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Small business loan application process

Looking to grow your business? Or just need a little extra working capital to keep your business moving? 

Our small business loans are available between £5,000 – £500,000 for almost any purpose.

We’re not a bank. Our lending criteria is different, and we look at more than just your credit profile.

Check your eligibility online in just two minutes, with no impact on your credit score, and you could receive your funds in as little as 24 hours.

How does the business loan work?

Unlike a traditional loan, Capify’s is paid back in very small amounts regularly. The repayments are completely automated so you don’t need to do anything. Many business owners love our regular payments, because they don’t have to save a large amount by a fixed date each month.

To be eligible for a business loan, you'll need to:

  • Turnover >£10,000 per month
  • Have at least 12 months’ trading records

The benefits of a Capify business loan

  • Raise from £5,000 - £500,000
  • Pay back little and often
  • No monthly lump sum
  • Opportunity to raise more funds

The Small business loan application process uncovered

For many small businesses, well-thought-out borrowing can increase the opportunities for growth and diversification, ultimately having a positive impact on profitability. Unfortunately, some business owners can find the process of applying for a loan confusing: from working out whether borrowing is going to be the best option through to selecting a suitable product, there can be plenty to consider. Covered below are the basics of the loan application process, giving you the information you need to successfully navigate the small business loan application process.

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Before you start the business loan application process

Prior to commencing a loan application, it’s important to answer the following questions in order to be as sure as you can be that a loan is right for your business:

 

1. Is a loan going to ultimately have a positive effect on your bottom line?

Loans cost money! That’s why it’s important to be clear that a loan is likely to have a beneficial
impact on profitability: using a loan to bail out a failing business may be a case of “throwing good
money after bad”. Financial data from your accountant, as well as advice from suitable professional advisers could help to inform sensible decision-making.

 

2. How much do you actually need?

Work out how the loan would be spent in advance to ensure you borrow a sufficient amount, but not too much.

 

3. How much can you realistically borrow?

Particularly if you are a new business or have had previous financial difficulties, you may only have a small amount of borrowing power! Bear this in mind when considering the viability of borrowing.

How do I go about getting a small business loan?

Currently there are three ways of applying for a small business loan:

 

1. Complete an online application

A popular option, an online application can be completed anytime or anywhere as long as you have an Internet connection. This isn’t just a quick and convenient method, it also gives you access to features that you can’t always get on the phone or in person. For example, when you apply online for a Capify loan, you’re able to complete a “soft” credit check (which gives an indication of how likely your loan is to be approved) in around 90 seconds!

 

2. Give Capify a call

If you prefer, you can call Capify to discuss a loan application. When you call us, you get exactly the same access to a loan as an online client, but will benefit from the expertise and assistance of our team.

 

3. Apply in person

Occasionally a business owner prefers to visit us in person. This is a rarely used option, mainly because it takes time and expense to visit in person and does nothing to increase your chances of a loan.

After applying, you'll need to go through the underwriting process

For regulatory purposes and also to manage risk, lenders need to have supporting evidence that you are who you say you are and that the information you’ve provided on your application form is
correct. The process of verification is known as underwriting. Underwriting takes place after you’ve successfully gone through the initial eligibility/approval process.

Applicants will need to provide:

 
  • Evidence of ID
  • Financial information on the business (including income, outgoings, profit, assets etc.)
  • Declare outstanding credit agreements (other borrowing)
  • Landlord references (if applicable)
  • Any other financial information requested

Applicants will also need to successfully pass a credit check – with different business lenders each having different criteria’s for approval. Being declined by one lender doesn’t mean you will be declined by all lenders.

If you need further information on this stage of the process, take a look at our article covering the steps required [internal link] before approval for finance can be given.

Getting a full approval for a small business loan

If your application successfully passes the underwriting process, you’ll get full approval.

If you haven’t passed the underwriting process, you will be declined for finance. In some cases this decision can be reversed (for example, if you have been declined due to missing information). In other cases the decision is final. Applicants can ask for further information regarding the reasoning behind the decision, but this won’t alter it.

Receiving your funds

Once your loan has been approved and all the necessary paperwork signed and returned, your funds can be released. The speed with which this happens depends on factors such as: the lender, your bank, the day of the week, and the time of approval.

Capify can release funds the same day if full approval is made before 11:30am. If approval is later than 11.30am, funds will be released the next working day.

Starting repayments on your business loan

The timing of repayments can be a critical factor in determining how easy it is to service the loan (make the necessary repayments). Many lenders provide products that are repaid through a fixed monthly repayment. Normally you will be asked when you want repayments to start and on what day of the month the payment should be taken. A direct debit is set up, with repayments being automatically taken from your bank account. The first repayment is usually due the month after you agree the loan.

In contrast, with Capify’s flexible solution, you’ll make tiny repayments on the MCA product and choose daily or weekly repayments. In our experience, tiny, regular repayments are more manageable for many businesses, helping to free up cash flow. Smaller, more regular payments mean there’s no need to try and put money aside in order to meet a big repayment once a month – it’s usually more sustainable to opt for smaller payments more frequently.

Arranging a small business loan with Capify

Our team are here to answer not only this question, but any others you may have about business borrowing. We believe that good-quality information is vital for our clients, enabling them to make the decisions which are right for them and their company. To find out more about our loan products and how you can take advantage of them, please get in touch.

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