Asking your bank for a business loan can feel daunting, but it doesn’t have to be. With the right preparation, you can give yourself the best possible chance of getting a positive outcome.

Start with a clear purpose
Banks want to know why you need the money. Are you looking to grow, cover short-term cash flow gaps, or invest in new equipment? Be specific. A well-defined reason gives your request more weight.

Get your figures in order
Before approaching the bank, make sure your accounts are up to date and accurate. Be ready to provide recent financial statements, cash flow forecasts, and details of any outstanding debts. Banks want to see that you understand your numbers and can manage repayments.

Create a solid business plan
A clear, realistic business plan is vital. It should outline what your business does, your market, how you make money, and your plans for growth. Include how the loan will help, and how you intend to pay it back. This builds trust and shows that you’ve thought things through.

Know your credit position
Check your business and personal credit scores in advance. If there are issues, be ready to explain them. Banks will always consider risk, so transparency is important.

Be realistic and professional
Ask for a sensible amount based on your business size and turnover. Approach the meeting professionally—treat it like pitching to an investor. Be confident but open to questions.

Consider alternatives
If your bank says no, ask for feedback. You could explore government-backed schemes like the British Business Bank or look into alternative lenders and credit unions.

Preparation, clarity, and confidence go a long way when asking your bank for support.

If you're self-employed, lenders may require an SA302 and tax year overview as proof of earnings for mortgages or loans. These documents verify income declared on your self-assessment tax return and are easily accessible via HMRC. Learn how to obtain them.

The use of these forms has become more widespread since mortgage regulations began requiring self-employed individuals to provide verifiable evidence of income. The SA302 serves as proof of income for the last four years of self-assessment tax returns.

The SA302 document provides a detailed breakdown of the income reported on the taxpayer’s self-assessment tax return, including commercial versions of the tax return. Meanwhile, the tax year overview confirms the tax due based on the return submitted to HMRC, showing any payments made, and cross-referencing the Tax Calculation with HMRC’s records.

Self-assessment taxpayers can request an SA302 tax calculation through HMRC’s online service. After submitting an online tax return, it typically takes around 72 hours for the documents to become available for printing.

Most lenders will accept an SA302 printed directly from online accounts or from the commercial software used to submit tax returns. HMRC has been actively working with the Council of Mortgage Lenders and its members to expand the number of lenders willing to accept self-serve copies of these documents as valid proof of income.

When selling assets on which capital allowances were claimed, you may need to adjust your taxable profits with a balancing charge or allowance. Understanding these rules ensures you don’t face unexpected tax liabilities. Learn how to handle asset disposals correctly.

Typically, the value of the asset sold is considered to be the amount for which it was sold. However, if the asset was given away, no longer used, or sold for less than its market value, then the market value should be used.

If you initially claimed 100% tax relief on the asset, the business is required to add back the difference between the sale price and the original value to their taxable profits. This adjustment is known as a balancing charge. A balancing charge ensures that a business does not receive more tax relief than it was entitled to on the purchase of the asset. Essentially, the balancing charge operates in the opposite manner to a capital allowance, increasing the amount of profit on which tax is due.

If writing down allowances were used initially, you may face either a balancing charge or a balancing allowance.

There are specific rules that apply when calculating a balancing charge, particularly in the following cases:

• If you originally claimed a super-deduction or special rate first-year allowances.
• If you claimed full expensing or 50% first-year allowances.

In the year your business closes, instead of claiming capital allowances, you must enter a balancing charge or balancing allowance on your tax return.

If you are self-employed as a sole trader or a partner in a business partnership, you are required to maintain suitable business records as well as separate personal income records for tax purposes.

For tax compliance, these business records must be kept for at least five years from the 31 January submission deadline of the relevant tax year. For instance, for the 2023-24 tax year, where online filing was due by 31 January 2025, you must retain your records until at least the end of January 2030. In some situations, such as when a return is filed late, you may be required to keep the records for a longer period.

As a self-employed individual, you should keep a record of the following:

• All sales and income
• All business expenses
• VAT records if you're VAT registered
• PAYE records if you employ anyone
• Records of your personal income
• Details of any grants received if you claimed using the Self-Employment Income Support Scheme (SEISS) due to coronavirus

You don't necessarily need to keep the original physical records. Most records can be stored in an alternative format, such as scanned copies, as long as they can be retrieved in a readable and uncorrupted format.

If any of your records are lost or unavailable, you must attempt to reconstruct them. If the figures are estimated or provisional, you must inform HMRC accordingly. Failing to keep proper or accurate records can result in penalties.

When selling a business, the Transfer of a Business as a Going Concern (TOGC) rules can allow the transaction to be VAT-free if key conditions are met. This prevents unnecessary VAT charges and ensures compliance with HMRC. Learn how TOGC applies to your sale.

A TOGC is defined as "neither a supply of goods nor a supply of services” meaning it falls outside the scope of VAT and no VAT would be charged on the sale.

For the TOGC rules to apply, all of the following conditions must be satisfied:

• The assets must be sold as part of a business that is operating as a "going concern." This means the business must be actively running, not just an 'inert aggregation of assets'.
• The purchaser must intend to use the assets to carry on the same type of business as the seller.
• If the seller is a taxable person, the purchaser must either already be a taxable person or become one as a result of the transfer.
• If only part of the business is sold, it must be capable of operating independently.
• There must not be a series of immediately consecutive transfers.
• Additional conditions apply to transactions involving land.

The TOGC rules can be complex, and both the seller and buyer need to ensure they comply with all the conditions. These rules are mandatory, so it's crucial to establish whether a sale qualifies as a TOGC from the outset. For example, if VAT is charged incorrectly, the buyer cannot recover it from HMRC and would need to seek reimbursement from the seller.