Credit checks – get in the best shape for approval

When you’re applying for finance, credit checks play an essential role in the assessment process, whether you’re looking to take out a business loan or FlexiPay. Here, we’ll walk you through all the stages of your application and provide a few simple tips to give you the best chance of getting approved.

What do we check when you apply?

Checking your eligibility

To see if your business meets our eligibility criteria, we first check Companies House data to verify your company’s age and information. This does not affect your credit score.

Filling in your application

Once we’ve checked your eligibility, you’re ready to fill out our 10-minute application form. Here, we’ll ask for details about your business, such as your turnover and number of employees, as well as the name, address and date of birth of your key shareholders, so it’s worth having these to hand.

Submitting your documents

If you’re applying for a business loan, you may be asked to provide some documents to support your application — however many businesses don’t need to provide any documents to apply. This is because, where possible, we use publicly available sources or new technologies such as Open Banking to get the information we need. No documents are required to get an offer for FlexiPay.

If we do request documents, typically these will be:

1. Business bank statements (for the last six months), showing:

• Account name and registered address (must match the business named on application)
• Sort code and account number
• All daily transactions

2. Your latest, full company accounts, showing:

• Detailed profit and loss
• Balance sheet information

We may also ask for further financial accounts information depending on when your accounts were last filed. 

Assessing your application

We review all the information we’ve collected, and documents you’ve sent, if applicable. We’ll take a variety of factors into consideration when we assess your application, such as your credit score, bank transactions and trading history. 

At this stage, we’ll run a consumer credit report on your business. If you are a limited company or LLP, this will not affect your credit score. If you are different type of business, such as a sole trader, this check will be visible on your credit report going forward. We also run a personal credit search at this stage, which does not affect their credit score.

If you go to an accept an, this will appear on your business and personal credit reports, which will be visible to other lenders.

Giving you an offer

Funding Circle business loans

If you’re approved, you could receive a no-obligation offer in as little as 1 hour. One of our Account Managers will call you to discuss the offer and answer any questions you have. 

FlexiPay

If you’re approved for our line of credit, FlexiPay, you’ll receive an instant decision on your credit limit.

How to give yourself the best chance of approval

Now that you understand the process involved in your application, following these simple steps will give you the best chance of getting approved.

Check your credit file

Ask for a copy of your credit file at the relevant credit bureau. At Funding Circle, we use Experian, Creditsafe and TransUnion. Make sure your details are up to date and correct, as this will help to ensure an accurate assessment of your application.

Applicants with a good credit score tend to be the ones who secure the most favourable loan terms, so it could be worth looking to improve your score before you apply. We’ve put together some simple tips for improving your credit score here. 

Check your business accounts

We may need to review your latest financial accounts as part of your application, so take some time to check they’re accurate before you apply. If you’re a limited company, it’s also worth checking Companies House to ensure the filing of your accounts isn’t overdue.

If your financial accounts are requested, you’ll need to show a detailed Profit & Loss statement, as well as a balance sheet, to support your application.

Organise any required documents

Make sure that the documents you provide are clear and cover the required dates. If you need any help with this, one of our dedicated, UK-based Account Managers will be in contact to offer their support. They can provide ‘how-to’ guides for getting bank statements from your online banking in the correct format and are always happy to help with any queries.

14/11/22: While we want to help as much as we can, the information found here is provided solely for informational purposes and should not be considered financial or legal advice. To the extent permitted by law, Funding Circle does not accept any liability for any loss or damage which may arise directly or indirectly from the use of, or reliance on, the information contained here. If you have any questions, please speak to your professional adviser or seek independent legal advice.