Many people think the process for applying for a business loan is the same as that of a personal loan. Whilst some of the same principles may apply, business loan applications tend to be more in-depth, not surprising given that they’re generally for larger amounts and therefore come with a much higher risk for lenders.

Lenders typically consider factors such as the length of time the business has been operating, profitability, cash flow, business credit rating and current assets. Therefore, it’s important to present your best case when applying.

How can I ensure success for my business loan application?

1) Create a compelling business plan.

A good business plan demonstrates to the lender that you understand your business model, the market in which your company operates and what it’s capable of achieving in the future, with the right funds.

Lenders will be interested in upcoming trends that might positively and negatively impact your profitability. Consider including information on your competitors and how you differentiate your business offering.

They’ll also want to know who runs the business, including the owners or directors and other key staff that are likely to impact growth. Having a good team behind you will demonstrate how well your business can react to unforeseen circumstances or business demands.

You’ll need to include your business’ historical and projected financial information and demonstrate what the loan will be used for, and how it will be repaid. Lenders will need to know you have clear goals in place for the growth of the business, and in what timescales.

Be sure to include information about your current assets and liabilities, an executive summary and table of contents, plus appendices where relevant such as charts or graphs, marketing material or product information.

2) Get your paperwork in order.

Not every lender has the same criteria, however, typically they’ll expect you to provide the following paperwork:

• Business tax returns
• Business profit and loss statements and balance sheets
• Minimum two years’ worth of business bank statements
• Personal tax returns for the business owners
• Personal assets and liabilities
• Proof of address and ID

Lenders may also ask business owners to take out insurance to ensure the loan is repaid in the event of injury, illness, or death.

3) Know your lenders.

Most lenders provide details about their products and eligibility criteria on their websites. Before making an application it’s good practice to do your research. Certain lenders may be better suited to your business type or industry or have more favourable criteria.

If you don’t have time to do the research yourself, using a broker can be an easier way to apply. In fact, out of the hundreds of commercial lenders in the UK, around 50% of these only accept applications from a broker. Brokers will know the application process inside out and also provide you with invaluable knowledge about lenders’ requirements.

4) Understand the detail.

Loan applications are often rejected because business owners do not have a clear vision for their company or fail to understand the numbers.

As a business owner, you’ll be expected to know your finances if questioned. You also need to understand the market you operate in, in-depth, such as who the key players are, upcoming legislation changes and other factors that might impact what you do – now and in the future. It’s useful to have prepared market research or conducted an environmental analysis so that you’re able to answer any queries with authority.

5) Check your business credit score.

For UK businesses, the way to check your credit score is through a Credit Reporting Agency such as Equifax or Experian. Businesses are given a credit score ranging from 0 to 100. 0 represents a high risk, while a score of 100 indicates a very low financial risk.

It’s good practice to check your business credit score regularly. Factors such as paying suppliers and filing business accounts on time can have an impact.

6) Be honest.

When it comes to loan applications, it can be tempting to embellish figures or other information to make your business look more appealing to lenders. However, if you’re found out then it could decrease your chances of being successful and affect your business credit score. If there’s something in your paperwork that might cause a red flag, have an explanation prepared and know what your business can do to mitigate the issue.

7) Ensure your personal finances are in order.

Whilst a business loan relates entirely to your business, it’s not surprising lenders might also want to know who they’re lending to, on a personal level. The state of your own finances gives some indication to lenders as to how good you are with money. This is particularly important if you’re running a recent start-up and don’t have much by way of historical financial records for your company yet.

Experian rates an excellent personal credit score as 881 to 960 (out of a possible 999), and a fair or average score between 721 and 880. Anything lower than this and your personal finances could come under scrutiny by business lenders. Paying your bills on time, paying off existing debt and registering to vote can all help improve your score. Remember – other individuals you’re linked to could affect your rating.

Whilst there are no guarantees your business loan will be approved; these best practices will help increase your chances of success. It all might seem like a lot of work; however, it will stand your business in good stead for the long term.

Disclaimer: The views expressed in this blog article are those of Origin Finance and do not constitute financial advice.

