What happens after I receive an indicative Decision in Principle—what are the next steps?
Short answer: An indicative Decision in Principle (DIP) is a conditional “green light” based on the information you’ve provided so far, not a binding offer. The next steps are to share documents for verification, complete underwriting and credit checks, review any conditions, and then accept and sign your final offer before funds are released. Best Business Loans helps you navigate each stage by matching you with suitable lenders or brokers and preparing you for what to expect.
Updated: October 2025
The short version—your journey from indicative DIP to drawdown
Step-by-step overview you can expect
- Confirm your details. The lender or broker checks that the numbers, purpose of funding, and business details match your Quick Quote and DIP.
- Provide documents. You supply financial statements, bank statements, ID and any sector-specific information the underwriter needs.
- Underwriting and checks. Verification, affordability analysis, credit searches, and—if relevant—asset valuations or site visits.
- Receive a formal offer. You get a binding offer or facility letter with finalised terms, rates, fees, and conditions precedent to funding.
- Sign and complete. Sign the agreements, satisfy any conditions, and arrange for funds to be released to you or your suppliers.
What an indicative Decision in Principle actually means
An indicative DIP signals that—based on your initial information—you are likely to meet a provider’s basic criteria. It is not an approval or a guarantee of funding. Final terms depend on full underwriting, and your rate, amount, or structure may change once documents are reviewed.
Why providers need more detail after a DIP
Lenders must confirm affordability, verify identity, and assess risk before offering funds. Additional checks help them tailor a suitable structure, such as term length, repayments, or security. This protects both your business and the lender and aims to ensure the finance supports your goals sustainably.
What lenders typically check after an indicative DIP
Verification and affordability—what is examined
Underwriters test whether your business can comfortably service the repayments across realistic scenarios. They look at turnover trends, margins, cash flow cycles, existing debts, and debtor quality if relevant. They will also check that the intended use of funds is clear and aligned to your sector and strategy.
Credit searches—soft checks vs hard searches
Before the DIP, many providers run a soft search that does not affect your score. As you progress to full underwriting, a hard search may be required on the business and—where relevant—on directors or shareholders. The timing of hard checks varies; your broker or lender should tell you before it happens.
Personal guarantees and security—when and why they apply
Some facilities require a personal guarantee (PG), debenture, or asset-backed security. The need for security depends on facility type, loan size, credit strength, and sector risk. If a PG is requested, you should consider independent legal advice before signing.
Additional risk reviews you might encounter
For asset and equipment finance, valuations or supplier quotes confirm the asset’s value and suitability. For invoice finance, verification may include debtor concentrations, aging profiles, and sample audits. For vehicle or fleet finance, the underwriter may review usage, mileage, and fleet management records.
Documents you will usually need and typical timelines
Core documents checklist
- Last 6–12 months of business bank statements in full PDF format.
- Latest full year accounts and up-to-date management accounts.
- Proof of identity and address for directors and shareholders.
- VAT returns or HMRC summaries where relevant.
- Existing finance schedules and any refinancing details.
- Quotes or invoices for assets, equipment, or refurbishments.
- Debtor ledger and aged receivables for invoice finance.
Sector-specific extras
Some industries have unique information requirements, such as seasonal forecasts, contracts, or compliance documents. For example, agriculture firms may be asked for evidence of subsidies, herd numbers, or crop cycles if funding is tied to production. Learn more in our guide to agriculture business loans.
How long each stage can take
- Document gathering: 1–5 working days, faster if your records are organised.
- Underwriting and credit checks: 1–7 working days, depending on complexity and lender capacity.
- Valuations or audits: 2–10 working days for assets or debtor reviews.
- Offer to drawdown: 1–5 working days after conditions are met and documents are signed.
What speeds things up
Prompt, accurate documentation and clear communication can significantly reduce timelines. Align your requested funding with demonstrable use of funds and repayment capacity. Where a PG or legal document is required, scheduling independent advice early can prevent delays.
Costs, conditions, and what can change before final approval
Indicative vs final rates and fees
Indicative pricing is a guide based on limited information. Final pricing reflects verified risk, security, and the chosen structure after underwriting. You may see adjustments to interest rate, arrangement fees, security requirements, or covenants once the underwriter completes their review.
Common reasons a DIP changes or is withdrawn
- New information: Accounts or bank statements differ materially from the initial summary.
- Credit findings: Recent adverse items, CCJs, or unsatisfied liabilities appear.
- Affordability: Cash flow pressure is higher than expected once commitments are verified.
- Security shortfall: Assets value lower than assumed or unavailable as security.
- Policy fit: Sector, purpose, or loan size falls outside the lender’s updated criteria.
Conditions you may need to satisfy
Conditions precedent may include settling an existing facility, providing landlord consent for fit-outs, or confirming insurance. For assets, proof of installation or delivery may be required before drawdown. For invoice finance, you may need to notify debtors or sign trust account arrangements.
How to maintain momentum and reduce risk
- Share complete and accurate data from the outset to avoid rework.
- Keep business tax filings and management accounts up to date.
- Prepare explanations for anomalies such as one-off costs or seasonal troughs.
- Stay reachable to approve valuations, legal steps, or PGs quickly.
- Be open to alternative structures if the original plan is not feasible.
How Best Business Loans helps you progress with confidence
Our role as an independent introducer
Best Business Loans does not lend or provide regulated advice. We use AI matching and a network of lenders and brokers to connect you with relevant providers based on your business profile. You stay in control, and there is no obligation to proceed.
What you can do now
If you have an indicative DIP, move promptly to document submission and underwriting. If you are pre-DIP, complete a Quick Quote to check your likely eligibility and route. Our platform saves you time by matching you with providers who are active in your sector and funding type.
Frequently asked questions
Is an indicative DIP a guarantee of funding?
No. It is a conditional indication subject to underwriting, credit checks, and verification. Final terms may change.
Will getting a final offer affect my credit score?
A hard search may be required and can affect credit scores. Providers should tell you before a hard search is conducted.
Can I change the amount after receiving an indicative DIP?
Often yes, but changing the amount can trigger reassessment of affordability and risk. That can alter terms and timelines.
How long does it take to move from DIP to drawdown?
Simple cases may complete in a few days once documents are ready. Complex cases with valuations or legal steps can take several weeks.
What fees should I expect?
Typical fees can include arrangement fees, documentation fees, valuation costs, and interest. Always read your offer letter in full.
Do you charge me for using Best Business Loans?
Submitting a Quick Quote is free and without obligation. We may receive a commission from the provider if you proceed.
Do you cover start-ups or property finance?
No. We currently focus on established UK trading businesses and do not support start-ups or property finance.
Key takeaways
- An indicative DIP is conditional and not a binding offer.
- Next steps include documents, underwriting, credit checks, and conditions.
- Final rates and terms can change after full assessment.
- Be prepared with bank statements, accounts, IDs, and purpose evidence.
- Best Business Loans matches you to suitable providers to speed things up.
Important information and compliance
Best Business Loans operates as an independent introducer and does not provide loans or regulated financial advice. Any figures or timescales are illustrative and subject to underwriting, affordability, and provider criteria. Financial promotions should be clear, fair and not misleading; please ensure you understand costs and risks before committing.
Providers may conduct soft and hard credit searches and may require security or personal guarantees. You should consider taking independent legal and financial advice before entering any agreement. All lending is subject to status, and terms and availability can change.
How we help you take the next step
Ready to move forward after your DIP or want an eligibility check first? Complete our Quick Quote and we’ll connect you with providers aligned to your sector, funding purpose, and risk profile. It’s fast, secure, and free to enquire.