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Bank Loan


1) Work out how much you need to borrow, why you need it, and how you will repay it. Integrate this into your business plan.

2) Research the loans that are available that best suit your needs.

3) Make a shortlist of which borrowers you plan to approach for quotes. Some banks will be better suited to your business than others.

4) Check your credit score, if it needs improving, read our ‘Improving Your Credit Score’ blog for tips on how to improve it.

5) Consider whether you are prepared to offer security against the loan, and if so, what you have available. Security can give the bank an alternative source of repayment upon default, as well as increasing their confidence in your ability to repay the loan

6) Prepare the documents the bank will want to see:

- Full accounts & tax returns

- Bank statements for the last 6 months

- Forecasts (crucially cashflow and P&L)

- Business Plan

- Proof of ownership/directorship

7) Make an application - also let banks know you will be shopping around. However, don’t apply to more than one at a time as this can negatively impact your credit score.

8) Before signing for a loan, make sure you understand the full costs, including:

- The term length

- Fees

- Monthly interest rate costs

- Penalties for late payments or defaulting


This document is intended to be an aide-mémoire to help you consider different forms of finance and which ones might be appropriate for your business; it is not a comprehensive guide to all forms of finance. There could be different tax and legal implications associated with different forms of finance. Professional tax and legal advice should be sought to prepare for these different forms of finance.

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