When you are applying to a broker or direct to a lender for a business loan or a commercial mortgage, the lender will need to satisfy themselves that firstly, their investment is safe and secondly, that your business will be in a position to realistically bear the cost of the monthly finance repayments which is an entirely responsible approach.

Having completed your application, the lender will run a simple credit check on the business and will be able to judge from your latest set of accounts (if they are available) the current financial position of the organisation.

They will work out your current LTV (loan to value) and the expected LTV including the loan amount you are applying for. This will mean calculating the total amount of outstanding credit of the business and dividing that figure by the value of the assets of the business. This figure rarely, if ever, exceeds 85% for most commercial lenders in the UK although each will have their own limits that they are prepared to lend to.The lender will then look at the business's credit rating, analysing in depth, the credit repayment history. They will be specifically looking for adverse which can be made up of things like:

- Late or missed commercial mortgage payments

- Defaults on any credit or loans

- CCJ's involving credit or loans

The level of adverse will help the broker or lender to build a picture of the likely risks they may face in lending the money to your organisation. A poor credit history suggests that the lender may face higher risks and as a result, may offer a reduced loan amount and/or a higher APR. This is why it can be to your significant advantage if you keep your credit rating as clean as possible. It makes acquiring finance and also the costs of that finance, much cheaper in the long run.

To support your professional business loan or commercial mortgage application, you may be required to provide any or all of the following:

- Financial projections

- A business plan

- An executive summary which may include - loan type (secured or unsecured lending), amount required, loan purpose and perhaps any profits that you could expect to make as a result of taking out the loan.

- Company incorporation certificate - in the event that your organisation is either a Public or Private Limited Company

- Bank account information

- Credit References

- Latest accounts

- Personal ID

The initial enquiry for a business loan or commercial mortgage is often a very simple affair. There are many online brokers who may be able to help. Complete the enquiry form and you should get a response, often within a few minutes. Subject to your providing all of the necessary documentation required by the chosen lender it may be possible to complete the application and have the funds available within a couple of weeks which means that your business could be benefiting almost straight away.

Always be realistic in setting your business and financial goals however and always be honest with your broker and lender. The information that they require helps them to help your business aside from the fact that you will be entering into a legally binding agreement.

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