Funding with a CCJ
It is still possible to get a business loan even if you are subject to a CCJ by going to a specialist lender.
Funding options with a CCJ
Of course, having a CCJ attached to your business is not ideal, but different options are still available.
Secured loans
A secured business loan is a type of loan where the borrower uses company assets as security. This is sometimes referred to as asset-backed lending. Business owners will usually put forward property plant and machinery. Other types of secured lending include invoice finance, where accounts receivable are discounted for upfront cash.When assessing a business owner's eligibility for a new loan, lenders will consider any existing CCJ. However, if valuable assets are used as collateral, it will reduce the risk exposure for the lender, and it might be possible to secure a new loan. Before contacting a credit broker or lending platform, always ensure that they are authorised and regulated by the financial conduct authority. Suppose the financial conduct authority does not regulate the lender. In that case, they risk having lending practices that aren't in line with prudential regulations from the Financial Services Authority (FSA).
Unsecured loans
An unsecured loan is generally not supported or secured against a company asset. As such, this poses a much higher risk to the lender, given that they have no guarantee of getting their money back. Indeed, this is the main reason why unsecured loans carry higher interest rates. Also, the loan amounts you can apply for will be much smaller, and the repayment period will spread over a shorter time frame.
A loan applicant's eligibility will be assessed based on the company's trading position. Often, a lender will specify the loan amount as a multiple of turnover. This is one way of estimating the likelihood of a borrower repaying a loan, despite carrying a CCJ from previous business affairs.
Bridging loans
While unsuitable for long-term business financing, a bridge loan provides you with fast cash (12 months or less) to cover cash flow gaps while seeking alternative longer-term financing options.
A bridge loan is short-term financing (typically 12 months or less) that provides an immediate cash boost while you wait for longer-term funding. With a CCJ, it might be the case that the interest rates on offer are higher. However, clearing the CCJ before applying will count towards your bridging loan application. Similarly, for asset finance, a lender will always consider if you have recently removed an existing CCJ. If not, the rates and repayments terms will be much less favourable.
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How to get a loan with a CCJ?
Three options
In essence, only three options are open to you as a business owner with an open CCJ. First, you pay the judgment, and all funding options will be available again. Second, you can try to have the CCJ excused, involving going to court to explain why you don't owe the debt in question with the help of a solicitor. Or, third, you can seek a loan with a CCJ.
Diverse market
The lending market is diverse. Many lenders understand that a business with a CCJ might still have a viable business model and the ability to repay a new loan. It might have been an unforeseen cash flow issue that resulted in the CJJ. For example, a key customer missed a large payment, resulting in debt accumulation. Niche lenders can work with a business and look at the entire business and its plans for the future and not just the details on a credit file.
How much can you afford to borrow?
If you're ready to take your business to the next level, use our business loans calculator to get an idea of what you can afford.
Want to understand the cost of your loan?
Use our business loan calculator below to find out how much you can borrow to take your business to the next level.
Calculations are indicative only and intended as a guide only. The figures calculated are not a statement of the actual repayments that will be charged on any actual loan and do not constitute a loan offer.
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Financial product information
Representative example*
• 7.63% APR Representative based on a loan of £50,000 repayable over 24 months.
• Monthly repayment of £2,252.94. The total amount payable is £54,070.56
*Some lenders may apply fees during the application process, please note that these are set and provided by these entities.
Annual Percentage Rates
Rates from 2.75% APR
Repayment period
1 month to 30 years terms
What is a CCJ?
County Court Judgement
A CCJ is one thing you never want to get as a business owner. It stands for County Court Judgement and is issued by the courts if you renege on an outstanding business loan or purchase payment. A court can effectively demand payment if you owe money to creditors or lenders and still haven't cleared the debt after formal warnings. Unless you remove the debt within thirty days, the court judgment will remain on your record for up to six years. This will make it much harder if you are borrowing money in the future.
Timeline
The ruling will state how long you have to pay it back and specify formal repayment deadlines. Unfortunately for business owners, CCJs are recorded on your credit profile unless you repay the total amount within one month of receiving the court order.
Government website
You can access further information about CCJs on the government's website or search for details of any CCJs against you on the register of judgments.
Why having a CCJ is a problem?
Credit score
When a lender decides to issue a business a loan or not, they will consider your credit score. One of the primary eligibility criteria a lender will have is that you don't have a history of bad credit.
Business in distress
Credit histories of businesses can be negatively affected by a CCJ, and a lender will be able to see what amount is owed and if any effort has been made to clear the CCJ. Lenders will consider a CCJ as evidence that the business is in distress.
Suppliers and credit
It could also be the case that suppliers will check a CCJ and decide whether it's too risky for them to extend any further credit to you. Remember that a CCJ doesn't necessarily rule a business out of financing. But it will be more complex, and most likely, you will have to pay a higher interest rate.
How do I apply for a business loan with a CCJ?
Funding Options by Tide
Funding Options helps UK firms access business finance, working directly with businesses and their trusted advisors. Funding Options can introduce applicants to a number of providers based on the applicants' circumstances and creditworthiness, with all quotes being subject to status and income. Apply today to get the funding you need to trade, plan, and grow with confidence.
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Please note that the information above is not intended to be financial advice. You should seek independent financial advice before making any decisions about your financial future.
It’s important to remember that all loans and credit agreements come with risks. These risks include non-payment and late-payment of the agreed repayment plan, which could affect your business credit score and impact your ability to find future funding. Always read the terms and conditions of every loan or credit agreement before you proceed. Contact us for support if you ever face difficulties making your repayments.
Funding Options, now part of Tide, helps UK firms access business finance, working directly with businesses and their trusted advisors. Funding Options are a credit broker and do not provide loans directly. All finance and quotes are subject to status and income. Applicants must be aged 18 and over and terms and conditions apply. Guarantees and Indemnities may be required. Funding Options can introduce applicants to a number of providers based on the applicants' circumstances and creditworthiness. Funding Options will receive a commission or finder’s fee for effecting such finance introductions.
