Quick summary: the typical credit profile lenders want

• Director personal credit: many mainstream funders prefer directors with good personal credit (roughly equivalent to 650+ on common UK scoring bands). Strong personal credit speeds approvals and improves pricing.
• Business credit & trading history: a positive business credit file and 12–36 months trading are commonly requested. Specialist funders may accept shorter histories for solid director profiles or high-quality security.
• Turnover & cashflow: lenders want evidence that repayments fit comfortably — typically businesses with turnover that comfortably covers repayments (often from £50k–£100k upwards, depending on asset size).
• Deposit / LTV: expect a deposit of around 10–30% for many deals; new equipment often supports higher LTVs than used.
• No recent major adverse events: recent CCJs, current insolvency or large unpaid defaults are barriers for mainstream lenders but not always for specialist funders.
• Sector and asset fit: some lenders specialise by industry or asset class and will favour assets with strong secondary market values.

Credit scores and what they really mean

There is no single “universal” credit score — lenders check multiple credit reference agencies (Experian, Equifax, Creditsafe) and apply their own scoring models. Rather than fixating on one number, think in bands:

• Excellent — lowest perceived default risk. Access to most mainstream funders, best rates and terms.
• Good — accepted by most mainstream lenders and many specialist brokers; competitive rates possible.
• Fair — many specialist lenders will consider the business; expect higher pricing or additional security.
• Poor / Adverse — specialist or higher-cost lenders may offer finance, often with larger deposits, shorter terms or asset-only security.

If your score sits in the ‘fair’ or ‘poor’ band, brokers can often find funders comfortable with that profile by restructuring deals (e.g., lower LTV, higher deposit, leasing instead of a loan).

Business trading history, turnover and profitability

Most mainstream asset finance providers prefer 12–36 months trading. Why? Lenders want to see a track record that demonstrates stable income and operational history. However, specialist equipment lenders often accept shorter trading histories if:

• Directors have strong personal credit and experience in the sector
• The asset itself provides strong security (high resale value)
• There is clear forward cashflow (e.g., confirmed contracts or purchase orders)

Turnover expectations vary by loan size and asset cost. A general guide: lenders look for turnover that makes monthly repayments comfortable relative to operating cashflow — often meaning at least £50k–£100k annual turnover for smaller asset packages, with higher thresholds for larger facilities.

Director’s personal credit and personal guarantees

Lenders commonly assess directors’ personal credit files. For smaller or unsecured facilities, a personal guarantee (PG) is often requested — this reduces lender risk and can improve terms. Key points:

• Recent bankruptcies, IVAs or discharged insolvencies will be reviewed and may restrict access to mainstream funders.
• If personal credit is weak, brokers may structure finance with a higher deposit, use asset-only security or source specialist lenders who accept poor personal credit.
• Initial enquiries do not trigger full credit checks. Lenders usually perform formal checks only when you proceed with an application.

Adverse credit: CCJs, arrears and insolvency

Lenders have differing look-back windows for adverse events. Typical behaviours:

• CCJs/defaults: many lenders prefer a clean record for 6–36 months; satisfied or older CCJs may be accepted by specialist lenders.
• Bankruptcy/IVA/Receivership: mainstream lenders are stricter; specialist asset funders may consider older events on stronger security.
• Ongoing arrears: active arrears are a red flag and often need resolving before finance is arranged.

Options if you have adverse credit: higher deposit, leasing instead of a loan, asset-secured deals, or being matched to specialist funders via a broker. If you’re unsure, complete a Free Eligibility Check to be matched with an appropriate broker.

Asset type, age and LTV — why they matter

Underwriting for equipment finance is asset-led. Lenders assess:

• New vs used: new assets usually support higher LTVs (often up to 80–90% for mainstream lenders); used equipment typically receives lower LTVs and closer scrutiny of condition and maintenance records.
• Secondary market value: common vans, tractors and popular plant retain value and are easier to finance than specialist medical or bespoke production kit.
• Asset lifespan vs loan term: lenders prefer terms that reflect expected economic life. Long terms may require balloons or larger deposits.

For examples of asset-specific options and to explore suitable lenders, see our guide to equipment finance.

Security, deposits and interest rates

Common structures include hire purchase, finance lease and chattel mortgage. Security, deposit and structure influence pricing:

• Higher deposits and stronger personal/business credit -> lower rates
• Asset-secured deals usually cost less than unsecured borrowing
• Debentures or fixed charges may be required for larger facilities

Negotiation levers: increase deposit, shorten the term, or offer additional security to reduce APRs.

Documents lenders usually request

Be prepared with:

• Company accounts (last 1–3 years) or management accounts
• Business bank statements (usually last 3–6 months)
• VAT returns and recent tax filings
• Supplier quotes or invoices for the equipment
• ID and proof of address for directors
• Cashflow forecasts or contracts (if trading under 12 months)

Having these ready speeds the quote process significantly.

Real scenarios — three typical outcomes

How to improve your equipment finance eligibility

Practical steps you can take right away:

• Check and correct personal and business credit reports — small errors are common and fixable.
• Increase the deposit or accept a lower LTV to secure better pricing.
• Get recent management accounts and 3–6 months bank statements ready.
• Consider leasing rather than buying if ownership is not essential — leasing can be easier to obtain with weaker credit.
• Use a broker: they understand lender appetites and can match your profile to the right funder quickly.

Small improvements (sorting paperwork, correcting credit errors) can produce results within weeks; longer-term credit repairs may take months.

Why use UK Business Loans to arrange equipment finance?

UK Business Loans acts as a time-saving introducer: we match you with lenders and brokers who specialise in equipment finance and your industry. Our service is free and without obligation — we only use the details you provide to find the best possible matches for your enquiry. Completing the enquiry is a soft step and will not affect your credit record.

Free Eligibility Check — Get Quote Now

Frequently asked questions

Will an enquiry affect my credit score?

No — an initial enquiry via UK Business Loans is a matching step. Lenders usually run formal credit checks only when you proceed to an application.

Can I get equipment finance with poor credit?

Possibly. Specialist lenders may consider higher-risk profiles, typically with larger deposits, asset-only security, or higher interest rates. A broker match helps find these options quickly.

Which is better: hire purchase or finance lease?

It depends on ownership goals, tax treatment and cashflow. Hire purchase often leads to ownership at term end; finance lease can keep the asset off-balance-sheet in some cases. Your broker can run the numbers for your situation.

How quickly will I receive a quote?

Many brokers or lenders respond within hours during business hours when documents are ready; complexity and document availability affect timing.

Get started — free eligibility check

Ready to see what equipment finance options are available for your business? Complete our short enquiry and we’ll match you to lenders and brokers who specialise in your asset and sector. It takes under two minutes and won’t affect your credit record.

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