Can You Get a Business Loan With a CCJ?
Having a County Court Judgment (CCJ) doesn’t necessarily mean the end of your business finance options.
While a CCJ can make obtaining finance more challenging, different lenders have different appetites when it comes to adverse credit. Some specialist lenders are prepared to consider applications involving historic, satisfied or even outstanding CCJs depending on the wider circumstances.
This is where Revia can help bridge the gap.
Rather than assuming a CCJ means an automatic decline, we can look at the circumstances surrounding it, understand the wider financial position of the business and identify lenders from our network that may be prepared to consider the application.
What Is a CCJ?
A County Court Judgment can be issued when someone owes money and a creditor takes court action to recover the debt.
If the court determines that the money is owed, the judgment will set out how the debt should be repaid.
For businesses seeking finance, a CCJ can become relevant because lenders commonly undertake credit checks as part of their assessment.
However, the existence of a CCJ is only one part of the overall picture.
Can a Business Get Finance With a CCJ?
Potentially, yes.
Having a CCJ does not automatically prevent a business from obtaining finance.
Some mainstream lenders may have strict credit criteria that make an application more difficult, but the commercial finance market extends considerably beyond the high-street banks.
Specialist and alternative lenders can take different approaches to adverse credit and may consider the circumstances behind a CCJ alongside the current financial position of the business.
The options available will depend on the individual application.
What Will Lenders Consider?
Not every CCJ is treated in exactly the same way.
A lender may consider factors including:
- The value of the CCJ
- How recently it was registered
- Whether it has been satisfied
- Whether there is one CCJ or a history of adverse credit
- Whether the judgment relates to the company or a director
- The circumstances that resulted in the CCJ
- Current business turnover and profitability
- Existing borrowing and other financial commitments
- The amount and purpose of the finance required
- Whether security is available
A relatively small historic CCJ against an otherwise financially strong business can present a very different lending proposition from multiple recent unsatisfied judgments.
Understanding that distinction is important when deciding which lenders to approach.
What if the CCJ Is Still Outstanding?
An outstanding CCJ can make obtaining finance more difficult, but it doesn’t necessarily mean there are no options available.
The value and age of the judgment, the reason it arose and the wider financial position of the business can all be relevant.
Certain lenders have a greater appetite for adverse-credit applications than others.
This is one area where approaching appropriate lenders matters. Making applications to providers whose criteria do not accommodate the circumstances can result in unnecessary declines without moving the business any closer to securing funding.
At Revia, we can assess the position before considering which lenders within our network may be appropriate.
Does a Satisfied CCJ Make a Difference?
It can.
A satisfied CCJ shows that the underlying amount has subsequently been paid, although the judgment may continue to appear on the relevant register and credit records for a period of time.
Lenders can take the status and age of the CCJ into account when assessing an application.
If a CCJ arose several years ago, has since been satisfied and the company is now trading strongly, there may be lenders prepared to consider the current position of the business rather than assessing the application solely on its historic credit issues.
What Business Finance Could Be Available With a CCJ?
The appropriate funding structure will depend on the business and its circumstances.
Unsecured Business Finance
Unsecured funding may still be possible in some circumstances.
The lender will typically consider the company’s trading performance, affordability and overall credit profile alongside the CCJ.
Businesses with stronger recent financial performance or relatively minor historic adverse credit may have more options available.
Secured Business Finance
Where suitable assets or property are available, secured finance may provide another potential route.
Providing security can change the risk profile of a transaction and may give access to lenders or structures that would not otherwise be available.
Any asset offered as security can be at risk if the facility is not repaid, so the implications should always be properly understood.
Asset Finance
Where the requirement involves purchasing vehicles, machinery or equipment, asset finance may be worth considering.
Because the finance is structured around an identifiable asset, lenders may assess the application differently from a conventional unsecured business loan.
Eligibility will still depend on the lender, asset and wider circumstances.
Invoice Finance
Businesses selling to other businesses on credit terms may also be able to consider invoice finance.
Rather than relying exclusively on the company’s general credit profile, this type of facility is structured around eligible invoices and the company’s debtor book.
This can make it another avenue worth exploring where appropriate.
Will a Director’s Personal CCJ Affect Business Finance?
Potentially.
Even where finance is being taken out by a limited company, some lenders may consider the credit histories of its directors or shareholders as part of their underwriting process.
A personal CCJ therefore shouldn’t be hidden when exploring business finance.
Instead, providing the relevant information from the outset allows the circumstances to be considered properly and can help identify lenders whose criteria are more appropriate for the application.
How Long Does a CCJ Remain on Record?
In England and Wales, a CCJ will generally remain on the Register of Judgments, Orders and Fines for six years unless the full amount is paid within one month, in which case it can be removed from the register.
If it is paid after one month, it can be marked as satisfied but will generally remain on the register for the six-year period.
Businesses or directors unsure about the status of a judgment should establish the correct position before applying for finance.
Don’t Assume a CCJ Means No
One of the biggest mistakes a business can make is assuming that previous credit problems mean finance is no longer available.
A CCJ may reduce the number of lenders prepared to consider an application, affect pricing or change the type of facility available, but it does not necessarily close the market completely.
The important part is understanding the circumstances and approaching lenders with an appropriate appetite for the application.
Revia Can Help if You Have a CCJ
If you or your business has a CCJ and you’re looking for finance, speak to Revia.
We can look beyond the credit marker itself and understand the wider story behind the application — including your current trading position, funding requirement and the circumstances surrounding the CCJ.
From there, we can consider appropriate funding structures and identify lenders within our network that may be prepared to help.
Whether the CCJ is historic, satisfied or remains outstanding, there may still be options available.
A CCJ doesn’t automatically mean no. Revia can help you understand what funding options may still be available to your business.
