Applying for business funding isn’t just about ticking boxes – it’s about showing lenders that your business is credible, stable, and a worthwhile investment. Yet many applicants miss the mark by focusing on the wrong things.
At Butterfly Advisory, we work closely with UK-regulated lenders and know exactly what they value when reviewing applications. Here’s a breakdown of what really matters – so you can position your business for approval.
1. Strong Cash Flow Management
Lenders look for signs that your business can comfortably afford repayments. Cash flow is often more important than profit – because it shows how money moves in and out of your business.
Smart tip: Be ready to show 3-6 months of healthy bank statements. Avoid dipping into your overdraft and maintain a clear buffer when possible.
2. Consistent Trading History
Longevity builds confidence. A business that’s been trading steadily for 12+ months is typically viewed as more stable than a newer operation – unless it can show fast growth backed by solid metrics.
Smart tip: If you’re under a year old, highlight growth indicators – new contracts, increasing revenue, strong projections – and back them up with data.
3. Up-to-Date Financials
Lenders want transparency. Outdated accounts or unclear financial reports can delay or even sink your application.
Smart tip: Ensure your accounts are filed on time, and keep management accounts up to date. If you’re using accounting software like Xero or QuickBooks, share direct access with your broker or advisor.
4. A Clear Purpose for the Funds
Lenders want to know how the funding will be used – and how it will help the business grow or remain stable.
Smart tip: Be specific. Will it be used for stock? Hiring? New premises? Link the funding use to a return-on-investment (ROI) plan.
5. Personal & Business Credit Profile
Your credit score still matters – especially for sole traders or directors of newer companies. A strong credit history suggests reliability.
Smart tip: Check both personal and business credit reports. Register with business credit agencies and pay suppliers on time to build your profile.
6. Professionalism & Responsiveness
Believe it or not, how quickly and professionally you respond to a lender’s requests can influence their decision. Delays, errors, or unprofessional behaviour raise red flags.
Smart tip: Submit accurate documents, answer questions promptly, and maintain a respectful tone. It shows you’re serious and reliable.
Final Thought
Understanding what lenders care about is half the battle. The other half is preparing your application to meet those expectations head-on.
🔗 Need guidance?
At Butterfly Advisory, we match businesses with trusted funding partners who understand your sector and growth potential.
📞 Speak with our team to ensure your application ticks every box – and unlocks the funding you need.