Business Loan Frequently Asked Questions
Considering a business loan? We have compiled all the frequently asked questions on applying for a start up loan and business loan.
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General Business Finance Questions
Start Up Loans Questions
Business Loans Questions
Credit Check Questions
Managing Finance Questions
Appeals and Complaints Questions
General Business Finance Questions
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No. A grant is a non-repayable fund provided by an individual, or an organisation for a particular purpose, whereas a business loan must be repaid in full over an agreed term.
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No, the scheme is only available to businesses and other non-personal entities for commercial purposes. Please contact a member of our lending team for specific advice on eligibility.
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Generally speaking yes, if you have not already approached them, we would recommend you do so first as our primary market is supporting businesses that cannot raise any or sufficient funds from mainstream funding providers.
Sometimes and you will need to ask the bank for a letter confirming their decline, but please check with us first. We will accept a letter or email from you confirming that you have applied to the bank and that they have declined your application.
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Yes, we work alongside other organisations such as banks to help provide the total funding a business requires.
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Poor credit isn’t necessarily a barrier to getting a Business Loan or Start Up Loan, however we do carry out a full credit check on applicants. Let’s Do Business Finance is committed to lending responsibly and has to be comfortable that applicants will be able to repay the loan. It’s important to us that we don’t compound any existing credit issues that applicants may have by increasing their financial indebtedness.
You cannot receive a Business Loan or Start Up Loan if:
You are filing for or currently bankrupt or on a Debt Relief Order (DRO)
You have an outstanding Individual Voluntary Agreement (IVA) or Company Voluntary Agreement (CVA)
You are on Debt Management Programs or Debt Arrangement Schemes (DAS)
You have an outstanding county court judgement
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Unfortunately, we cannot consider your application until you have repaid these debts in full. We are committed to lending responsibly and will not lend where doing so will further indebt the applicant.
Start Up Loans
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A Start Up Loan is delivered in partnership with The Start Up Loan Company and is a government-backed personal loan. You could borrow from £500 - £25k to kickstart your new business.
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Every individual can only apply for a Start Up Loan for one business, so if you own multiple business ventures you will only be able to access finance for one of them. However, if after successfully securing a Start Up Loan you later require additional funding in order to grow and develop that same business, you may be eligible to apply for a Second Loan. You would need to go through a new application process and must have made at least six months of full loan repayments prior to applying. In addition, your total outstanding loan balance cannot exceed £25,000 at any one time.
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Finance is provided by way of a personal loan that is regulated under the Consumer Credit Act 1974. This means the loan is taken out in your name and not the name of your venture. The loan is repayable on a monthly basis for the duration of the term of the loan. The finance provided to you is not a grant.
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We believe that it’s important for business owners to be personally invested in the success of their business, which is why Start Up Loans are structured as personal loans rather than business loans. By making individuals accountable for their loan repayments we seek to empower applicants to make the right decisions for themselves and their business, like how much to borrow and how the money should be used to achieve business goals.
To support applicants in making these decisions, we require all individuals to submit a business plan, cash flow forecast and personal survival budget as part of their application. These documents serve two purposes. Firstly, they help us better understand an individual’s personal and business needs to determine how we can best support them. Secondly, they help us make a lending decision by allowing us to assess an individual’s ability to repay the loan and the viability of their business plans.
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Our Start Up loans are designed to start a new business or grow an existing business that has been trading for less than 36 months. Whilst we can support most business types, there are a few that we are unable to support. Find more information here or consult with us to find out if your business is eligible as guidelines are subject to change.
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We are on hand to support you through the application process. We can give you advice on completing the application forms and what information you’ll need to include. We can also advise you on how to create your business plan, cash flow forecast, and personal survival budget, whether you need help creating these from scratch or just want someone to review and check them. We also provide free templates that you can use.
Because we will also be assessing your loan application to determine whether or not you qualify for a Start Up Loan, our support will focus on putting you in the best possible position to succeed. It is important to remember that ultimately you are responsible for your application and even though we will do our best to support you, this does not guarantee you will qualify for the loan.
Once you have drawn down your Start Up Loan, you will be offered 1:1 mentoring. You are entitled to 15-hours of free mentoring across the first 12-months of your loan term, but it is up to you and your mentor how frequently you catch up. In addition to mentoring support, you will also be entitled to access a range of exclusive offers from Start Up Loan Company Corporate Partners, including discounted offers, reduced rates and free giveaways on a range of leading business products and services.
