Business Funding · 6 min read
How alternative lenders assess a funding application
Alternative lenders generally assess five things: how long the business has traded, what its bank and card turnover looks like, what the statements show about how money moves, the credit position of the company and its directors, and the sector it operates in. The weighting differs by product. A merchant cash advance provider reads card takings first; a term lender reads accounts and bank statements first.
Trading time
The first filter is usually a minimum trading period, and it is published. YouLend's own application route asks for three months of trading, per the Business Expert review this month. 365 Finance requires at least six months. Funding Circle requires a business to have been trading for one year or more. iwoca, writing about the market generally, says most merchant cash advance providers do not fund start-ups with less than three to six months behind them.
The reason is simple: the lender is predicting next month's sales from the last few months' sales, and it needs enough months to see a pattern.
Turnover through the card machine and the bank
For card-based products the headline figure is average monthly card sales. YouLend's direct route asks for £1,500 a month; 365 Finance asks for £10,000 a month on average. For loans, the lender is reading total revenue and what is left after costs.
Increasingly that data arrives through Open Banking rather than PDFs. Business Expert describes YouLend using Open Banking to access payment data and generate funding offers, which is why its application asks for a bank connection rather than filed accounts. Funding Circle, by contrast, asks for business bank statements covering up to the last eight months plus the latest accounts, including profit and loss and balance sheet information.
| Lender | Product | Minimum trading | Turnover test | Data route |
|---|---|---|---|---|
| YouLend | Merchant cash advance | 3 months | £1,500 card sales a month | Open Banking connection |
| 365 Finance | Merchant cash advance | 6 months | £10,000 average card sales a month | Card sales record |
| Funding Circle | Business loan | 1 year or more | Bank statements and accounts | Up to 8 months of statements, P&L, balance sheet |
Figures checked August 2026 against the sources below. Criteria change without notice.
What the statements are read for
Beyond the totals, an underwriter is looking at the shape of the account: whether the balance dips below zero, how often, whether there are returned payments, whether existing finance repayments are already going out, and whether the money coming in matches what the application says. Card lenders look at the consistency of daily takings, because that is the stream the repayment is taken from.
Existing advances matter more than most applicants expect. A second provider can see the first provider's deductions in the bank feed, and it is one reason why stacking advances is looked at carefully.
Company and director credit
The company's record and the directors' personal files are both generally read. The YouLend review describes searches on the business, the applicant, their financial associates and every director or officer authorised to act for the company, while noting that a steady sales record counts for more than a spotless file. iwoca says revenue-based lenders are more concerned with revenue and card sales than credit score, and that most conduct soft checks.
Where there is a CCJ, Funding Options notes it can stay on a record for six years, that a satisfied CCJ is viewed more positively than an unsatisfied one, and that lenders weigh time since the debt, repayment history and cash flow. Whether that is a decline or a condition depends on the lender.
Structure and sector
Business structure is a hard filter at some lenders. iwoca requires applicants to operate as a limited company or a partnership. Funding Circle's loan page is written for limited companies and LLPs. CapExpand introduces limited companies and LLPs only for finance products. Sector is a softer filter: many lenders publish a list of industries they do not fund, and that list is worth reading before applying rather than after.
When an alternative lender is not the right fit
If the business has not yet reached the published trading minimum, an application is unlikely to get past the first filter and may leave a hard search behind. If the need is long term and the business has the accounts to support a bank facility, a term loan is priced on interest over a fixed term, so the total repayable can differ a great deal from an advance; compare the total repayable on each offer rather than assuming either is cheaper. If the cash is tied up in unpaid B2B invoices, invoice finance lenders look mainly at the customers who owe the money rather than at the applicant.
CapExpand does not lend. We are an introducer: a UK limited company or LLP tells us about its trading, we introduce it to providers whose published criteria fit, and the provider assesses and decides. There is more on the process on our how we work page.
Frequently asked questions
How long does my business need to have been trading?
It depends on the lender and product. Published minimums we checked in August 2026: YouLend three months, 365 Finance six months, Funding Circle one year or more. iwoca notes that most merchant cash advance providers do not fund start-ups with less than three to six months of trading.
What is Open Banking and why do lenders ask for it?
It is a secure connection that lets a lender read your business bank transactions directly, with your permission, instead of working from PDF statements. Business Expert describes YouLend using it to access payment data and generate funding offers, which is why the application asks for a bank connection rather than filed accounts.
Do alternative lenders look at my personal credit file?
Generally yes, alongside the company. The YouLend review describes searches on the business, the applicant, their financial associates and every director. Many lenders use a soft search at the decision stage; Funding Circle states a limited company can get a decision without affecting its credit score.
What documents are usually requested?
Funding Circle asks for business bank statements covering up to the last eight months and latest accounts including profit and loss and balance sheet information. Card-based lenders commonly work from an Open Banking connection and card processing data instead. Requirements vary by lender.
Does CapExpand assess applications?
No. CapExpand is an introducer. We match what a UK limited company or LLP tells us about its trading with the published criteria of funding providers, and introduce the business to the provider. The assessment and decision are the provider's.
Sources (checked August 2026)
- Business Expert: YouLend review, 18 August 2026 (minimums, Open Banking, searches)
- 365 Finance: FAQs (minimum trading and card sales)
- Funding Circle: Small business loans (eligibility, documents)
- iwoca: Merchant cash advance explained (start-ups, soft checks)
- iwoca: Who is eligible (company structure)
- Funding Options: Business finance with a CCJ
Match your trading record to the right provider
CapExpand introduces UK limited companies and LLPs to funding providers whose published criteria fit. Start with the two-minute form, or call 0333 041 3127 during office hours.
Check your optionsImportant information
CapExpand Ltd is not authorised by the Financial Conduct Authority and can only complete non-regulated introductions. We work with UK limited companies and LLPs only, for business and commercial purposes. We are not a lender and we do not provide financial, tax or legal advice. We work with a panel of lenders whose particulars are available on request, and we receive commission from the lender if a deal completes, at no cost to you. All lending is subject to status, valuation where applicable and the lender's own checks.
Registered office: Pure Offices, Lake View Drive, Annesley, Nottingham, NG15 0DT. Company No. 14433858.
CapExpand Ltd (Company No. 14433858) is a commercial finance introducer, not a lender. We are not currently authorised or regulated by the Financial Conduct Authority and do not provide financial advice. All information on this page is for educational purposes only. Funding is subject to status and lender criteria. CapExpand will receive a commission from providers at no extra cost to you.