2 min read
Definition
Affordability, in lending, is the question of whether a business generates enough cash to service a loan with room to spare. It is measured through cover ratios like the DSCR, and it is usually the decisive factor in whether a loan is approved.
Why it matters
Affordability, not profit or ambition, determines what a business can safely borrow. It is distinct from eligibility and from the credit score. See the affordability guide.
Related reading
Business loan affordability: what lenders check and how to pass
Affordability is the single biggest thing standing between your company and a yes. A lender is not asking…
Read →
Debt service coverage ratio
The debt service coverage ratio (DSCR) measures whether a business generates enough cash to cover its debt…
Read →Affordability vs eligibility: two different lending tests
Eligibility and affordability are two separate gates, and you have to clear both. Eligibility is about…
Read →
How to check if your business can afford a loan
Before you apply for a loan, spend twenty minutes checking whether your business can comfortably afford it…
Read →Funding for UK limited companies
Credicorp lends to your company, not to you personally — short-term working capital with no personal guarantee. See what your business could access.