How Long Do You Need to Be Trading to Get Business Finance?

The honest answer is that it depends on the product. Some funding is available from day one; some needs two or three years of filed accounts. Knowing where you sit saves a lot of wasted applications.

Day one to six months

Very limited, but not zero. Asset finance for a specific vehicle or piece of equipment can be arranged for start-ups where the director has a strong personal credit history and can put down a 20–30% deposit. Start-up loans through government-backed schemes are also an option, though they are personal loans in practice.

Six to twelve months

Merchant cash advance becomes available for card-taking businesses with four to six months of statements. Invoice finance is possible from early on if you are invoicing creditworthy business customers, because the lender relies on your debtors rather than your history. Asset finance options widen considerably.

Twelve months

This is the threshold DNA Finance works to for most business finance. At twelve months of trading with a first set of accounts or solid management figures, unsecured business loans, revolving credit facilities and a wide range of asset finance lenders open up.

Twenty-four months

Two years of filed accounts roughly doubles the number of lenders willing to look at you and improves pricing. Commercial mortgages for owner-occupiers become realistic, and unsecured limits rise.

Three years and beyond

You are in the mainstream. Banks, challenger banks and specialist lenders will all compete for your business, and rates reflect that.

Property finance is different

Bridging finance, buy-to-let and development finance are assessed on the property and the exit rather than trading history, so a new limited company or SPV can borrow from inception if the deal and the individuals behind it stack up.

Our advice

Do not waste hard searches applying for products you do not yet qualify for. Tell us how long you have traded and what you need and we will point you at the options that are genuinely available today.