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The mentor that is offered as part of your Start Up Loan application is an experienced individual who can provide you with support and guidance as you go about building your business. As exciting as it is, starting a business can also be both lonely and overwhelming, particularly in the early stages, so it can be very beneficial to have someone with experience, expertise and a different perspective to talk with. A mentor will not tell you how to run your business; instead, they will assist you in learning how to make plans and strategies that will enable you to make the right decisions.
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There are no fees involved in either applying for or receiving a Start Up Loan, and no fees for the support we provide during and after the application process. Other than your monthly loan repayments, you will never be asked for any fees or other payments.
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Yes, if you happen to go into default you can seek support from us or your mentor but please note that you will also need to speak with your Finance Partner who manages your loan. Remember, it is not our, or the mentor’s responsibility to ensure that you keep up with your Start Up Loan repayments. Irrespective of your mentoring relationship, you are still responsible for paying back a Start Up Loan according to the agreed repayment plan that will be discussed during the application process.
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No, your mentor is there to provide general guidance and cannot provide specific advice such as debt counselling. Please talk to your Finance Partner if you are concerned about missing an upcoming loan repayment, or have already missed a loan repayment.
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Yes, a Start Up Loan is a personal loan that is used for business purposes, and therefore you are personally liable for repaying the full loan amount and interest as per the loan agreement you signed, regardless of the status of your business or your position within it. The only time you can repay your loan without incurring any interest is during the 14-day cooling-off period, directly after signing your Loan Agreement. During this period, if you decide you no longer want your loan you can return the funds and you won’t be liable for any of the interest you have accrued.
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Yes, multiple business partners for the same business can each individually apply for a Start Up Loan. We can lend a maximum of £100,000 to any one business, which means that up to four business partners can borrow a maximum of £25,000 each. Please note that all business partners must apply through the same delivery partner.
Business Loans
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Our business loans are over an agreed term with monthly repayments of capital, and interest. The loan is available to businesses that typically have been trading for 2yrs+ and need funding to grow. Find out more here.
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An up-front arrangement fee will be payable for business and Recovery Loan Scheme loans. Please speak to one of our finance team for more information. Fees can be added to the loan if requested when you apply for the loan.
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Our business loans are designed to help grow an existing business that has been trading for 2+ years. Whilst we can support most business types, there are a few that we are unable to support. Find more information here or consult with us to find out if your business is eligible as guidelines are subject to change.
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You can apply for a business loan for each business you own. If after successfully securing a business loan you later require additional funding in order to grow and develop that same business, you may be eligible to apply for a second or subsequent loans. You would need to go through a new application process and must have made at least six months of full loan repayments prior to applying. In addition, your total outstanding loan balance cannot exceed £150,000 at any one time.
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The Recovery Loan Scheme (RLS) launched on 6 April 2021 and supports access to finance for UK businesses as they recover and grow following the Covid-19 pandemic. The newest iteration, launched August 2022 supports small businesses to invest and grow.
The Recovery Loan Scheme can be used for business purposes, including, managing cash flow, investment, and growth, and enables you to borrow up to £150k from Let’s Do Business Finance for business growth purposes.
Credit Checks
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A credit check is a review of your past and current financial behaviour that considers any sources of credit recorded against your name (including but not limited to credit cards, utility bills, mobile phone contracts and mortgages). As a responsible lender, we will conduct credit checks to avoid increasing financial indebtedness that may overburden an individual borrower.
Start Up Loans are personal loans so the credit check that we run is a personal credit check.
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If you are applying for a Start Up Loan, then as part of the application process, we will conduct a credit check on your behalf, provided you have given your consent in accordance with our Privacy and Data Sharing Policy.
Please note, after a credit check has been conducted, our team is not able to discuss the specific details of your credit report with you. If you have concerns regarding your credit history, you will need to contact a Credit Reference Agency to request a copy of your Credit Report and address any concerns with them directly.
Below is a list of the three main Credit Reference Agencies currently operating in the UK but please note, you may be charged a small fee if you choose to do this. It’s also important to remember that Credit Reference Agencies don’t always hold the same information on file, so you may wish to consult more than one if you have any concerns about the contents of your personal Credit Report.
