June 2nd, 2017.

If you’re considering a business loan, at some point in the application process you’ll probably be asked whether you’re a UK homeowner. It might sound daunting, but there are actually a few different reasons that business and homeowners get linked by lenders like this. You don’t have to be a homeowner to get a business loan — but it might help, and here’s why.

Secured loans

The most obvious reason that lenders ask about your homeowner status is because owning property means you have a personal net worth. In other words, the value of your property can be used as security for a loan. This option isn’t right for everyone, but if you’re willing to use your personal equity to get a loan, it can make the difference between a ‘no’ and a ‘yes’.

The most common example is a business owner who has built up significant personal assets over a long career, but only recently launched the business. In these cases, lenders will find it difficult to lend to the business based on a short trading history; but may well consider a loan based on the director’s personal assets, such as their home.

Personal history
Another common reason that lenders want to know about your home is because of the implications it has about your personal history. Although lenders will, of course, look at the business’s information, like bank statements and filed accounts, in many..... 

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