LLP borrowing: what limited liability partnerships should know
A practical guide to how a UK limited liability partnership raises finance — how lending decisions are made against the LLP rather than its members, and where the exempt-business-lending line sits.
An LLP is a body corporate — and it borrows like one
A limited liability partnership is not an ordinary partnership. Once incorporated at Companies House under the Limited Liability Partnerships Act 2000, an LLP is a separate legal person in its own right. It can hold assets, enter contracts and — importantly for finance — borrow in its own name. The members are not personally liable for the LLP’s debts beyond whatever they have agreed to contribute, which is the whole point of the “limited liability” in the name.
That structure shapes how a lender looks at you. When an LLP applies to Credicorp, we assess the partnership as a corporate borrower: its trading history, its cash flow and its capacity to service the facility. We do not underwrite the personal finances of individual members, and standard facilities do not rest on a member’s home or personal assets.
Why LLPs borrow
Professional and trading LLPs — law and accountancy practices, surveyors, consultancies, property and investment partnerships — use borrowing for the same reasons any incorporated business does:
- Bridging the gap between billing a client and being paid, so partner drawings and payroll stay steady.
- Funding a lateral hire, a new office or a technology upgrade ahead of the revenue it will generate.
- Smoothing seasonal or project-based income, where fees arrive in lumps rather than monthly.
- Financing working capital for a specific mandate or contract without diluting members’ capital accounts.
How Credicorp assesses an LLP application
Because the LLP is the borrower, the underwriting evidence is the partnership’s, not the members’:
- Legal status — the LLP must be registered at Companies House and actively trading. We verify the incorporation, the registered members and that filings are up to date.
- Trading performance — we review recent accounts and management figures to understand fee income, margin and how predictable the cash flow is.
- Debt-service capacity — we test whether the LLP’s cash generation comfortably covers the proposed repayments, allowing for members’ drawings and tax reserves.
- Members’ agreement — we may check that the LLP agreement permits borrowing and that the members authorising the facility have the standing to do so.
Final terms — facility size, term and repayment schedule — are set after verification and shown to you in full before you commit.
Where the exempt-lending line sits
Credicorp lends only to UK bodies corporate — limited companies and LLPs — for business purposes. This is commercial lending that falls outside the FCA’s consumer-credit regime. Two exemptions in the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 matter most to LLPs:
- Article 60C large-agreements exemption — credit agreements above £25,000 entered into wholly or predominantly for the borrower’s business are exempt from the consumer-credit rules. Business borrowing by an LLP above that threshold sits here.
- High-net-worth and business-purpose provisions — further exemptions apply to borrowing taken on for the purposes of a business rather than as a consumer.
Being an exempt business lender lets us move quickly and tailor terms to a partnership’s real cash flow. The trade-off is honest and worth stating plainly: an LLP borrowing on this basis does not receive the statutory protections a consumer gets under the Consumer Credit Act, such as the FCA’s consumer-credit complaint route. You are dealing with us as a business, on commercial terms.
Personal guarantees and members’ liability
Limited liability is real, but it is not unconditional. For a standard Credicorp facility we lend against the LLP’s own financials and do not require members to pledge personal assets. Where the partnership’s figures alone do not support the facility size or repayment profile, we may ask a member for a guarantee — and if we do, we tell you before anything is signed, so the decision is yours to make with full sight of the terms. We never bury a guarantee in the small print.
Getting ready to apply
An LLP application moves fastest when the partnership’s picture is clear. Before you start it helps to have your Companies House number to hand, recent filed accounts and up-to-date management figures, a short note of what the funds are for, and confirmation that the members authorising the borrowing are entitled to under the LLP agreement. With that in place, assessment to personalised terms typically takes one to two working days.