Whether it’s a popular chain eatery serving much-loved classics or an independent restaurant that offers a unique dining experience, the UK has a rich history of culinary venues that offer every meal you can think of, from cultural specialities to easy grub for families.

It’s an age-old industry that’s growing well, with research from Statista showing that the UK restaurant market is forecast to rise to 19.5 billion pounds by 2026.

But restauranteurs face unique financial pressures. Inflation can quickly hit supply costs, the state of the economy weighs down on customers’ disposable income, and the fiercely competitive nature of the industry can make it very challenging to keep things profitable. Even poor weather can be devastating if it comes during an all-important peak season.

For those looking to start a new business, the initial setup costs can also seem quite daunting, with expenses like designing and building as well as equipping your restaurant to think of a few.

Luckily, there are funding options available. In this article, we explain how restaurant owners can secure a loan or other finance solutions to open a new eatery or invest in their existing culinary business.

When looking for extra cash, restauranteurs often start by looking at securing a Business Loan.

Loans are a flexible option for securing funds because they can be used however you want. The money is paid straight into your bank account and can be spent on everything from stocking up on supplies, ingredients and beverages to paying for a brand new website with an easy-to-use reservation system.

Repayments are typically made every month with a manageable fixed instalments but if your restaurant gets busier during the holidays, it’s possible to arrange for seasonal repayments during these busy periods.

Restaurants need all sorts of specialist equipment, not just an oven! Even for smaller restaurants, the costs of everything you need for cooking meals, storing supplies and hosting your guests can soon add up.

Equipment Finance (also known as Asset Finance) is a tailored form of finance that can cover all of your culinary and dining purchases, including:

• Ovens
• Deep fryers
• Microwaves
• Refrigeration units
• Freezers
• Prep tables
• Dishwashers
• Sinks
• Plates, bowls and cutlery
• Glassware
• Serving trays
• POS (point-of-sale) systems
• Seating and tables
• Safety equipment
• Uniforms
• Security alarms
• Computers
• Inventory management software

Equipment Finance for restaurants usually covers the purchase, delivery and installation of virtually any item you can think of for your eatery, large or small. Repayments are made as manageable monthly instalments spread out over an agreed term, which is often several years.

A restaurant’s look and feel is almost as important as the food itself, helping to create a relaxing and sociable atmosphere where people can unwind to enjoy their meals.

Fit Out Finance for restaurants provides funding to create the perfect decor and atmosphere for dining, including the purchase and installation of:

• Cooking stations
• Bar counters
• Prep areas
• Storage areas
• HVAC systems
• Signage
• Lighting
• Flooring
• Wall coverings
• Artwork
• Other decorative features

In other words, you can fund any tangible or intangible asset needed to make your restaurant look and feel exactly how you want it. Like Equipment Finance, Fit Out Finance is repaid in fixed monthly instalments.

Restaurants are often filled with expensive equipment, from top-of-the-range commercial ovens to specialised catering refrigeration units.

Machinery and equipment are valuable business assets and, through Refinance, they can be leveraged to release around 80% of the asset’s value back into your business. This produces a cash boost without the need to apply for a more traditional Business Loan, which can sometimes be harder to secure.

The debt is secured against the restaurant equipment that’s being refinanced, which is paid back through monthly instalments. These instalments come in the form of regular fixed cost that won’t be affected by changing interest rates or inflation. You can even consolidate existing finance arrangements through refinance, potentially allowing you to secure more favourable repayment terms.

Many entrepreneurs and culinary enthusiasts harbour the ambition of opening their very own restaurant, whether that’s an independent restaurant catering to diners looking for a unique gourmet experience or an existing franchise with an established reputation and business support.

Aside from applying for a Business Loan, there are two options that are tailored to support those looking to start their own restaurant: New Start Finance and Franchise Finance.

New Start Finance provides everything you’ll need to get your restaurant started, including catering and dining equipment and fit out expenses. It can also provide an initial sum of working capital to help fund things like your initial food and drink inventory, licensing payments, as well as hiring chefs, servers and other eatery support staff.

