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Every page of our site says it one way or another: we lend to the company, not the director. That is the single design decision from which everything else about the product follows. This article traces what it means at each stage of a loan's life, so you can see the principle working rather than just asserted.
At the application
The applicant is the company — a UK limited company or LLP, identified by its Companies House registration. You, the director, act as the company's agent: you provide photo ID so we can verify who is acting, but the questions we ask are about the entity. The credit check runs against the company's file at business credit reference agencies; your personal file is never searched, as covered in do you credit-check the director personally. Affordability is read from the company's business bank account, not your household finances. A director with a difficult personal history can still borrow on the strength of a healthy company.
At signing
The Business Loan Agreement names the company as borrower. You sign it — but you sign for the company, in your capacity as its director, the same way you sign its lease or its supplier contracts. Crucially, that is the only thing you sign. There is no second document making you personally liable: no personal guarantee, no indemnity, no charge over your assets. That second document is precisely how other lenders convert a company loan into a personal one, and its absence is the point — see no security, no personal guarantee: what that really means.
During the loan
The funds land in the company's business bank account and are for the company's business purposes — the borrowing is made on that footing, and using company borrowing for a director's personal spending is a misuse of company money under the duties you already owe the company. Repayments come from the company's account. Nothing is reported to consumer credit agencies against you, because the loan exists on the company's record only.
If things go wrong
Here the structure earns its keep. If the company cannot pay, our recourse is against the company: we pursue the entity, its cash and its assets by the ordinary routes open to a creditor. Your savings and your home are not part of that conversation, because no document ever made them so. The consequences are real — a damaged company credit file, and in the worst case insolvency of the company — but they are corporate consequences. Two honest boundaries on this: first, company law imposes its own duties on directors, and conduct such as wrongful trading can create personal liability quite independently of any loan (see can a director be personally liable); second, limited liability protects you from the company's debts, not from the loss of whatever you personally put into the company. If repayments are becoming difficult, tell us early — the support routes are set out in our hardship and forbearance process.
Why we built it this way
Because the alternative quietly defeats the purpose of incorporation. A limited company exists so that business risk sits with the business, and a personal guarantee reverses that for the one creditor holding it, usually the lender best placed to know exactly what that signature costs. Keeping the loan entirely on the company's side of the line means the risk stays where the borrowing is, and it forces us to lend properly — on the company's demonstrated affordability, since there is no director backstop to fall back on. Borrowing, repaying and answering for the debt all stay with the company. Current amounts, terms and costs are on our business loans page.
Lending to a body corporate for business purposes sits outside FCA consumer-credit regulation under Article 60B FSMA RAO 2001 and is not covered by the Financial Ombudsman Service or the FSCS.