Is there any obligation to proceed after receiving quotes or a DIP?
Updated October 2025
Short answer: You’re in control, and there’s usually no obligation to proceed
In most UK business finance scenarios, there is no obligation to proceed after receiving indicative quotes or a Decision in Principle (DIP). Both are typically non-binding and subject to full underwriting, due diligence, and final approval. You only take on a commitment when you accept a formal offer and sign the lender’s documentation, or when you instruct paid third-party work such as valuations or legal checks.
Why this matters for UK SMEs
Quotes and DIPs are designed to help you compare options without pressure. They give you a guide to potential cost, structure, and eligibility before you commit. That means you can explore alternatives and walk away if it’s not right for your cash flow or goals.
Best Business Loans: how we help
BestBusinessLoans.ai is an independent introducer using AI to match established UK companies with suitable lenders and brokers. We do not supply loans and we do not charge you to submit an enquiry. You stay in control at every stage.
What a quote and a DIP actually mean
Quotes: indicative, not binding
An initial quote is usually based on the information you provide and lender criteria at that time. It is indicative and subject to status, documents, and underwriting checks. Lenders can adjust pricing or terms if the verified facts differ from your initial details.
DIP (Decision in Principle): conditional approval
A DIP (sometimes called an Agreement in Principle or Heads of Terms) signals that your business appears eligible in principle. It is conditional and not a guarantee of funding. A DIP can change or be withdrawn if new information arises during underwriting.
Typical conditions attached
- Proof of trading, accounts, bank statements, and management information
- Credit assessment on the business and, where relevant, directors
- Asset verification, valuations, or audits for asset or invoice finance
- Compliance checks, KYC/AML, and legal due diligence
Until a formal offer is issued and accepted, you are not obliged to proceed. Lenders often set validity periods for quotes or DIPs, after which they may require refreshed information.
When obligations or costs can arise
Accepting a formal offer creates commitments
Once you sign the lender’s formal offer and associated documents, you enter into a binding agreement. The offer sets out covenants, fees, security, and ongoing information requirements. Read the terms carefully and ask questions before signing.
Third-party fees and non-refundable costs
Certain checks may incur costs even before a final offer is signed. Common examples include valuations, site inspections, legal fees, or audits. These are typically non-refundable once instructed, even if you decide not to proceed.
Broker mandates and arrangement fees
Some brokers use mandate or engagement letters that set out their role and any payable fees. Clarify whether broker fees apply only on drawdown or at offer stage. Ask for transparency on fees, timing, and refund policies in writing.
- Check if an arrangement fee is charged by the lender on completion
- Confirm any documentation or acceptance fees and when they become due
- Ask whether a valuation is required and who pays
Business finance is often not covered by consumer cooling-off rules. Always confirm your cancellation rights and fee triggers up front.
Credit searches, eligibility, and protecting your position
Soft vs hard searches
Many lenders or brokers run a soft search to generate a quote or DIP. Soft searches do not impact your credit score. Some providers may need to run a hard search before issuing a formal offer.
Minimising impact while comparing options
Tell providers you are in the research stage and ask if they can assess you with a soft search first. Avoid making multiple full applications at once. Use a controlled process to compare terms side by side.
What to check in a DIP or quote
- Indicative rate, fees, repayment profile, and total cost of credit
- Security requested (personal guarantees, debentures, asset charges)
- Financial covenants or information undertakings
- Expiry date of the quote or DIP and next steps
Best Business Loans helps you short-list suitable routes without committing. You can review options and only proceed when you are comfortable with the costs, structure, and safeguards.
Sector nuance: engineering, manufacturing, and asset-heavy firms
Asset finance and refinance can suit businesses with machinery, vehicles, or equipment. Lenders may require valuations or asset schedules before a formal offer. Explore sector-focused routes such as our page on engineering business loans for practical guidance.
Practical steps if you receive quotes or a DIP
How to compare offers without obligation
- Confirm whether the quote or DIP used a soft or hard credit search.
- Request a written breakdown of all fees, including any broker or third-party costs.
- Check security requirements and the implications for directors.
- Stress-test the repayment profile against your cash flow.
- Ask what could change the price or remove approval.
When you might walk away
Walk away if pricing, covenants, or security is outside your risk appetite. Step back if costs escalate beyond the initial indication. Decline if due diligence reveals hidden fees or restrictive terms.
When proceeding can make sense
Proceed when the facility aligns with your growth plan, cash cycle, and margins. Proceed if fees are fair and transparency is complete. Proceed when the lender’s sector knowledge and service standards meet your expectations.
With BestBusinessLoans.ai, submitting a Quick Quote is free and carries no obligation. We introduce you to suitable lenders or brokers, then you decide if and when to move forward.
Compliance-first approach
We aim to ensure information is clear, fair, and not misleading. All quotes and DIPs are subject to status, credit approval, and change. We do not guarantee the lowest rate or approval, and we are not a lender.
FAQs, key takeaways, and your next step
FAQs
Am I obliged to take a loan after receiving a quote?
No, quotes are indicative and non-binding. You can decline without penalty unless you have triggered a paid service such as a valuation. Always check any broker mandate for fee terms.
Does a Decision in Principle mean I’m approved?
A DIP is conditional approval, not a final offer. It can change after underwriting, due diligence, or if your information changes. Funding is only committed when a formal offer is signed.
Can a DIP be withdrawn?
Yes, if risk changes or eligibility criteria are no longer met. This may include adverse credit events, weak financials, or valuation shortfalls. The lender should explain the reason if this happens.
Will getting multiple quotes harm my credit score?
Soft searches should not impact your score. Multiple hard searches in a short period may have an effect. Ask providers to use soft checks while you compare.
What fees might I incur before completion?
Possible non-refundable fees include valuations, site inspections, and legal costs. Broker fees may apply depending on your agreement. Clarify fee triggers in writing before instructing work.
Key takeaways
- There is usually no obligation to proceed after a quote or DIP.
- Costs can arise if you instruct valuations, legal work, or sign a broker mandate.
- A DIP is conditional and not a guarantee of funding.
- Protect your position with soft searches and clear fee confirmation.
- Only a signed formal offer creates a binding commitment.
How Best Business Loans supports your decision
Our AI matching helps established UK businesses identify suitable funding providers quickly. We save you time by introducing lenders and brokers active in your sector. You remain in full control, with no obligation to proceed.
Start with a free, no-obligation eligibility check
Submit a Quick Quote to see potential routes for cash flow, asset finance, equipment, vehicles, or invoice finance. Compare non-binding indications before you commit. Make a confident choice that fits your business model.
Important information and fair-promotion principles
Information on this page is general and not advice. Quotes and DIPs are subject to change, status, and underwriting by the provider. We follow “clear, fair and not misleading” principles aligned with FCA guidance, ASA rules, and Google’s financial services policies.
Best Business Loans operates as an independent introducer in the UK. We do not currently support start-ups, sole traders, franchises, property finance, or commercial mortgages. Your data is handled securely and shared only with relevant finance professionals connected to your enquiry.
How our AI matching works
- Complete a Quick Quote form in minutes with your funding need and business details.
- Our AI analyses your profile and identifies suitable provider matches.
- We introduce you to lenders or brokers who may be able to help.
- You review options and decide if you want to proceed, with no obligation.
Ready to explore your options with no commitment? Get your free Quick Quote and see what’s possible for your business today.