CallCredit
Phone: 0870 0601414
Website: www.callcredit.co.uk
Equifax PLC
Phone: 0870 010 0583
Website: www.equifax.co.uk
Experian
Phone: 0844 4818000
Website: www.experian.co.uk
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When a credit check is completed as part of your Start Up Loan application, it leaves a ‘footprint’ on your credit report showing that you applied for finance. This may impact upon your credit score; however, an individual’s credit score is made up of many different factors that offer a combined view of your financial behaviours (such as other applications for credit, any credit previously secured and your history of making credit repayments etc.). If your Start Up Loan application is successful then it will appear on your personal Credit Report, along with any re-payments that you make, for at least six years.
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Any credit checks conducted as part of your Start Up Loan application are only valid for a three-month period. If your application is still in progress after this point, we will need to conduct a new credit check. In most cases, a credit check will be conducted at an early stage so you can be confident about your eligibility to apply for a Start Up Loan before investing your time in the rest of the application process. This means that you will have up to three months to finalise your business and personal documents, like your Business Plan, Cash Flow Forecast and Personal Survival Budget, which will form the basis of the assessment. For this reason, we encourage you to think carefully about when the most appropriate time to commence your application should be.
Managing your finances
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Don’t worry, there are plenty of free and impartial debt advice organisations willing to help. The major debt charity, Money Advice Trust, offer the following services:
The National Debt Line: Debt advice experts who are committed to helping individuals improve their situation. Millions of people have already received support managing their debts.
The Business Debt Line: A unique service to help the self-employed and small businesses manage their debts.
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You should contact us immediately and let us know your situation. It is always best that you speak to one of our lending team if you believe you may not be able to make your next repayment rather than wait until the payment is missed.
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Let’s Do Business Finance follow standard market practice when loan repayments are missed and take a fair and reasonable approach. If you fail to make a payment we will attempt to contact you to determine the reasons for the payment being missed.
We will also work with you to come to a reasonable and fair agreement about how you will address this and fulfil your obligations in the future. This will be followed up with an email and/or letter stating that a repayment(s) has been missed and outlining what needs to be done to remedy the situation.
If we are unable to contact you after repeated attempts, or we are unable to agree a satisfactory repayment programme, we may then look to recover the outstanding payments through various means such as, but not limited to, applying to issue a County Court Judgment (CCJ) or referring your case to an approved Debt Collection Agent.
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It is important that you respond to any notices you receive and keep up to date with your loan repayments. There is a risk that not meeting required loan repayments may result in one or more of the below actions against you:
• Credit Reference Agencies may be notified of any outstanding amounts, which may affect your credit rating and ability to obtain goods, services or particular forms of employment.
• A third-party collection agency may intervene to help recover any outstanding amounts.
• Legal proceedings including, but not limited to, a County Court Judgment may commence.
Appeals and Complaints
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If you are not satisfied, you should initially raise this with the Business Manager handling your application. If after doing this you are still dissatisfied you should place your concerns in writing to us within 7 days, requesting your case be reviewed again.
As part of our commitment to treating customers fairly, providing the decision has not already been appealed, your case will be reviewed by a Business Manager, not involved in the original decision, who will respond in writing within 10 days.
If you are still dissatisfied you can submit a complaint in accordance with our complaints policy detailed below.
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Once a customer has expressed that they wish to make a formal complaint, they will be asked to put their complaint in writing and post or email it to the following details:
By email to: info@ldbgroup.co.uk
By post to: FAO LDBG Compliance Officer, Let’s Do Business Group The Palace Workspace, 1-3 Robertson Street, Hastings, East Sussex, TN34 1HN.
If your complaint relates to an application and you are still unhappy with our response, you have the right to raise your complaint to the Financial Ombudsperson http://www.financial-ombudsman.org.uk/consumer/complaints.htm telephone 0800 023 4567
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Any complaint made under this policy should include:
• Contact details of the complainant (including postal and e-mail address).
• The subject of the complaint.
• Information and evidence regarding the complaint.
Anonymous complaints will not normally be accepted but may be investigated where possible and will be acted upon at the company’s discretion. Complaints should also be made within three months of the complainant becoming aware of the grounds for a complaint.