How does a lender decide how much to offer me?

2 min read

AffordabilityThe main driver

Turnover-linkedOften a multiple

Existing debtReduces capacity

Cash flowMust service it

What sets the ceiling

Lenders start from what you can afford to repay, not what you ask for. They look at turnover — often applying a rough multiple — then adjust for profitability, existing commitments and cash-flow strength. A company with strong, steady cash flow and little existing debt is offered more than one with the same turnover but tight margins or heavy borrowing. The underwriting guide covers the mechanics.

Why your request is only a starting point

You state an amount, but the lender tests it against affordability. Ask for more than the cash flow supports and they either offer less or decline; ask for a sensible figure and you are more likely to get it in full. Sizing the request well, using the funding-requirement calculator, improves your odds.

Influencing the figure

Strengthen the numbers the lender relies on: keep debt down, show consistent turnover, provide a credible forecast, and connect Open Banking so trading is visible. Confirm the repayment fits with the affordability calculator before you apply, and you and the lender will likely land on a similar number.

Frequently asked questions

Can I ask for more than the lender first offers?

You can, but the offer reflects affordability, so a higher amount usually needs stronger figures or a longer term to keep repayments manageable. Sometimes security unlocks a larger facility.

Does existing debt reduce how much I can borrow?

Yes. Existing repayments reduce the cash available to service new borrowing, so heavy current debt lowers the amount a lender will offer. Reducing or consolidating it first can raise your capacity.