Business loan questions · Sorbus Finance
How Much Can My Business Borrow?
There is no universal turnover multiple that sets a business’s borrowing limit. Work out the amount required for the defined purchase or cash gap, then test candidate loan sizes against repayments the business can support while retaining working capital. Request a documented, responsible amount rather than treating a lender’s possible maximum as a target; each lender makes its own assessment.
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What this means for your business
Separate the total project cost from the amount that must be borrowed. For a purchase, list the supplier price and any delivery, installation or other costs, then subtract only the contribution the business can use without exhausting money needed for payroll, tax and day-to-day trading. For a cash-flow need, calculate the size and timing of the actual shortfall rather than borrowing against a broad turnover estimate.
Use that calculation to compare possible request sizes. For each, estimate the repayment on the proposed term and schedule, then check how much cash remains in ordinary and weaker trading months. Include current borrowing and committed bills. If the amount needed for the project would leave little room for a downturn, reconsider the project budget, timing, contribution or funding structure before submitting a request.
This page is about sizing the request, not a universal lender checklist or approval formula. Lenders use their own measures and may approve less, offer another structure or decline. The maximum a lender might make available is not automatically the maximum the business should take. Compare total repayable, fees, payment frequency and any security or guarantee before deciding what to request.
What a lender may examine
- Whether the requested figure ties to a costed purchase, defined project budget or calculated cash-flow shortfall, rather than an arbitrary round sum.
- How the business’s own cash contribution is calculated and whether it preserves enough operating and tax reserves.
- Whether candidate loan sizes leave room for existing repayments and essential outgoings across quieter as well as stronger months.
- Whether the requested term and repayment pattern match the purpose and the business’s cash generation; lender criteria and any security conditions are assessed separately.
A practical example
Hypothetical example: a manufacturer has a £42,000 machine quote and £12,000 it could contribute, but using all of it would leave too little for payroll and supplier bills. Rather than automatically asking for £30,000 or borrowing the full quote, the owner can cost delivery and installation, set a minimum cash reserve, and compare repayments for a smaller contribution or a larger facility that preserves working capital. The request should match the chosen plan and its forecast; this calculation does not predict what a lender will offer.
Illustrative scenario only, not a lender quote, case study or indication of approval.
When a business loan may make sense
- You can identify a defined investment, purchase or working-capital need and show how it supports trading or is repaid.
- You have reviewed cash flow and can explain how repayments remain manageable under a less favourable trading scenario.
When another finance product may fit better
- Invoice finance
May fit a business whose cash is tied up in eligible unpaid customer invoices, rather than a need for a general lump sum.
- Asset finance
Can be worth comparing when the funding is specifically for eligible equipment or vehicles, with the asset forming part of the finance structure.
- Cash Flow Business Loans
Explains borrowing aimed at a working-capital or timing gap rather than a long-term purchase.
Eligibility considerations
- The business will usually need to be UK-based and provide information that allows the lender to assess its legal structure, ownership and trading history.
- A lender may consider revenue, profitability, bank conduct, current commitments, credit history and security; thresholds and appetite differ by lender and product.
- Some applications require director support, a personal guarantee or security. These are lender and transaction-specific, not automatic features of every loan.
Information to prepare
- Recent business bank statements and, where requested, permission for an open-banking review.
- Filed accounts, current management accounts and a cash-flow forecast showing existing and proposed repayments.
- Details of current borrowing, tax liabilities, requested amount, use of funds, supplier quotations or contracts, plus ownership/director information.
Risks, costs and limitations
- Borrowing above the amount the business can repay can put cash flow under pressure, even if a lender is willing to offer it.
- Rates, fees, term, repayment frequency and early settlement terms vary; compare the total cost and consequences of missed payments.
- Security can put business assets at risk, and a personal guarantee can create personal liability. Read the full offer and obtain advice if unclear.
This is general guidance, not a lender's offer or a promise of eligibility. Each provider applies its own credit policy, checks, pricing, security requirements and terms. Borrowing creates a repayment obligation; review the total cost, fees and any personal guarantee before proceeding.
How Sorbus Finance can help
Sorbus Finance is an independent commercial finance broker, not a lender. It can discuss the purpose and affordability of the proposed borrowing and consider potentially relevant options from its panel of 150+ UK lenders. Lenders set their own criteria and make every decision; no amount or approval is guaranteed. Any fees and terms are explained before proceeding, and there is no upfront broker fee where applicable.
Sorbus Finance is an independent broker, not a lender. We can discuss options from a panel of 150+ UK lenders. There is usually no upfront broker fee; any proposed arrangement and commission will be disclosed. An enquiry is without obligation. Funding, rates and terms are subject to the lender's assessment and are never guaranteed.
Frequently asked questions
How should I work out the amount to request?
Cost the defined purchase or project, include relevant delivery or setup costs and subtract only funds the business can contribute while retaining an operating reserve. For working capital, calculate the size and duration of the forecast cash gap. Then test the repayment for that amount against existing commitments and weaker trading months.
Should I borrow the full purchase price or make a contribution?
Compare both using the cash the business can genuinely spare. A contribution may reduce the loan and repayments, but using cash needed for tax, payroll or suppliers can create a different shortfall. A larger request may preserve reserves but increases borrowing cost and repayment commitments; neither option is automatically best.
How much contingency should I add to my request?
Base any contingency on identifiable costs or uncertainty in a project budget, not an arbitrary uplift. Explain what it covers and include it in the repayment test. Ask the lender how unused funds or changes to the amount would be treated, as terms differ.
Does a lender’s indicative maximum tell me what I can afford?
No. An indicative amount is not a recommendation or final offer, and it does not replace your own cash-flow assessment. Check whether repayments leave enough for operating costs, tax, existing commitments and a reasonable reserve, including in a downside scenario.
Can I request a smaller amount than a lender says is available?
Yes. A possible maximum is not an obligation to borrow it. Ask whether a lower amount can fund the actual need and what the revised repayment and total cost would be. Avoid reducing the request so far that the project remains underfunded or its expected repayment source no longer works.
