Question 1

How quickly can I get a business loan in the UK?

Accepted Answer

There is no single timetable for a UK business loan. Review time depends on the facility, the completeness of the information, underwriting questions, verification, documentation and signing. The usual sequence is an initial enquiry, information gathering, underwriting, written terms, verification and signing. Secured facilities can take longer where valuation or legal work is required. The main things that slow a file are missing bank statements, a business bank account that has only recently been opened, unfiled accounts at Companies House and directors who are hard to reach for identity verification. Sharing read-only bank data through Open Banking at the outset removes most of that delay.

Question 2

How much can I borrow for my business?

Accepted Answer

Facility size is driven by affordability rather than a headline maximum. As a working guide, unsecured facilities are commonly sized at between one and two months of average revenue, so a business turning over £60,000 a month would typically be looked at in the region of £60,000 to £120,000. Secured and asset-backed structures move well beyond that because the underwriter can lean on a charge over property or plant. GD Capital works across a range from £5,000 to £5,000,000. Three things push a limit upwards: a longer verified trading history, revenue that is stable rather than lumpy, and a clean recent conduct record on the business bank account. Recent unpaid direct debits or a run of returned payments will pull it back down regardless of turnover.

Question 3

Can I get a business loan with bad credit in the UK?

Accepted Answer

Yes, in many cases. A poor bureau score is a material factor but it is not the whole assessment. Specialist underwriting reads live bank conduct, card settlement, supplier payment behaviour and the forward order book, which often tells a more current story than a score built on historic filings. What tends to be workable: a historic CCJ that has been satisfied, a thin file on a young company, a low score caused by late filing rather than default, and a director with personal adverse who runs a solidly trading business. What tends to be blocking: an active winding-up petition, undisclosed existing facilities, or an account that is persistently over its limit with returned payments in the last three months. Where credit is impaired, pricing reflects the risk and the term is usually shorter. Every cost is stated in full on the offer before anything is signed.

Question 4

Does applying for business funding affect my credit score?

Accepted Answer

The effect depends on the type of search a provider uses. A soft search is generally visible to the person or business searched but not to other lenders, while a hard search can be visible to other lenders and may affect a credit score. GD Capital's initial form creates an enquiry. If a credit search is needed later, its type and potential impact should be explained before it takes place. Before proceeding with any provider, ask whether the proposed check is soft or hard and which company or directors will be searched.

Question 5

Do I need to give a personal guarantee?

Accepted Answer

For unsecured facilities above a modest size, a director's personal guarantee is common across the UK market. It is a promise that if the company cannot repay, you will. It is not the same as a charge over your home, though a guarantee can ultimately be enforced against personal assets. Smaller short-term facilities and some merchant cash advances can be written without one, particularly where card settlement provides a natural repayment mechanism. Before signing, check three things: whether the guarantee is capped at a fixed amount or unlimited, whether it is joint and several across multiple directors, and whether it falls away once the facility is repaid. Personal guarantee insurance is available in the UK and is worth pricing on larger commitments. Any guarantee requirement is disclosed on the offer, never introduced at the last moment.

Question 6

What is the difference between a secured and an unsecured business loan?

Accepted Answer

An unsecured facility is advanced against trading performance with no charge taken over a specific asset. It is faster to arrange, usually smaller, shorter in term and priced higher because the funder carries more risk. A director's guarantee is often requested. A secured facility is supported by a charge over property, plant or another tangible asset. It supports larger amounts and longer terms at lower cost, but takes longer to complete because valuation and legal work are involved, and the secured asset is genuinely at risk on default. A useful rule: match the structure to the life of the spend. Short working capital gaps suit unsecured. Acquisitions, property works and heavy plant suit secured.

Question 7

How does a merchant cash advance work?

Accepted Answer

A merchant cash advance is a lump sum advanced against future card takings. Rather than a fixed monthly instalment, a small agreed percentage of each day's card settlement is retained until the agreed total is repaid. Because repayment is a share of turnover rather than a set figure, service rises automatically in a strong trading week and eases in a quiet one. There is no missed payment in a bad month, which is why the product suits hospitality, retail, salons and other seasonal, card-heavy operators. Underwriting reads terminal settlement data directly, which means a business with strong card volume but an unremarkable credit score is often approved where a bank would decline. Cost is quoted as a single total repayable, not an annual rate, so it is easy to compare the cash cost against the cash benefit.

