Business loan declined: insufficient turnover

Why turnover decides what you can borrow

Most lenders cap the loan they will offer at a proportion of your annual turnover, and they test affordability by checking that the new monthly repayment fits within a slice of your free cash flow (commonly a quarter to a third of it). Below their minimum turnover threshold, there is simply not enough headroom to underwrite a meaningful ticket within their own rules, so the application is declined on policy rather than on conduct or credit history. Mainstream fintech lenders often set the floor around £100,000 to £200,000 of turnover; high-street banks frequently sit higher.

Match the product to the income you have

The fix is usually to change the product, not just the lender. A smaller-ticket merchant cash advance underwrites against card or bank flow rather than filed turnover, so a business with strong daily takings but modest annual turnover can still qualify. Asset finance secures against a specific piece of equipment, where the asset, not the turnover, is the security. If you raise B2B invoices, invoice finance advances against the debtor book and scales with sales. An iwoca flexi-loan also engages at a lower threshold than the banks.

What to do next

Right-size the ask to your turnover before reapplying, and consider an asset-backed or flow-based product where the security stands on its own. If the real issue is that your debt service is already stretched, that is a different problem; see the affordability-ratio routing. The eligibility and affordability tools help you size a realistic request. FundBiz matches limited companies, LLPs and partnerships of four or more to FCA-authorised lenders; run the matcher to be routed to lenders whose thresholds fit your numbers.