Frequently Asked Questions

Here are some of the common questions we get asked about business loans. If you're wondering about the application process, what the lenders are looking for, or how it works, you can find the answer on this page. If you have a question that isn't answered here, get in touch with a Business Finance Specialist or email [email protected]

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How fast is it? How long will it take?

Our fastest case was completed in 1 ½ hours, from initial enquiry to funds in the business's bank account. Our record from enquiry to approval is just 7 minutes.

In our experience, the biggest factor in how quickly you’ll get finance is you. Most lenders will reply quickly (within 24 hours), and your dedicated account manager will work hard to keep things moving. If you’ve got all the documentation ready, it’s often possible to get the deal done within a day or two.

First, you’ll need to give us the key details about your business and what you’re looking for. This will only take a few minutes, and you can do it on our website or give us a call.

Once you’ve decided which lender(s) you’d like us to approach, the application time varies depending on the product and lender you’re dealing with – but it always helps if you’ve prepared in advance!

Lenders we work with are much faster than the banks
Takes seconds to see your options
Offers back within 24–48 hours for most cases
Money in account within days if you’ve got documents ready

How much can I borrow?

There are many different factors that affect how much you can get approved for when applying for a business loan, and each provider has their own process for determining eligibility.

The lender will consider various factors to find out how much your business is eligible for, and it’s important to know that you won’t be accepted for a principle you can’t afford to repay. As a rule of thumb, the maximum most providers will lend is about 10-30% of your annual turnover.

Your business's security (e.g. invoices or machinery) and profits are factored in too, and if you're looking to borrow a significant percentage of your turnover, lenders will want to see that borrowing money now will mean you generate more cash in the future.

Why not go direct?

You’re welcome to go direct to a lender if you have one in mind — but we're here to make the process of finding a business loan faster and easier for you.

We work with dozens of the UK's best lenders, so we can match you to the one that suits your requirements best
We work with these lenders every day, so we know what they're looking for, and can pick up the phone to them whenever you need
Not all lenders take direct applications, so to access their products you’ll need to go through a broker like us
In most cases, going through Funding Options doesn't add to the cost, and you'll get the same interest rate — or better — than going it alone

Can I repay early?

There are many ways of paying back a loan or line of credit, and the type of repayment depends on the lender. Some lenders will give you a repayment schedule with fixed monthly instalments, while others might be more flexible and accept early repayments.

Often, there’s a fixed amount you have to pay back, but sometimes the repayment can vary, depending on the distribution of interest.

Some lenders allow you to make early repayments without charging a prepayment penalty. However, it’s important to bear in mind that there might be extra costs if you decide to make early repayments, or even pay back all at once.

The best way to get an accurate estimate of how you can repay is to make an application with us — we can give more detailed information once we’ve found you the business finance that’s right for you.

What’s the next stage?

When you fill in the form on our website, you'll be automatically matched with more than 70 lenders by our highly rated service. Whether you’re looking for business loans, commercial mortgages, invoice financing, asset leasing, growth finance or something else, we can help. We provide you a list of all the funding options that best suit your needs, ranked by match score. It takes minutes, there’s no obligation, and it’s easy to use.

In some cases, we'll call you to get a bit more information about your business and accurately assess your request. We’ll explain what the next steps are, and we're here to help you throughout the process.

Even if you get referred straight to a lender, you can talk to us at any time ― we’ll guide you through the application process and give you all the information you need to make the right decision for your business.

What’s the interest rate?

Since there's a wide range of lenders offering business loans, there are also a lot of different interest rates. These interest rates vary from lender to lender, and also depend on the specifics of your business circumstances.

For standard products like secured loans, mortgages and invoice finance, the big banks are hard to beat on price because they’re the biggest lenders in the market with huge economies of scale. But another of the reasons they’re among the cheapest finance providers is because they won’t deal with businesses they perceive as high risk — which is why many businesses get turned down.

Having said that, we can often get finance for businesses cheaper than the banks, because we work with a wide range of lenders that are suitable for companies in various situations outside the banks' typical criteria. In other words, finding a better fit for your business can often bring the cost down.

It's also important to note that many of these lenders will require less security than the high street banks, particularly for loan sizes under £300,000.

Many alternative lenders may also specialise in lending to businesses where there isn't as much information available (e.g. you haven’t been trading that long, or perhaps there isn’t any security available), or are serving businesses that the banks can't help.

Will my credit score be affected?

Signing up on our website, seeing your funding options, and talking to one of our Business Finance Specialists won’t have an effect on your credit score. We, Funding Options, do not credit check you. However, many of the lenders we work with require a credit check as a normal part of their application process. For this reason, we may ask for your ‘permission to search’ to pass on to a lender in order to speed up your application and make the process as straightforward for you as possible.