Question 8

How does a merchant cash advance compare to a traditional small business loan?

Accepted Answer

On eligibility, an MCA is generally easier to qualify for. It is assessed primarily on card settlement volume and consistency, so six months of terminal history can carry a file that a bank would reject on credit score or accounts alone. A traditional small business loan leans on filed accounts, bureau scores and often security. On process, an MCA can use payment processor records as part of underwriting, while a traditional business loan may rely more heavily on bank statements, filed accounts and credit information. Timing varies by provider, file and verification requirements. On repayment, an MCA flexes with trade while a loan is a fixed monthly instalment regardless of takings. That flexibility is the MCA's real value to a seasonal business, and the loan's fixed shape is its value to a business that wants a known budget line. On cost, a loan is quoted as an interest rate and an MCA as a total repayable. Compare cash for cash over the expected repayment period rather than comparing a factor against an APR, which is not a like-for-like measure.

Question 9

What card turnover do I need for a merchant cash advance?

Accepted Answer

Most UK providers look for consistent monthly card settlement, commonly from around £5,000 a month upwards, alongside at least six months of terminal trading history. The advance itself is generally sized against average monthly card takings, often around one month of settlement, sometimes more where the pattern is stable and the operator has a track record of prior facilities repaid cleanly. Businesses that take a mix of card and bank transfer can still be funded, but where card is a small share of the total, revenue based financing is usually the closer fit because it reads all top-line receipts rather than terminal data alone.

Question 10

What is revenue based financing and who is it for?

Accepted Answer

Revenue based financing advances capital against forward revenue and collects repayment as an agreed share of top-line receipts. Unlike an MCA it is not limited to card settlement, so bank transfers, marketplace payouts and subscription billing all count. It suits ecommerce, subscription, DTC and agency businesses where revenue can be verified through Open Banking and platform data, and where a fixed monthly instalment would sit awkwardly against uneven inbound cash. The practical benefit is that a slow month costs less to service. The practical trade-off is that a very strong month repays the facility faster, which shortens the period over which the capital is working.

Question 11

Can I use revenue based financing to buy stock ahead of a peak?

Accepted Answer

Yes, and it is one of the most common uses. Stock bought ahead of a peak converts into the revenue that repays the facility, so the repayment mechanism naturally matches the cash cycle. Size the facility against expected sell-through rather than against the full purchase order. Funding roughly the volume you are confident of clearing within the season keeps the revenue share comfortable if the peak underperforms. Timing matters more than amount. Capital that lands four to six weeks before the peak allows for supplier lead times and inbound freight. Capital that lands during the peak usually arrives too late to buy the margin.

Question 12

How is the cost of business funding quoted?

Accepted Answer

Fixed-term loans are quoted with an interest rate, any arrangement fee and the total repayable over the term. Merchant cash advance and revenue based facilities are quoted as a single total repayable, because the repayment period varies with trading. To compare offers properly, ignore the headline and look at three numbers: total amount you receive, total amount you repay, and the expected period over which you repay it. That gives a true cash cost per month of capital held. Ask specifically about arrangement fees, whether they are deducted from drawdown or added to the balance, and what happens on early settlement. On most GD Capital term facilities there is no early settlement penalty, and where any applies it is stated on the offer.

Question 13

Are there early repayment charges?

Accepted Answer

On most fixed-term facilities there is no penalty for settling early, and doing so can reduce the interest still to accrue. Where a charge does apply it is set out on the offer document, not buried in the small print. On merchant cash advance and revenue based structures, the total repayable is agreed at the outset rather than accruing daily, so repaying faster does not usually reduce the cash cost. It does free the business from the revenue share sooner, which has value in itself. Ask for the settlement figure in writing before you pay anything down early, so you can see exactly what is saved.

Question 14

What happens if my business misses a repayment?

Accepted Answer

Contact the funder before the payment date, not after. A file where the director flags a problem early is treated very differently from one that simply fails a direct debit. In practice, a first missed payment triggers a call and a request for recent bank data. Where the cause is temporary, arrangements such as a short payment holiday, a reduced instalment or a re-profiled term are frequently available. Left unaddressed, arrears are reported to credit reference agencies, default interest may apply, any personal guarantee becomes relevant and recovery action follows. On revenue-linked products a genuinely quiet trading month is not a missed payment, because the collection is a share of what actually came in.

