What is the eligibility criteria to apply for finance?
Each lender will have their own eligibility criteria for their financial products. However, as a guide, here are some of the common ones:
Your business must be UK-based.
Most lenders require 12 months minimum trading history; however some lenders will accept a shorter history.
The minimum annual turnover amount required varies by lender.
We recommend that you check the lender’s specific eligibility criteria and confirm your business meets their requirements before applying for the financial product.
Note that, for regulatory reasons, you won’t be able to apply for small business finance using your Xero data if you are an individual, partnership of two or three persons (unless all partners are bodies corporate), or an unincorporated body of persons (unless all persons are bodies corporate) which is not a partnership.
How does Xero choose which lenders they partner with?
We work with lenders who share our vision of helping more small businesses get access to capital and who have the technical capability to build beautiful experiences for our joint customers. We don’t aim to work exclusively with any one lender; we’d rather give our small business customers a range of lenders and financial products to choose from, as we recognise that every business is unique with different circumstances and financing needs. All of our lending partners must complete Xero’s developer certification process and adhere to the standards required for certification.
Xero is committed to helping more small businesses get access to capital so that they have the financial means to run and grow their business. So we partner with lending institutions globally – both banks and alternative lenders – and build direct integrations which allow businesses to share their financial reports and data in Xero directly with the lender during a loan application. This gives the lender immediate access to the information they need to be able to assess the loan application and make a decision.
What are the benefits of using my Xero data to apply for a loan and who will benefit?
Provided that your business’s financial information is correct and up-to-date, your Xero data is your best asset when it comes to applying for a loan. Connecting your Xero organisation to a lender to apply for a loan means:
You can save time: When you need business finance, speed is critical. Instead of spending weeks or longer trying to get finance, apply online with one of our lending partners and connect your Xero organisation so the lender has access to all the information they need to assess your application. You may be able to apply in as little as 20 minutes (depending on the lender and financial product selected); just make sure your information is correct and up-to-date in Xero. The easier it is for the lender to assess your application, the faster they can make a decision.
Share your financials directly with the lender: Lenders need to see your business financials to assess your loan application, so why not share them straight from Xero? It only takes a few minutes during the lender’s application process.
You get a decision sooner: By giving the lender access to the information they need to be able to assess your application, you’ll get a decision sooner. The quicker you know the decision, the quicker you can act.
Your data is safe: We’re committed to the security of our customer data and provide multiple layers of protection for the personal and financial information that you trust to Xero. To help you understand how we protect and secure data, we encourage you to read our policy on security at Xero.
The power is in your hands: Your Xero data will only be shared with the lender once you’ve given your permission. We will never share your Xero data without you telling us to.
The lender will also benefit from you sharing your Xero data, as they will have real-time access to the financial information they need to be able to assess your loan application. This reduces the back-and-forth and enables the lender to make a much faster decision.
What type of financial products are available from Xero’s lending partners?
Our lending partners offer a range of financial products. These include both short-term and longer-term financing solutions, such as invoice financing, a line of credit, business loans and business cash advances. Learn more about these products.
We understand that when you need finance, speed is critical. Prior to lending integrations being available, businesses would typically need to manually export and share documentation with lenders in order to be assessed for credit, resulting in time-consuming and sometimes inaccurate lending processes. Our lending integrations allow you to apply for finance faster, by enabling direct sharing of Xero data with the lender. Simply apply online and connect your Xero organisation in a few clicks to share your data. Our lending partners generally support a fast decision time so you may receive a response the same day, however this will depend on the lender.
Your Xero data will be used by the lender to assess your loan application. Lenders require accounting data to assess loan applications, so sharing this information directly from Xero makes it easier and faster.
This depends on the lender. Some lenders have built their platform and credit decision models based on being able to access business data through an accounting package such as Xero, whereas other lenders allow you to apply without connecting your accounting package.
Yes, the data that’s shared with the lender is the same data that you can see in your Xero organisation. This includes business details and financial information, the business’s transaction history, profit & loss statement and balance sheet. We recommend you make sure that the information in Xero is correct, complete and up-to-date before sharing it with the lender.
How long does it take to apply for finance if I share my Xero data with a lender?
You may be able to complete the application in as little as 20 minutes (or even faster for some lenders), provided your information is correct and up-to-date in Xero. The steps to connect and share your Xero data with the lender take just a few minutes during the application.
Visit your selected lender’s website directly to apply for a loan (or other financial product). The lender’s application will guide you through the information they require and will offer you the opportunity to connect your Xero organisation. At this point, you’ll need to enter your Xero login credentials, accept the data-sharing terms, and provide your consent before your Xero data is shared with the lender. Once this is done, you just need to finish and submit the application. The lender will let you know if it is approved.
How can I improve my chances of being approved for a loan?
Firstly, we recommend that you have an accountant or bookkeeper to set up and oversee your Xero accounts. You can find an experienced advisor here. Then, work with your accountant or bookkeeper by following this checklist to help ensure your Xero data is in the best position to share with the lender:
Connect your bank feeds to Xero so your transactions automatically flow in.
Create bank rules to help make it easier for you to reconcile transactions.
Use other features in Xero to automate the flow of information in, such as email to bills. The more information that flows in, the more powerful your Xero data becomes.
Make sure that all your transactions are reconciled before you start a loan application.
It’s important to make sure that information in Xero is complete, correct and up-to-date so that when you apply for business finance, the lender sees an accurate representation of your business and can make a decision faster.
How do I know which financial product is best suited to my business and needs?
We recommend that you consult with your accountant or other business advisor to discuss the best financing option for your business. You can then come back to Xero to see which of our lending partners offer the type of financial product you need. Learn more about financial products.
We’re committed to the security of your data and provide multiple layers of protection for the personal and financial information you trust to Xero. To help you understand how we protect and secure data, we encourage you to read our policy on security at Xero. It includes the option to request Xero’s Service Organization Control (SOC 2) report for formal reviews of compliance obligations and for evaluating controls relating to security, availability and confidentiality.
If I choose to share my Xero data, will the lender then have ongoing access to my data?
Yes, the lender will have ongoing access to your data in Xero once you provide your consent during the application. Ongoing access to your Xero organisation allows the lender, for example, to see that the business remains creditworthy. Some lenders will require ongoing access to your data during the term of the loan facility, so we suggest that you check this with the lender before removing their access.
You can remove the lender’s access to your data from Xero: just go to Settings > General settings > Connected apps