You will never be credit checked by a lender we work with unless you have given your explicit consent. Personal credit checks are highly regulated, and you have rights as an individual for your personal data to be protected.

If you have any questions about credit checks and permission to search in relation to your finance enquiry, one of our team will be happy to discuss it further with you.

Do I need a personal guarantee?

A personal guarantee is an agreement between you and a lender that you’re personally responsible for the loan or line of credit if your business defaults on payments. Lenders sometimes ask you to give a personal guarantee as additional security — which means they can pursue you personally if your business defaults.

You can find out more about personal guarantees and why you might consider giving one here.

You don't always need to offer a personal guarantee, but they're commonly used, particularly if you're looking for an unsecured loan or a flexible product such as revolving credit facilities.

Is my home the security?

People often confuse personal guarantees with offering security on their home – while both are common ways to secure business finance, they’re not the same thing. Often, lenders want to know if you’re a homeowner because that means you’ve been through due diligence previously (in order to get a mortgage, for example) – it doesn’t necessarily mean they want a charge over your home.

Quite simply, if you’re a UK homeowner it’s often faster and easier for the lender to do their due diligence — and that’s why they want to know. There are still lots of options for non-homeowners though.

While you don’t have to offer a personal guarantee, for some businesses it can make the difference between getting finance and being rejected. Fundamentally, a personal guarantee means you agree to do your best to repay the money if things don’t go to plan.

Please note, you should always read the specific terms of a personal guarantee before agreeing to anything, and you might also want to talk to a qualified lawyer.

Will this affect my future borrowing?

In our experience, the main factor that affects your future borrowing is you.

When you pay back a business loan on time, your credit score might get better because it proves that you’re reliable, which in turn could have a positive affect on future loan applications. On the other hand, if your business defaults on repayments, it could harm your chances for future borrowing because lenders will see you as higher-risk.

It's also not a good idea to apply for lots of credit all at once, because this may harm your credit score. This is one reason you may choose to work with Funding Options — we can help you narrow down your options quickly, so there's no need to apply to lots of different lenders on your own.

Who are the lenders?

We’re specialists in finding the right lender for your firm, so we work with more than 70 of the best providers across the UK ― from major high street banks to challenger banks, from independent lenders to smaller specialists.

Each provider is carefully selected following a due diligence process and a trial period, to ensure our panel represents the industry-leading lenders from each specialist area. We're actively doing business with the lenders on our panel, and continually reassess performance to make sure our customers receive the best service available. Quite simply, if a lender isn't delivering a great service to our customers, we will stop working with them.

How do you make money?

Using our service is completely free and no-obligation, and we don't charge our customers a fee. You can use our matching tool, look at your options, or speak to one of our Business Finance Specialists with no strings attached. If you decide to go ahead, and a lender accepts your application for finance, they pay us a commission based on our standard terms. Normally, the cost to our customers is the same as if they’d gone direct to the lender.

We’re happy to disclose further commission details on request – if there’s anything else you’d like to know, feel free to get in touch.

What is a profit and loss statement?

Profit and loss is one of the factors lenders will look at when assessing your loan application. The profit and loss statement summarises revenues and expenses of your company during a fiscal quarter of the year. With these records, the lender can get a bigger picture of your company’s ability to generate profit.

Along with the balance sheet and the cash flow statement, the profit and loss statement is one of the standard financial statements that a lender may want to see.

What are “filed accounts”?

According to the Companies Act 2006, every company registered in the UK is obligated to provide financial documentation to Companies House every year. These accounting records usually contain:

all money received and expended by the company
a record of all assets and liabilities of the company

Sometimes, filed accounts are delivered by an accountant on behalf of the business owner ― if you haven’t heard of filed accounts before, your accountant can give you more information, or you can find out more on the Government's website.

How do I give you my documents?

If you decide to go ahead with one of the lenders we work with, you’ll usually have to provide documents like recent bank statements for the assessment of your application. We'll usually ask for your docs beforehand to assess your request as accurately as possible — then, if you decide to go ahead, we'll pass them on to the lender with your permission.

The best way to send us (or a lender) your bank statements and other docs is as a PDF (portable document format) file.

To get your bank statements as PDFs, you can usually download them from your online banking account. If you’re not sure how to download your statements, get in touch with your bank.

You can then send the PDF documents in an email to your dedicated Business Finance Specialist at Funding Options.

Will you sign a non-disclosure agreement (NDA)?

No, we don’t sign NDAs as they make it difficult for us to do our job in terms of referring businesses to lenders.

We’re a regulated business, so we’re obliged to maintain strict confidentiality as part of our ongoing licence to trade. In other words, you don't need to ask us to sign an NDA any more than you’d ask a GP or a Chartered Accountant to sign one. More importantly, there’s nothing in a standard NDA that offers any additional confidentiality beyond our Privacy Policy and Terms of Service.