Question 15

Are business loan repayments tax deductible in the UK?

Accepted Answer

Interest on borrowing used wholly and exclusively for the purposes of the trade is generally an allowable deduction against corporation tax. Arrangement fees are usually treated the same way, though the timing of relief can differ. The capital element of a repayment is not deductible. It is a balance sheet movement, not a cost of trading. Where a facility funds a mixture of business and personal spending, only the business proportion is allowable. HMRC guidance on business expenses sets out the principles, and your accountant should confirm the treatment for your accounting period.

Question 16

What documents do I need to apply for business funding?

Accepted Answer

A standard file needs three to six months of business bank statements, basic company details from Companies House, photo ID and proof of address for the directors, and a short description of what the capital is for. Card-linked products add merchant settlement statements. Larger or secured facilities add filed accounts, management accounts, an aged debtor and creditor listing, and details of any existing facilities or charges. Sharing read-only bank data through Open Banking replaces most of the statement gathering and is usually the single biggest factor in getting a decision the same day.

Question 17

How long must my business have been trading to qualify?

Accepted Answer

Six months of trading with a UK business bank account is the usual minimum across unsecured products, and twelve months materially improves both the amount available and the price. Newer businesses are not automatically excluded. Where there is strong card settlement, a signed contract book or a director with a demonstrable track record in the same sector, a smaller starter facility can often be structured with a view to reviewing it after a period of clean conduct. Businesses under six months old are generally better served by government-backed start up lending, asset finance against a specific purchase, or founder-supported routes.

Question 18

Can a sole trader or partnership get business funding?

Accepted Answer

Yes. Sole traders and partnerships can access most UK business funding, though the assessment leans more heavily on the individual because there is no separate legal entity behind the borrowing. Practically that means personal credit carries more weight, a personal guarantee is effectively built in, and the funder will want to see a business bank account that is genuinely separate from personal spending. Sole traders with strong card takings are frequently well served by merchant cash advance, because settlement data speaks louder than filed accounts that a small unincorporated business may not produce.

Question 19

Can I get funding if my business already has a loan?

Accepted Answer

Existing borrowing does not block a new facility. What matters is total affordability: the combined monthly service against reliable free cash flow, and whether existing lenders hold charges that would sit ahead of new funding. Disclose every facility at the outset, including any revenue-linked advances. Underwriters see them on the bank statements regardless, and an undisclosed facility is one of the fastest ways to have a file declined. Where several small facilities are being serviced at once, consolidating into a single structured facility often reduces the daily cash drag even when the headline cost looks similar.

Question 20

What can I use business funding for?

Accepted Answer

Any legitimate commercial purpose. The most common uses are stock purchases ahead of a peak, hiring, marketing pushes, equipment, refits and fit-outs, supplier deposits, tax bills and bridging a slow debtor book. Funders do ask what the capital is for, not to restrict you but because the stated use tells the underwriter whether the amount and the term make sense together. Working capital repaid over a short term reads well; a long-life asset funded on a very short term does not. Restrictions are limited to unlawful activity, speculative trading and, on most facilities, paying down a personal liability rather than a business one.

Question 21

Can I use funding to pay a VAT or corporation tax bill?

Accepted Answer

Yes. Short-term tax funding is a well-established UK product. The facility settles the bill on time and the cost is spread across the following months, which protects the company from HMRC late payment interest and penalties. The alternative is an HMRC Time to Pay arrangement, which carries interest but no arrangement fee. It can also sit on the company's record and may be raised by other creditors, so weigh it against a clean, planned facility. The practical case for funding a tax bill is protecting the working capital you need to keep trading. Draining the account to clear a quarterly VAT payment often costs more in lost stock and lost sales than the facility itself.

Question 22

Is business finance regulated in the UK?

Accepted Answer

Most lending to limited companies for business purposes is unregulated commercial lending, which sits outside the consumer credit regime. Some borrowing by sole traders and small partnerships can fall within regulated territory depending on the amount and purpose. That does not mean you are without protection. Data handling is governed by UK GDPR and overseen by the Information Commissioner's Office, and reputable funders publish a complaints procedure and follow recognised standards on transparency of cost. Before signing, check the total repayable, the term, any guarantee, any charge being taken and the complaints route. Any provider unwilling to state those plainly in writing should be avoided.

Business funding questions, answered properly.

Business loans