2 min read
Debt service cover ratio = cash available for debt ÷ annual repayments — a core lender affordability test.
Cash flow: can you repay?
The first and biggest question is affordability — whether your cash comfortably covers the repayment, measured by the cover ratio. Clean bank data and a healthy ratio answer it directly. Everything else is secondary to this.
Credit: do you repay?
Your credit record shows whether you have paid past obligations reliably. A clean file reassures; CCJs or defaults raise questions the rest of the case must answer. See affordability vs credit score.
Purpose: what is it for?
Lenders favour borrowing with a clear, productive purpose — funding an order, buying stock, bridging a known gap. A defined use with a repayment source is far more convincing than a vague request. See when not to borrow.
Existing debt and records
Your current commitments shape how much room remains, and the quality of your records — filed accounts, tidy banking — signals how well the business is run. Both feed the decision. See how lenders assess affordability.
Present all five well
Use the calculator to confirm your affordability case before you apply.
Credicorp lends to your company, not to you personally, and takes no personal guarantee. See indicative terms on business loans, or apply online in minutes.
Frequently asked questions
What do lenders look for in a loan application?
Chiefly five things: whether your cash flow can repay the loan, your credit record, the purpose of the money, your existing commitments, and how well your affairs are documented. Affordability is the biggest.
What matters most to a lender?
Affordability — whether your cash comfortably covers the repayment. A strong cover ratio backed by clean bank data is the single most important element; the credit record, purpose and records support it.
How do I present a strong application?
Show a healthy cover ratio with tidy banking, a clean credit report, a clear productive purpose with a repayment source, and well-organised accounts. Prepare each element before you apply rather than reacting to questions.
Related reading
How lenders assess business loan affordability, step by step
Affordability is not one check but a sequence. An underwriter starts with the cash your business actually…
Read →
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 →
Understanding your business credit score
Your company has a credit profile that is separate from your own. Knowing what shapes it — and how lenders…
Read →
How to prepare for a business loan application
A well-prepared application is a faster, better-priced one. Most delays and declines come from missing…
Read →Affordability vs credit score in lending decisions
A credit score and affordability are not the same thing, and for business lending the cash-flow question…
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.