Head of Underwriting
Frequently Asked Questions
Hi I’m Tamsin, the Head of Underwriting at MaxCap. We specialise in providing business loans to small businesses in the UK. We aim to take the complexity out of getting a business loan, and ensure we provide a simple, transparent and hassle-free process. We also strive to offer a human-touch approach to every step of the process. Please take a look at the answers I’ve provided to the questions raised by our wonderful customers.
There are 3 main credit reference agencies in the UK – Experian, Equifax and TransUnion. They will hold all your information which lenders will use on what accounts you have, how frequently these are paid and if you have any defaults or CCJ’s. These agencies offer free access to you full credit report and score, which you can access through their websites.
- Equifax – https://www.equifax.co.uk/
- Experian – https://www.experian.co.uk/
- TransUnion – https://www.transunion.co.uk/
My advice would be to take a look at your report and see if there is anything there that you are not aware of and contact one of the credit reference agencies to discuss any anomalies you may find. The agency has 28 days to remove the information or tell you why they don’t agree with you.
I would also advise that you check your files at least a couple of times a year.
Please visit the Insights page on our website which has an informative blog on how you can improve you credit score.
We require up to 6 months bank statements from you so that we can access the business affordability. We will then pull business and personal credit reports and gather information about you and the business to complete a full assessment.
Yes. Your business is assessed more on the affordability of a loan from the bank statements you provide us. We then would assess these to determine if you can meet the repayments
Yes we can. If your current loan has up to 50% of the outstanding balance paid, without any payment issues, we can re-assess your business to see if we can advance further funds to you.
You need to contact MaxCap as soon as possible so that we can help try to manage the repayments through this difficult period. We will work with you in making a plan of what you can pay and making up for any shortfalls when cash flow becomes more available.
It is so important that any customer experiencing cash flow difficulties, with whichever funder you have a facility with, talks to the company prior to payments being bounced. This could also save on bank charges and missed payments showing up on business reports, which could effect your credit rating and the ability to get funding. I can’t speak for all lenders but delaying what is a difficult conversation, can effect how the funder will proceed going forward.
The information across the credit reference agencies may differ but in general, the following information will be included:
- Your name, address and date of birth
- Search footprints on your file, such as credit applications
- Financial links to other people, for example a joint loan or bank account
- How much money you owe to lenders
- Any late/missed payments or defaults
- Any County Court Judgments (CCJs) against you that weren’t paid in full within one month of receiving the notice
- If you’re on the electoral register at your current address
- If you’ve been declared bankrupt or entered an IVA (Individual Voluntary Arrangement)
We are looking to see your available cash each month and daily balances as well as assessing if there is seasonality in your business. Ultimately, your cash flow needs to support any advance MaxCap would offer you, without putting it under pressure.
In simple terms, this means that all UK-regulated banks will share your financial data, provided you have given permission, for example: spending habits, regular payments and companies you use (basically your bank, credit card or savings statements) with authorised providers offering budgeting apps, or other banks. You do have the right to not participate as it’s not mandatory. If you do allow access, you have the right to withdraw your permission at any time.
It is hoped Open Banking will bring more competition and innovation to financial services which, in turn, is hoped will lead to more and better products to help manage your money. For example, you could connect your bank account to an app that would analyse your spending and recommend a new product, like a credit card or savings account to save you money or sign up to a provider which displays all your accounts with multiple banks in one place, so you have a better overview of your finances.
The data that is provided to funders through Open Banking is over a period of a year, which can also save time on having to provide copies of PDF statements.
Here is a helpful website that explains what Open Banking is in more detail https://www.openbanking.org.uk/customers/what-is-open-banking/
Yes, you can but these must not be recent or for high values. This applies to both business and personal CCJ’s.
Yes, we do. This is an individual’s legal promise to repay finance issued to a business for which they serve as a director. Basically, if the business defaults on a loan, a finance company can pursue you personally for the repayment of the debt, via the guarantee and through your own assets and personal capital. It is worth noting that giving a personal guarantee will not affect your personal or business credit score, however the business credit score will be affected by defaulting on the loan.
No, this is not required when applying for a loan with MaxCap.
No but we do have a minimum score criteria that we will accept, so if you have outstanding defaults, CCJ’s or lots of missed payments, these will have a negative impact on your credit score and possibly take you outside of our criteria.
No, it won’t because we only do ‘Soft Credit Checks’. This is allowing us to take a quick look at your credit report to ensure there is nothing included that could impact your application. Further information can be found on the following website. https://www.experian.co.uk/consumer/guides/searches-and-credit-checks.html
No, you don’t with MaxCap. This would be a typical request for long term lenders (up to 5 yrs) to want the principles of the business to be homeowners, in view of the longer risk period.
It’s not possible to claim tax back on the capital part of the loan repayments, however, it might be possible to do so on the interest you pay. My advice would be to consult with your accountant.
At MaxCap we don’t ask for a debenture.
Generally, these are used by a Bank, Factoring or Invoice Financing company but they can also be taken against high value, assets or long-term loans.
A debenture is a loan agreement between a borrower and lender that is registered at Companies House. This gives the lender security over the borrower’s business assets in either a fixed charge or floating charge. Fixed charges are over book debts, freehold or leasehold property and plant and machinery fixed to the floor. A floating charge are items not caught in the ‘Fixed Charge’, and are typically movable assets such as trading stock, equipment, furniture and computers. These can only be issued against a Limited or Limited Liability Partnership (LLP).
You can use these loans to assist you with your cash flow; project work; expansion / growth which can include hiring of new staff, marketing and advertising costs; launch of new products; stock; equipment; paying VAT bills and if your business is seasonal, managing cash through the slower months.
What you can’t use these loans for is anything to do with a personal matter.