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.
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.
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.