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You have just incorporated, the company number has arrived from Companies House, and you need working capital. Can a brand-new limited company borrow? The short answer: in principle yes — a newly incorporated company is a body corporate and is the kind of entity we lend to — but in practice the decision turns on evidence, and a company with no trading history has very little of it. Here is how we look at a young company, what actually counts, and what to do if it is too early.
Incorporation is not the barrier — evidence is
There is no rule that says a company must be a certain age before it can apply. We lend to UK limited companies and LLPs, and a company incorporated last month qualifies as an entity just as much as one incorporated ten years ago. The difficulty is different: we assess affordability on the company's own trading — its turnover, its business bank-account behaviour over roughly the last six months, and its business credit file. A company that has not yet traded has an empty bank account history, no revenue pattern, and a credit file that is thin by definition. We cannot see whether the repayments are affordable, because there is nothing yet to see.
What a young company can show
A company does not need years of accounts to demonstrate affordability — it needs enough real activity for the numbers to speak. In practice that means:
- A business bank account that has been trading. Money coming in from customers, normal outgoings, and an account that is not permanently at its floor. Several months of genuine activity carries far more weight than any projection.
- Consistent revenue, even if modest. A steady £8,000 a month for five months tells us more than a single £40,000 receipt.
- A clean start on the company credit file. No missed payments to suppliers or other lenders in the company's short life.
What does not substitute for this: a business plan, revenue forecasts, or the director's personal income. We do not lend against projections, and we do not assess the director personally — the loan is the company's, so the evidence must be the company's. See what we look at when we decide for the full picture.
If your company has traded elsewhere first
Some directors incorporate after a period as a sole trader. Be aware that the company is a new legal person: your sole-trader bank history belongs to you, not to it, and cannot simply be transferred into the assessment. If you are weighing that move, read switching from sole trader to limited company before applying for finance first — incorporating solely to borrow rarely works, because the new company starts with a blank record.
What to do if it is too early
If your company has only weeks of activity, the honest advice is to trade first and apply later. Open the business bank account immediately, run every transaction through it, keep the Companies House record accurate, and pay suppliers on time so the company credit file starts clean. A few months of that groundwork typically puts a young company in a position where an application can be assessed properly. When you are ready, the current amounts, terms and costs are on our business loans page.
Because we lend to a company for business purposes, the borrowing sits outside FCA consumer-credit regulation under Article 60B FSMA RAO 2001 and is not covered by the Financial Ombudsman Service or the FSCS. Only take on a short-term loan when the trading genuinely supports the cost.