Asset finance for a new business with no trading history
Most banks want two or three years of filed accounts. Specialist lenders will look at the director’s experience, the asset, and the contract the asset will service.
- Businesses trading under 12 months considered
- Directors’ sector experience carries real weight
- Asset quality and resale market assessed, not just accounts
- Personal guarantee often required — we explain exactly what that means
The difficulty for a new business is not that lenders think you are a bad bet. It is that the standard assessment method — filed accounts showing consistent turnover — simply does not exist yet. An automated scorecard has nothing to score, so it declines.
Specialist asset finance lenders approach this differently. Because the agreement is secured against the asset, and because many will underwrite by hand, they can assess things a scorecard cannot: how long the director has worked in the sector, whether they previously ran a business doing the same thing, whether there is a signed contract or established customer the asset will service, and how readily the asset could be resold if the business did not succeed.
In practice, a new business started by someone with fifteen years’ experience in the trade, buying a mainstream asset with a strong second-hand market, to service work they already have lined up, is a perfectly fundable proposition. A new business with none of those things is genuinely harder, and we will say so.
What do lenders look for when a new business applies for asset finance?
Relevant trade experience is the single strongest factor. Lenders also weigh signed contracts or committed work, a mainstream asset with a deep resale market, a deposit, a clean personal credit file, and a realistic, evidenced forecast.
- Relevant experience. Years spent working in the same trade, ideally documented, is the single strongest factor.
- Contracts or committed work. A signed contract, a letter of intent, or an established customer relationship shows the asset has a job to do from day one.
- A mainstream asset. Assets with a deep resale market are easier to fund than bespoke or highly specialised ones.
- A deposit. Contributing capital reduces the lender’s exposure and demonstrates commitment.
- A clean personal credit file. With no business history to assess, the director’s personal credit position matters more than it otherwise would.
- A realistic forecast. Not an elaborate business plan — simply a credible, evidenced view of what the asset will earn.
Personal guarantees — understand these properly
Most new-business asset finance will require a personal guarantee from the director. This is a serious commitment and you should be clear about it before signing anything.
A personal guarantee means that if the business cannot meet the payments, you are personally liable for the shortfall. The limited company structure does not protect you from a debt you have personally guaranteed. In practice, lenders will normally recover and sell the asset first and pursue the guarantee only for any remaining balance — but that balance can still be significant.
We will always tell you when a guarantee is required and what it covers. If you are not comfortable with it, that is a legitimate position and we would rather you decided that before signing than afterwards. Consider taking independent legal advice on any personal guarantee.
Before you enquire: what makes a case work
Adverse credit or a standing start does not rule finance out, but it changes what a lender needs to see. Three things decide most of these cases: what you can put down, what the asset is, and what actually happened. Knowing where you stand on those before you get in touch saves everyone a conversation.
A deposit is usually what makes it work
Typically ten to twenty per cent, and nearer twenty where there is a recent default. Lenders ask for one where there is adverse credit, a new business with no trading record, a specialist asset, or a private-sale purchase where valuation is harder to verify — it reduces their exposure, and it is often the single thing that turns a marginal case into a viable one. The more you can put down, the more lenders will look at it.
Owning your home helps
On a non-standard profile it widens the panel noticeably, because it supports the personal guarantee most lenders will want. It is not a requirement and plenty of agreements are written without it, but if you are a homeowner say so early — it changes which lenders will look at the deal.
The asset does a lot of the work
Hard assets with a serial or registration number and a real second-hand market — plant, machinery, commercial vehicles — are far easier to place than soft assets such as a fit-out, IT or software, which lenders rarely fund at all on a non-standard profile. What you are buying matters as much as who is buying it.
What happened, and when
Settled or unsatisfied, how long ago, and what has changed since. A satisfied CCJ from three years ago against a business now trading profitably reads very differently from an unsatisfied one from last month. Have the detail ready rather than hoping it will not come up — it will, and the story usually helps.
When it is genuinely difficult
Being straight with you: outstanding debt that has not been paid, or an IVA, is very hard to place. So is an undischarged bankruptcy or an active winding-up petition, and so is the combination of no deposit, no trading history and a soft asset. That is not an automatic no and we will still look — but if that describes you, expect to need a deposit and expect it to take more than one conversation.
Common questions
Can I get asset finance for a new business with no trading history?
Yes, though the assessment works differently. With no filed accounts to review, specialist lenders weigh the director’s experience in the sector, the quality and resale market of the asset, any contracts or committed work the asset will service, and the director’s personal credit position. A new business run by someone with substantial sector experience, buying a mainstream asset for work already lined up, is a fundable proposition. A personal guarantee is usually required, and all finance is subject to status and lender approval.
How long does a business need to be trading to get asset finance?
High-street banks typically want two to three years of filed accounts. Specialist asset finance lenders will consider businesses trading under twelve months, and some will consider a business from day one where the director has strong relevant experience and the asset is mainstream. There is no universal minimum — it depends on the lender and the strength of the wider picture.
Will I need to give a personal guarantee?
For a new business, usually yes. A personal guarantee makes you personally liable for any shortfall if the business cannot meet the payments, and the limited company structure does not shield you from it. Lenders normally recover and sell the asset first, pursuing the guarantee only for the remaining balance. We will always tell you up front when one is required, and we would suggest taking independent legal advice before signing.
Do I need a business plan?
Rarely a formal one. What lenders want is evidence that the asset will earn its keep — a contract, a committed customer, or a credible explanation of the work it will do. A short, honest, evidenced summary is more useful than a lengthy document.
Can a sole trader get finance for a brand new venture?
Yes. Sole traders are assessed on personal credit history and relevant experience rather than company accounts, so a new sole trader venture is not inherently harder to place than a new limited company. See our page on sole trader asset finance for more detail.
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Tell us what happened
If you have been declined, tell us who by and why if you know. It genuinely helps us point you at the right lender first time rather than testing the market blind.
CW Asset Finance is a credit broker, not a lender, and will receive a commission from the lender that funds your agreement. All finance is subject to status, affordability and lender approval. Nothing on this page is a quote or an offer of finance, and no outcome is guaranteed. CW Asset Finance is an Appointed Representative of Rural Finance Limited, which is authorised and regulated by the Financial Conduct Authority (FRN 630701). Tax treatment depends on individual circumstances and may change — take advice from your accountant.