A limited company loan is borrowing taken in the company’s name. The company’s separate legal identity matters, but an owner or director can still accept personal obligations through a guarantee.
PDQ Funding helps trading businesses explore loans and merchant cash advances. A provider assesses the company, the purpose and affordability; incorporation alone does not establish eligibility.
Company borrowing and personal borrowing
Check the legal borrower named in the agreement. A company taking finance is different from a director taking a personal loan and putting the money into the business.
Keep company and personal records clear. If money moves between a director and the company, ask an accountant about the accounting and tax responsibilities. Do not assume the name of the bank account receiving funds determines the legal structure.
Secured and unsecured company loans
A secured facility gives the provider specified security under its documents. Understand which assets are covered and the consequences if obligations are not met.
Unsecured borrowing does not require the same specified asset security, but may still require a personal guarantee or other obligations. Read those documents independently of the loan’s marketing description.
The government’s guarantee guidance provides background. Consider independent advice before accepting personal liability.
Compare loans with other structures
Company loans
A term loan provides an agreed amount repaid over a set period, with interest and fees. Scheduled payments need to fit receipts after operating costs and existing borrowing.
Merchant cash advances
An advance may be relevant where the company has qualifying card receipts. Check the funding fee, collection rate, sales definition and any additional payment conditions. Bank transfers and invoices are not automatically qualifying card income.
Specific-purpose facilities
Equipment or eligible unpaid business invoices may justify another comparison. Review deposits, ownership, fees and responsibilities. Our funding sources guide outlines structures to investigate.
Eligibility and the director’s credit information
Providers may assess accounts, bank records, trading history, credit information, sector and current commitments. They may also check owners’ or guarantors’ personal information. Ask which searches occur and when.
A company credit score is not the whole decision. A new company without established trading needs a different assessment from one with regular receipts. No universal minimum turnover or guaranteed amount applies to every facility.
See business loans and personal credit for the distinction between checks, reporting and guarantees.
Budget the cost and implementation
Identify what the company will receive after charges, the full amount payable and each payment date. Check settlement, overpayment and default terms before accepting the offer.
For equipment, include installation and downtime. For stock, include the selling and settlement period. For expansion, budget the additional running costs before expected receipts arrive.
Test lower sales and delayed customer payments after wages, suppliers, premises, tax and existing finance. An investment’s projected profit is not the same as cash available for repayments.
Information to prepare
- Company and ownership details.
- Recent accounts and business bank statements.
- Existing borrowing and repayment schedules.
- A clear purpose supported by quotations.
- A cash forecast and implementation timetable.
- Merchant statements where card-sales funding is relevant.
Explain a recent ownership change or unusual trading period so the provider has the correct context. For the wider process, read small business loans. An enquiry does not guarantee approval, an amount or completion date.
Frequently asked questions
Can a limited company apply for a business loan?
Yes, it can make an enquiry. The provider assesses eligibility, records, purpose and affordability before deciding whether to offer funding.
Does limited liability remove guarantee risk?
No. A director or owner can accept personal obligations under a guarantee. Read the actual terms and obtain advice.
Will my personal credit be checked?
It may be, depending on the provider, borrower and guarantee arrangements. Ask which checks are needed before progressing.
Can a new company borrow without trading records?
It needs a different assessment from an established business. Prepare a business plan and budget and investigate appropriate start-up routes directly.
For the director’s credit and accounting considerations, read our guides to business loans and personal credit and business loan repayments and tax.
Discuss your business funding requirements
Complete the online enquiry form or call 01246 233108. Explain the business, purpose and amount required so the next steps reflect your circumstances.
PDQ Funding is a broker, not a lender. We do not charge for using our brokerage service and receive lender commission following a successful introduction. There is no obligation to accept an offer.