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Your business credit score is a key factor lenders assess to gauge your financial reliability and the likelihood of you repaying the loan. A strong credit score generally leads to more favourable interest rates and terms, while a lower score might limit your options to specialist lenders or result in higher borrowing costs.

Neither one is better than the other,  as it entirely depends on the unique needs of each business. While secured loans often come with lower interest rates due to the collateral reducing the lender’s risk, they also mean you risk losing the asset if you cannot repay the loan. Unsecured loans offer flexibility as they don’t require an asset as security, but they typically have higher interest rates and may require a personal guarantee from directors.

Yes, new businesses can secure financing although options may be more limited than in comparison for established businesses. Startup loans, often government-backed, are specifically designed for new ventures and may consider your personal credit history and business plan. Some lenders also focus on the viability of the business idea and projected cash flow rather than a long trading history.

While requirements vary by lender and loan type, common documents include your business plan, cash flow forecasts, recent bank statements, profit and loss statements, balance sheets, and potentially personal and business tax returns. Lenders want to see a clear picture of your business’s financial health and its ability to manage repayments. Depending on the lender, loan type or size, you might find that open banking assessments are all that is required.

The time frame varies. Traditional bank loans can sometimes take longer for approval and funding. However, many online and alternative lenders can be quicker, with some providing decisions within hours and funds transferred within a few business days, particularly for smaller loans.