What Lenders Look for in a New Business Application
When a business has no filed accounts and limited trading history, lenders shift their assessment to the next best available signals. Understanding what they look for lets you structure the strongest possible application.
| Assessment Factor | What Lenders Want to See | Why It Matters |
|---|---|---|
| Director Credit History | Clean personal credit - no CCJs, defaults, IVAs; good personal credit score | No business track record means personal conduct is the proxy for repayment likelihood |
| Deposit | 20-30%+ of the asset value in cash or part-exchange | Reduces lender exposure; demonstrates commitment; cushion against early default |
| Asset Quality | New or recent plant from reputable brands (JCB, Komatsu, Volvo, Manitou); preferably from a dealer with warranty | The asset is the primary security - lenders need confidence they can repossess and sell it |
| Sector Experience | Director has verifiable experience in construction, plant operation or the relevant trade | Reduces operational risk - lender is more confident the plant will generate income |
| Work on the Books | Signed contracts, letters of intent, customer commitments | Demonstrates that income will be generated from day one |
| Bank Account Conduct | 3-6 months of clean business bank statements (even for new businesses) | Pattern of regular income and no returned payments is reassuring even for short histories |
Start-Up Friendly Lenders - Who to Approach
| Lender | Start-Up Appetite | Min Deposit | Rate Range | Notes |
|---|---|---|---|---|
| Time Finance | Strong | 20% | 12 – 18% APR | Specialist in non-standard profiles including start-ups; fast, pragmatic underwriting |
| Haydock Finance | Good | 20% | 11 – 16% APR | Good appetite for new businesses in construction specifically; accepts used plant |
| 1pm plc | Good | 20% | 12 – 18% APR | Best for smaller amounts (up to £100k); quick decisions; suitable for sole traders |
| Reward Funding | Very High | 25-30% | 14 – 22% APR | Most flexible on start-up - genuinely asset-led; more expensive but broadest eligibility |
| Aldermore Bank | Moderate | 20% | 10 – 14% APR | Will consider new businesses with strong director credit and new plant; lower rates than pure specialists |
| Close Brothers | Selective | 20-25% | 9 – 13% APR | Will consider new businesses where director credit is strong and asset is new - not for all start-up profiles |
What "New Business" Means to a Lender
The definition varies slightly by lender, but as a general rule: under 2 years of trading, with no filed accounts at Companies House. Within that, lenders further distinguish:
Pre-revenue / pre-trading: Company incorporated but not yet trading. Most lenders will not finance at this stage without exceptional circumstances. A few asset-backed lenders (Reward Funding, 1pm) will consider it with a 30%+ deposit and signed contracts.
0-12 months trading: Some trading history but typically no accounts. The challenge is evidencing income - bank statements become critical. Most specialist start-up lenders will consider this stage.
12-24 months trading: Some management accounts available; approach to the first full accounts. A broader lender set will consider this, particularly if the business has good early revenues. This is the stage where you start to access mainstream specialist lenders at better rates.
24 months+: First filed accounts available. You are now "established" in most lenders' criteria - the full panel opens, rates improve, and your application is assessed on business performance rather than personal credit alone.
How to Maximise Your Chances as a Start-Up
Director Guarantee
A personal guarantee from the director is almost always required and is non-negotiable for start-up applications. Ensure you understand what this means - you are personally liable if the business defaults.
Deposit 20-30%
A 30% deposit will give you access to more lenders and a better rate than 20%. If you can stretch to 30%, do it. Every percentage point of deposit reduces lender risk and tends to improve your position.
New or Late-Used Asset
Buy new or the most recent used plant your budget allows. A new machine from a main dealer with a warranty is the best possible asset to finance as a start-up. It makes the lender's security analysis straightforward.
Good Personal Credit
Check your personal credit report before applying. Resolve any outstanding issues - even paying a small CCJ before applying can materially change your options. A clean personal credit report is your single most important asset as a start-up borrower.
Evidence Work
Signed contracts, letters of intent from customers, a first invoice or PO - anything that shows the plant will be earning from day one. Send this to us alongside your application.
Sector Credibility
A brief CV or statement showing relevant industry experience - years in construction, trade qualifications, CPCS cards - helps lenders feel confident you know how to run a plant business. It is a soft factor but a real one.
Sole Trader Plant Finance - Simpler Than You Think
Sole traders can absolutely access start-up plant finance - and in some ways the application is simpler than for a limited company. There is no corporate credit to assess; the application is almost entirely based on your personal credit, your income history, and the quality of the asset.
What you will need as a sole trader with no filed accounts: your SA302 (or UTR and HMRC correspondence confirming registration); 3-6 months of personal and business bank statements; photo ID and proof of address; and details of the asset. If you have been a sole trader for under 12 months, some lenders will accept a letter from your accountant or a statement of income alongside your bank statements.
Lenders particularly open to sole trader plant applications include Close Brothers (strong appetite for sole traders), Haydock Finance, 1pm and Aldermore. For a new sole trader with no accounts, 1pm and Time Finance are typically the most accessible routes.