Franchise Finance is like New Start Finance, except that it’s a tailored package to cover various franchise-specific costs like franchise fees along with the usual equipment purchases, fit out expenses and operational fees.

You can find out more by reading our guide to Franchise Finance.

At Origin Finance, we’re passionate about helping businesses succeed.

We have years of experience supporting the hospitality industry and helping entrepreneurs secure the funding they need. As a broker, we have access to lenders that only consider introduced applications, and some who specialise in lending to restaurant owners.

We’ll also help put your finance application together, maximising your approval chances. We do not charge a fee for our services as we are directly renumerated by the lender.

Get in touch for a free, no-obligation quote to find out how we can help secure finance for your restaurant.

If you liked this article, you might also enjoy reading:

• Everything your business needs to know about equipment refinance
• How to buy a business

Commercial Vehicle Refinance is a way of unlocking money from vehicles such as company cars, vans or any other type of vehicle for business use.

A huge number of companies rely on their vehicles for commuting, transporting goods and carrying out essential business tasks. In the UK, there are 720 thousand company cars on the roads but we also know from RAC figures that there are 4.74 million LGVs, 530,000 HGVs and 140,000 buses & coaches. And those stats don’t include industry-specific vehicles, which are designed to complete specific tasks in areas like construction, and manufacturing and engineering.

Commercial vehicles are often very expensive and, therefore, valuable business assets. In this article, we explain how Commercial Vehicle Refinance works and how it can help asset-rich companies raise working capital.

After an assessment of your vehicle’s worth, the lender will generally release around 75% – 80% of this value, giving your business an immediate cash injection. At the same time, you can keep using the vehicles as you would normally. As part of the refinance agreement, you’ll pay a monthly fee with a fixed interest rate over an agreed term.

You can also refinance vehicles that you don’t fully own. If you’re paying off debt on multiple vehicles, refinance is a way of consolidating these arrangements into one, simplifying payments but also potentially lowering interest rates, which could save your business a significant amount of money and increase your day-to-day cashflow.

Commercial Vehicle Refinance is a type of Equipment Refinance, which means many assets (or in this case, many vehicles) can be used. Examples of vehicles that can be refinanced include:

• Cars
• Taxis
• Buses
• Lorries
• Motorcycles
• Heavy goods vehicles (HGV)
• Coaches
• Bulldozers
• Diggers
• Cranes
• Tractors
• Forklift trucks
• Cement mixers
• Combine harvesters
• Crop sprayers
• Ambulances

This is just a sample of what you can refinance. In practice, you can choose almost any vehicle in your possession.

Commercial Vehicle Refinance offers a range of benefits, including:

• You can access the value of your vehicle as an immediate cash boost.
• Monthly repayments are fixed.
• You can potentially reduce interest rate payments and secure better repayment terms on your existing debts.
• It’s easier to access than traditional business loans as there are less stringent credit requirements.
• By using the vehicle as the security for the finance, there’s no need for any additional collateral.
• You can keep using your equipment, and after the agreement is paid, you’ll regain complete ownership.
• You’ve got complete control over what you refinance, whether that’s a single vehicle or a whole fleet.

One of the advantages of Commercial Vehicle Refinance is that the money is transferred into your bank account to be used as you see fit. This means it can help you buy more vehicles, hire new staff, fit out your office, upgrade your equipment, or boost your working capital to cover day-to-day expenses. It’s really up to you.

Yes, older vehicles can also be refinanced. There may be age limits on some vehicles, but at Origin we will be able to let you know if they’re eligible for refinance.

The business and the asset must be based in the UK to be eligible for Commercial Vehicle Refinance. There’s also a £10,000 minimum value of what we can refinance.

As specialists in Commercial Vehicle Refinance, we can help you find the right solution for your business.

We can provide a free, no obligation valuation of your vehicles so you know exactly how much you can raise. We can also help you put your application together to maximise your chances of success.

Get in touch to find out more.

If you like this article, you might also enjoy reading:

• Everything your business needs to know about equipment refinance
• How to finance commercial vehicles for your business