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Learn how credit checks & credit scores affect business loans

Credit checks and scores don’t have to be intimidating or daunting. First of all, not all lenders will use your credit check as the sole factor in a lending decision. There are other factors to consider too, including how long you’ve been in business, your profitability, the amount you want to borrow, and how long you want to spend paying it back.

It’s more reassuring for small business owners to see that lenders will have a full view of their business and its affordability. The credit check is just one part of that.

What is a business credit check?

What is a business credit check?

Your business has a credit history just like you do. When a lender does a credit check, they mainly want to see you’ve paid all your previous bills and credit payments on time. The more accounts you’ve closed on time and in full, the better.

If you’re still fairly new to business and don’t have much of a history, that can be okay too. Every lender’s different. Your credit check can still get a thumbs up, but you might only be able to borrow a certain amount, or the interest rate will go up a bit.


Soft and hard checks

There are two types of credit check. A hard check will show up on your credit report as a search, while a soft check won’t. Several hard checks in a short period can have a negative effect on your score, so look for soft checks where you can.


Sole traders and limited companies

If you’re a sole trader, a lender will want to do a personal credit check instead of a business credit check. Your own personal credit history will be checked because your business doesn’t have a credit identity – you are your business. If you run a limited company, the lender will just look at your business’ score.


What is a business credit score?

What is a business credit score?

The main credit reference agencies are Experian, Company Check, CreditSafe, and Equifax. Each one will give your small business a slightly different score, so it’s smart to keep an eye on them all.

Each service is slightly different, but they usually give your business a score of 1-100 (the closer to 100 you are, the lower the risk). They’ll also show your payment history with customers and suppliers, as well as any defaults or CCJs. Many of these services offer a pretty clever bonus feature too – you can credit check your own customers and clients as well as yourself.

Every lender will use either one credit reference agency or a mixture to decide how affordable the loan will be for you and your business. Before you start looking for finance, it’s important to sign up to at least one of them and check how your score looks. This avoids disappointment and makes sure you’re clued up before you start the process.

What impacts your businesses credit score?

What impacts your businesses credit score?

Lenders want to see a healthy credit report that shows you pay your bills on time, keep up with all repayments, and you’ve already borrowed a responsible amount of credit.


Factors affecting your business credit score: Good and bad payment habits (that includes bills, credit cards, suppliers etc).
● Any public records that would affect your ability to repay, including collections,
judgments and bankruptcies.
● How much credit you still have to pay off to other lenders and providers.
● How many years your business has been active.
● Outstanding balances and money already owed.
● Recent credit applications or hard searches.
● How up to date your Companies House info is.
● Whether you’ve met HMRC deadlines or not.


How will your credit score affect eligibility for business loans?

How will your credit score affect eligibility for business loans?

Traditional lenders often want to see a spotless credit report, but no one’s perfect. Alternative lenders like Capify can offer a more flexible solution.

It doesn’t matter if you’re quite new to business. If you’ve been trading for 12 months or more, we can offer fast approval, fixed payments, and flexible repayments.


Raise up to 130%* of your average monthly turnover

Raise up to 130%* of your average monthly turnover

Unlike a normal bank loan, Capify’s Business Loan is repaid in manageable daily or weekly amounts. It’s up to you how regular the repayments are. It’s automated too, so you don’t have to do a thing. The full loan will be paid off in 6 to 12 months.

Loans are available from £5,000 to over £500,000, and we won’t leave you hanging around. Get a quick quote now to find out how much your business can raise with Capify.

To be eligible for a Business Loan, you’ll need to:

● Run a UK-based business as a limited company
● Process more than £10,000 a month through your business bank account
● Have at least 12 months’ trading records


The personal touch


You’ll work with your personal account manager on a one-to-one basis. They’ll answer all your questions, talk you through the application, and help you get your cash fast once approved.

UK-based support

We’re here to help. All our account managers are based in our South Manchester office.

Regular repayments

Capify provides flexible, manageable finance, repaid in small amounts. The process is fully
automated, so you can focus on the important things.


Try our business loan affordability calculator


Find out how much your small business could raise with a super fast Capify quick quote.

*Subject to terms


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