Every business you lend to must first pass our robust assessment process. This process has 3 key pillars:
1. Policy criteria
We receive thousands of applications from all types of small businesses. To help our team focus on the right type of application, we have criteria in place that filters out businesses who have a low likelihood of being approved. To be eligible for a loan a business must have:
- A minimum of 2 years’ trading history
- At least 1 year of filed or formally prepared accounts
- No County Court Judgements (CCJs) registered in the last 12 months, and no outstanding CCJs larger than £1000 in the last year
- UK ownership and resident directors: majority that are UK resident
2. Statistical credit models
Our proprietary credit model uses thousands of data points to assess the creditworthiness of every business that applies. It uses publicly available information, credit bureau data and our own historical data of loan applications and performance.
Successful applications are then given a risk band from A+ to E (where A+ is the lowest risk), which is then used to help determine the interest rate they’ll pay. The interest rates payable by borrowers range from 1.9% to 21.9%.
3. Expert judgement
Over 200 people work in our global credit assessment team, combining decades of experience from some of the world’s leading financial institutions. They use our credit model and financials relating to the business and company directors to manually assess each application. This allows the team to raise and clarify any potential questions before a loan is approved.
The combination of these 3 pillars enable us to create a full picture of a borrower’s financial health, so we can make accurate credit decisions and you can earn a stable return. Please note there may be some differences in the information we require from different types of borrower. For example small businesses might not file Profit and Loss information.
Property finance loans are assessed differently to small business loans. You can find out more in our Property finance loan key features and risks document.