What checks will lenders carry out?

UK SMB lenders carry out four classes of check before approving a loan: identity and address verification on directors and significant shareholders (KYC), credit checks on the business and on connected individuals (soft at quote, hard at full application), affordability and trading verification against bank statements and accounts, and (where security is taken) charge registration and asset valuation.

Identity checks under ECCTA 2026 rules require Companies House identity verification for directors and persons of significant control. Lenders cross-check name, date of birth and address against Companies House records and reject applications where these do not reconcile. Address verification is typically done electronically against Royal Mail and credit reference agency data.

Credit checks split between commercial and consumer files. The business credit profile is pulled from Experian, Equifax or D&B and includes payment behaviour, CCJs, county court applications, charges registered at Companies House, and any group-level adverse data. The director's personal credit file is pulled if a personal guarantee is in scope. For sole traders and unincorporated partnerships, the personal credit file is the primary source.

Affordability is verified against the last 6 months of business bank statements and the latest filed accounts. Lenders model debt service coverage ratio (DSCR) against forecast trading and reject where servicing exceeds the lender's threshold. Charges over assets are registered at Companies House within 21 days of completion. See our DSCR calculator for how lenders model affordability, and will lenders run soft or hard credit checks and when for the credit-check timing.