Business loan declined because of low turnover. What now?
By Oliver Mackman · Reviewed 2026-05-09
Most UK mainstream lenders publish a turnover floor: typically £100k for a £25k loan, £200k for £50k, scaling up. Below the floor, the lender decline is automatic. Smaller-ticket alternatives, MCA against card flow, and asset-backed structures work around it.
Why this decline happens
UK SMB lenders calculate maximum loan size as a percentage of turnover, typically 10% to 25% for unsecured term debt. Below the published turnover floor, the maximum loan size falls below the lender minimum ticket, so the application fails on size mechanics rather than credit. The fix is either a smaller-ticket lender, a product where the turnover calculation differs (asset finance, MCA), or borrowing against the personal credit profile rather than the company.
UK lenders that engage with this scenario
- iwoca · Flexi-loan / line of credit
Smaller-ticket flexi-loan; turnover floor is lower than mainstream term lenders.
- Tide loans (Funding Options) · Broker / aggregator (not a direct lender)
Bank-account-led; smaller-ticket working capital with low turnover floor.
- Capify · Merchant cash advance + term loan
MCA against card flow; the card flow is the underwriting, turnover floor far lower.
- Liberis · Merchant cash advance and BNPL for SMBs
Card-flow MCA; designed for smaller card-taking businesses.
- Capital on Tap · Business credit card with revolving credit line
Business credit card with revolving line; no turnover floor in the conventional sense.
Alternative finance routes
- Smaller-ticket working capital
iwoca, Tide, Capital on Tap go down to £1k facilities.
- MCA against card flow
Card flow is the underwriting basis, not turnover.
- British Business Bank Start Up Loan
Government-backed personal loan, £500 to £25k, no turnover floor.
Actions in order
- Confirm the lender turnover floor and the minimum ticket; many declines are mechanical (turnover x percentage = below their minimum).
- For sub-£25k tickets, route to smaller-ticket working-capital lenders (iwoca, Tide, Capital on Tap).
- For card-taking businesses, MCA lenders use card flow rather than turnover; the floor is far lower.
- For owner-managed sub-£100k turnover businesses, the British Business Bank Start Up Loan is often the cheapest route.
- Reapply to mainstream once turnover crosses the floor (usually £100k for a £25k loan).
Do not do this
- · Inflate turnover on the application. UK lenders cross-check against bank-statement data and the omission becomes the decline reason.
- · Take a personal loan to fund the company past the turnover gate without ringfencing the use of proceeds.
- · Apply to multiple mainstream lenders that share similar turnover floors; the second decline confirms the first.
FAQs
What is the typical UK lender turnover floor for a business loan?
Most mainstream UK SMB lenders use £100k turnover as the floor for a £25k unsecured term loan, scaling up: £200k turnover for £50k, £400k for £100k. Smaller-ticket lenders (iwoca, Tide) operate floors below £50k turnover. MCA and asset-finance lenders use card flow or asset value instead of turnover.
Can a business with under £100k turnover get any UK loan?
Yes. Smaller-ticket working-capital lenders (iwoca, Tide, Capital on Tap) operate on lower turnover floors. The British Business Bank Start Up Loan is a £500 to £25k personal loan with no turnover floor. Asset-finance lenders use asset value, not turnover, so any-turnover company can finance equipment.
Does turnover include VAT for lender purposes?
Most UK SMB lenders ask for turnover ex-VAT (the figure on the P&L, matching the Companies House filing). A few smaller lenders ask for inclusive-of-VAT figures from bank-statement data; check the application instructions before answering.
How quickly will lender turnover thresholds adjust to a growing business?
Most UK SMB lenders use either the most recently filed accounts or the most recent 12-month rolling turnover from bank-statement data. A growing business shows the higher figure as soon as the rolling 12 months is updated; this is usually monthly. File current-year accounts as soon as they are ready to bring forward the new figure.
Does the percentage cap on loan vs turnover ever change?
Yes. Mainstream lenders typically cap at 10% to 25% of turnover for unsecured debt. Asset-backed, secured and invoice-finance structures lift the cap (loans up to 70% of debtor book in invoice finance, 100% of asset value in asset finance). Specialist mid-market lenders extend to 30% to 40% on bespoke unsecured cases.
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Editorial only. We are not an FCA-authorised adviser. Last reviewed: 2026-05-09.