New businesses are usually assessed on the strength of the directors and the proposal rather than trading history, because there is little or no track record to review. Expect lenders to ask for a larger deposit, personal guarantees, or both. Amounts are decided case by case and are not guaranteed.
Lenders will typically want to see a credible plan: what the money buys, how it generates income, and what happens if revenue arrives more slowly than forecast. Personal credit history of the directors carries more weight than it would for an established company.
Asset finance can be more accessible for a start-up than unsecured lending, because the asset provides the lender with security. The trade-off is real — if you fall behind, the lender can repossess the asset, which may be the very thing your business depends on to trade.
If a personal guarantee is required, you become personally liable for the debt if the business cannot pay. That can put your own money, and in some cases your home if the guarantee is supported by a charge, at risk. Take legal advice before signing one.
We can approach lenders on our panel who are comfortable with newer businesses, but no broker can promise a yes. The outcome depends on your circumstances and the lender’s assessment.