How we look at a business: signals beyond the credit score
If you have applied for any kind of finance before, you will have come across the idea of a credit score: a number, between zero and a maximum, that an agency calculates for your company based on its filed accounts, payment history and a handful of other signals. It is a useful starting point. It is not, by itself, how we decide whether to lend.
What the score actually tells us
A business credit score is, in essence, an opinion about how likely a company is to pay its bills on time, expressed as a single number. The agency that issues it has the company’s filed accounts, any County Court Judgments, the directors’ history, and patterns from other lenders who report performance to that agency. That is a lot of information, but it is also old information. Filed accounts are a snapshot from up to twenty-one months ago. CCJs only appear after something has already gone badly wrong. Payment performance is averaged across hundreds of trade lines that may have nothing to do with the next month of your cashflow.
So when we read a credit score, we read it as one piece of evidence among many — not the answer.
What we look at as well
Our application asks for read-only access to the company’s main business bank account, alongside the credit check and an identity check on the director. From the bank-account history, we are looking for things the score cannot see: how regular the takings are, whether the company has a pattern of paying suppliers on time at month-end, whether there are sharp seasonal swings that explain a soft month, whether the balance sits comfortably above zero between paydays. We are looking for a recognisable shape of a working business, not a perfect one.
We also look at how long the company has been trading. We have a published minimum of six months, because that is the shortest period in which a meaningful pattern can show up in the bank data. We look at the sector — not because some sectors are unwelcome, but because what “normal” cashflow looks like is very different for a florist, a freelance developer and a building contractor. And we look at the amount being asked for: a £200 ask against a company with £3,000 of weekly takings is a very different proposition from a £500 ask against a company with £600 of weekly takings.
What we do not look at
We do not look at the director’s personal credit file, because we lend to the company, not to the director, and we take no personal guarantee. We do not ask for personal payslips or partner’s income. We do not score the director’s home postcode, their car or their schooling. The lending decision is about the company.
We also do not score “engagement signals” against you in a way that disadvantages careful customers. We do gather a small set of behavioural signals to help with confirmed-good signals (you have applied before and repaid, you have used our money tools, you have engaged with a declined-review). Those are documented in our explainer on behavioural signals and they are visible to you on request under UK GDPR.
Why this matters for a borderline application
The most common situation where this approach matters is the borderline application — a company with a thin credit file, or a recent setback that depressed the score, but a strong recent six months of trading. A score-only lender would decline. We look at the cashflow shape, the recent direction of travel, the ask size and the sector, and we may well lend, often at the smaller end of what was asked.
The flip side is also true. A company with a glowing score but a thinning bank balance over the last three months is a company about which the score is, frankly, behind the times. We will treat the bank data as more recent evidence than the score and act accordingly. Either way, a human reviewer looks at every borderline outcome — described in our guide to what happens if your application is declined — because we think a significant decision should never be the last word of an algorithm alone.
What you can take from this
If your company’s credit score is weaker than you would like, do not assume the answer here will automatically be no. We would rather see the most recent few months of takings than a single number from a registry. And if your company’s credit score is strong, do not assume we will lend automatically. We will still look at whether the loan size and term actually fit the business — see our piece on borrowing only what you need for an example of when the most useful answer is to borrow less.
The full picture of what we look at, and how, sits on our how we lend page.
