Ben Larkins and Jon Maloney explain the process if you’re looking to apply for a £50,000 business loan.

Is it hard to get a business loan for £50,000?

Not necessarily, but it depends on a number of different factors. We’ve touched upon it in previous podcast episodes – there are a lot of elements in getting any amount of financial credit.

These include the credit-worthiness of the business, its turnover, serviceability, bank statements and more. As long as that all stacks up, it’s very easy. But until we’ve received all the information we can’t confirm either way.

Can individuals or only businesses apply for a £50,000 loan?

Individuals can, but not with us. We only deal with businesses: sole traders, partnerships and limited companies. So if any of those are listening and want a £50,000 loan, we can help.

What should I do before I apply for a £50,000 loan? Can I prepare anything in advance?

First, make sure it’s the amount you need. Are you just applying for £50,000 because it’s a nice round figure? Or, do you actually only need £25,000?

On the flip side, if you actually need £100,000, don’t apply for £50,000. Just be clear in your own head that £50,000 is going to do the job you want it to do, whether that’s for a one-off cost tax bill, cash flow or equipment.

In terms of preparing, gather the last six months’ bank statements and most recent company accounts. It needs to be the full set with all the pages – not just the abbreviated ones that’s filed at Companies House. We need to see the whole lot.

Can I borrow a £50,000 business loan with bad credit?

Yes, you can, but it depends what makes you think you have bad credit. It will be difficult to get a loan for a company that’s not paying loans they’ve already got, are missing mortgage payments, going into liquidation or whose payments are bouncing. Bank statements probably don’t apply here, because the problem is too far gone.

But if it’s historic bad credit, a couple of missed payments here and there, or a couple of historic bounced payments on bank statements, you can absolutely still apply. If it’s a loss making business, you can still apply.

We’ve had people in the past who think they have bad credit because they’ve missed one credit card payment in the past couple of years. There is no set rule for what bad credit is. It’s very subjective.

Even if you think you’ve got bad credit, put an application in to us. Send us the info and we will soon be able to determine whether we can do anything for you. Rather than you guessing, we’ll tell you for certain.

How long does the application process take and how do I apply for a £50,000 loan?

The application process can take five minutes or two days – it all depends on the strength and credit worthiness of the business. A big factor is how long you’re looking to borrow the money for.

If you’re looking for a short term loan, a number of our funders make an automated decision. We input information about the business, directors and shareholders and within a few minutes we have an auto decision. That applies on loans over 12 months to two years.

If you’ve got a specific requirement and you’re looking for something over three, four or five years, it might take a couple more days to get in front of a manual underwriter. They will look at the bank statements and accounts to decide whether they’re ready to offer a loan.

How long are the repayment terms on a £50,000 loan?

Between twelve months and five years. That’s generally what we do. Occasionally some of our funders will do up to six years, but that’s really on lending over £100,000.

Can I pay off a £50,000 loan early?

Yes, you can. Different funders have different criteria for early settlement. Some will allow you to pay early, but you will still pay all the interest that was due anyway, so there’s no real benefit.

Other funders will only charge interest up to the point of settlement – you only pay interest for the time you’ve had the money. So it’s very much funder dependent as to whether there are any discounts for early settlement.

What happens if I miss a payment?

You will get a phone call from the funder’s collections team. It will initially be an assessment call to make contact.

The worst thing anybody can do if they miss a payment is disappear. If we or the funder can’t get hold of them, and they don’t reply to emails, that’s when alarm bells start ringing. In the money lending business you do have to jump on an issue pretty quickly.

They won’t immediately issue court proceedings, but if you bury your head in the sand the problem doesn’t go away.

If you do miss a payment, it’s not terminal. It’s not the end of your business. It’s not the end of your relationship with a funder, and it doesn’t mean we can’t lend you any more money. If you miss a payment and the funder calls, just answer the phone and explain the situation.

It might be a mistake, or perhaps somebody’s paid you late. We’re all business people. We understand how businesses work and that unexpected things happen that cause problems. It’s how you react to the problem that matters.

How can financial advisers like Century help someone looking to apply for a £50,000 loan?

We’re not financial advisers, but our skill is to package a proposal up and present it to a funder so that you’re likely to succeed. We’d never advise somebody – we can only present them with options. The advice is down to your financial advisor, your accountant and your own thought processes.

A financial advisor or accountant are in the best position to give you a cash flow forecast to back up your thinking. They will look at whether the business can afford the loan, the impact to your company and the potential benefit. It’s very important to seek advice before coming to see us.

If you’re looking for a £50,000 loan, just complete our application form. It will take you two to three minutes, and one of our account managers will call to help you very shortly.