. |
| Credit history | How the company, and sometimes its directors, have handled borrowing and payments. |
| The purpose of the funding | What the money will pay for and how it supports the business. |
| The assets or invoices involved | For asset or invoice finance, the provider will also assess the equipment or customer invoices it would fund. |
Being a limited company does not, by itself, tell you which funding options are available. Providers have different requirements, so a business that does not fit one provider may fit another.
Does a new company have to wait?
A shorter trading history can mean fewer options because there is less information showing how the business performs.
It does not mean every provider requires the same number of years in business. Requirements vary by provider and product. Be clear about when the company started trading and what records are available.
Start with a clear explanation of the need
Before approaching a provider, write down:
- What the money will pay for.
- How much you need and how you arrived at that amount.
- When you need it.
- How the business expects to meet the payments.
For example, “We need £30,000” gives a provider less context than “We need £30,000 for a machine that will increase production, and we have a supplier quote.”
You don’t need a lengthy presentation to explain the basics. A clear description and supporting figures are a useful starting point.
Have the main business information ready
A provider may ask for:
- Company accounts: records showing the business’s financial position and results.
- Recent bank statements: showing money coming into and leaving the business.
- Existing finance details: loans, leases and other borrowing, including regular payments.
- A cash flow forecast: an estimate of money expected to come in and go out over the coming months.
- Identity and company ownership information: to check who is applying and who owns the business.
You may also be asked for your annual turnover. This means sales over a year, before taking away business costs. It is different from profit, which is what remains after costs.
Ask which documents the provider needs and what period they should cover. You may not need everything on this list.
Prepare information about what you’re funding
A business loan
Have a breakdown of how you intend to use the money and consider how the repayments would fit alongside your existing costs.
If the spending will take time to generate income, explain how the business would cover payments in the meantime.
A vehicle, machinery or equipment
A supplier quote can help establish the price and exactly what you want to buy. Include whether the item is new or used and any relevant details, such as its age or mileage.
If you want to raise money against something the company already owns, have details of the item and any finance still owed on it.
Unpaid customer invoices
Prepare a list showing who owes you money, how much is owed and when payment is due. Make a note of overdue payments or disputes.
Be ready to explain what you sell and how long customers normally take to pay.
Be clear about anything that needs explaining
If sales fluctuate, a customer has paid late or the business has had payment difficulties, prepare an accurate explanation.
Check that the figures you provide agree with your records. Where you use an estimate, make that clear.
A provider may need more information to understand the situation. Avoid assuming that a difficulty will either be ignored or automatically rule you out.
Using CapSage to find a provider
CapSage helps UK registered private limited companies look for a funding provider. You must be authorised to act for the company and be seeking funding for business purposes.
You don’t need a full application pack to start. Our assessment asks about your business, what you need the money for and relevant details about assets or invoices. It does not ask you to upload accounts, bank statements or identity documents.
Have your company and contact details ready, with access to your email address and UK mobile number for verification.
If we identify a suitable provider, we’ll introduce you. The provider will explain what it needs next and decide whether to offer funding.
Before you accept an offer
Preparation helps you explain your business. It also helps you ask better questions about the offer.
Check the total cost, when payments are due and what happens if circumstances change. If the agreement involves business assets or a personal promise to repay, read Personal guarantees and security before deciding.
Find a funding provider
Tell CapSage about your company and what you need the money for.
You don’t pay a fee to use CapSage’s assessment and matching service.