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Can you get another business loan if you already have one? Often, if both repayments fit

Can you get another business loan if you already have one? Often, yes. Lenders check whether the business can afford both repayments and what your first loan allows.

Reading time 5 min read

Category Business guides

Written by The bizbritain team

Yes, you can often get another business loan if you already have one. Lenders do not refuse a second loan just because a first one is running. What they ask is whether the business can afford both repayments together, and whether your first loan's terms allow more borrowing.

There are three ways to do it. You can ask your current lender for a top-up. You can take a second loan from a different lender. Or you can replace the old loan with one bigger loan that covers both needs.

Section 01

Can you get another business loan if you already have one?

Usually, yes. Many growing businesses carry more than one facility at a time. A van on hire purchase, an overdraft and a term loan for a new site is a common mix.

The question is not how many loans you have. It is whether the total is safe for the business to carry.

The Finance & Leasing Association raised this in October. According to the trade body, the risk comes when combined repayments become more than a business can sustain. It has asked lenders, brokers and policymakers to work together on the problem. Our news story on loan stacking explains the concern.

Section 02

Three routes to more borrowing

A top-up from your current lender
Your lender already knows your account and how you have repaid. That can make a top-up the quickest route. Some lenders add the new money to the existing loan. Others set up a separate facility alongside it.
A second loan from a different lender
A new lender will see your existing loan on your credit file and in your accounts. They will want to know what security the first lender holds. If the first lender has a charge over the business, the new lender may ask for its consent.
Refinancing both into one loan
You replace the old loan with a new, larger one. This can lower the monthly cost if the term is longer. Check for early repayment charges on the old loan first. Our guide on whether to refinance a business loan shows how to do the sum.

Section 03

What do lenders check before a second loan?

Three things come up on almost every application.

Affordability. The lender adds your existing repayments to the new one. Your profit needs to cover the total with room to spare.
Security and charges. A lender may already hold a charge over your business assets. A second lender will want to know where it would rank if things went wrong.
Your first loan agreement. Some agreements restrict new borrowing or new security without the lender's consent. Read the terms, or ask your lender, before you apply anywhere else.

Personal guarantees matter too. A personal guarantee is standard on most unsecured business loans above £25,000. If you signed one for your first loan, a second lender may ask for another. Count both before you agree.

Section 04

When is it better to wait?

Sometimes the stronger move is to wait a few months.

That is often true if the first loan is very new. Many lenders like to see several months of on-time repayments first. It is also true if your latest accounts show a dip that the next set will fix.

And be careful with applications in quick succession. Each formal application can mean a hard credit search. Several in a short period can make lenders more cautious.

Borrowing to cover an existing repayment is a warning sign. If that is the reason, talk to someone about the whole picture before you take on more.

Section 05

How to ask for more borrowing

Start with a clear list of what you already owe. Include each lender, the balance, the monthly payment and the end date. Add what the new money is for and what it should earn back.

A broker can look at your existing loans and the new request together, across a wider range of lenders. bizbritain works with a panel of 100+ lenders on business growth finance. You need at least 12 months of trading history. Two years is preferred for unsecured options.

You pay bizbritain nothing unless a lender on our panel issues an Agreement in Principle.

This guide is general information, not financial advice. Applications are subject to status, affordability and lender criteria.

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