2 min read
Why a holdco is different
A holding company exists to own shares in other companies. It rarely has its own customers or revenue — its income is dividends passed up from subsidiaries. A lender repaid from cash flow needs to see where that cash is generated.
The usual route
Where the group needs funding, it is normally cleaner for the trading subsidiary to borrow, because that is where the turnover and margin live. The holdco can still be party to the arrangement. If the holdco itself needs money — say to fund an acquisition — the lender will look through to group cash flow.
What to prepare
Have the group structure and the last filed accounts for each trading entity ready. Use the affordability calculator against the trading company's numbers, then apply online.
Frequently asked questions
Can the holdco guarantee a subsidiary's loan?
In group lending a holdco often gives a company (not personal) guarantee for a subsidiary. Credicorp lends to the trading company on its own cash flow with no personal guarantee from directors.
What if the holdco owns property let to the trade?
That intra-group rent is income the lender can assess. It still helps to borrow through the entity with the clearest, most predictable cash flow.
Related reading
Can my company borrow against future sales?
Yes — a UK company can borrow against its future sales. Several finance types are built around expected…
Read →
Does my company structure affect borrowing?
Yes — your structure affects both how finance is assessed and how exposed you are personally, with a limited…
Read →
Company credit vs personal credit explained
Your company and you, the director, have two separate credit records. This guide explains how each is built,…
Read on Learn →Can a Holding Company Borrow Against Its Subsidiary Revenues?
A UK holding company can borrow commercially, but lenders will look at the consolidated group trading…
Read →Funding for UK limited companies
Credicorp lends to your company, not to you personally — short-term working capital with no personal guarantee. See what your business could access.