What happens after I receive an eligibility check or Decision in Principle?
The short answer, and what a DIP actually means
An eligibility check or Decision in Principle (DIP) means a lender or broker believes you may qualify for finance based on the information provided so far. It is not a formal offer, and final approval depends on underwriting, documents, affordability, and credit checks.
Eligibility check vs Decision in Principle: what’s the difference?
An eligibility check is a preliminary assessment that indicates the types of funding you could qualify for and the providers most likely to help. A Decision in Principle is a more formal statement that, subject to verification and underwriting, a lender is prepared to lend in principle.
Both are conditional and can change once evidence is reviewed. They are helpful signposts, not guarantees.
Soft vs hard searches: will this affect my credit score?
Many eligibility checks use a soft search that doesn’t impact your credit score. A DIP can involve a soft search or a hard credit search depending on the provider and product.
Hard searches leave a footprint on your credit file and may affect your score temporarily. You can ask in advance which type of check will be used.
What lenders are looking for at this stage
Lenders want to confirm your identity, trading history, revenue profile, liabilities, and the purpose of the finance. They will also look at affordability, cash flow resilience, and any security available.
If you’re seeking asset finance or invoice finance, they will also review the quality and value of the assets or debtor book. For unsecured options, personal guarantees may be requested.
Typical validity and why offers can change
A DIP is usually time-limited, often valid for 30 to 90 days, though this varies by lender. If your business performance changes, or a new liability appears, the DIP may be updated or withdrawn.
Rates, fees, and terms can also change if the risk assessment shifts or if market conditions move. Treat a DIP as a snapshot based on today’s information.
How Best Business Loans fits in
BestBusinessLoans.ai doesn’t lend money or give financial advice. We use AI-led matching to introduce you to relevant lenders and brokers who are active in your sector.
After you receive an eligibility check or DIP, we help coordinate next steps, highlight likely documentation, and connect you with professionals who can progress your application. You remain in control throughout.
What happens next: the step-by-step journey to a final offer
Your typical path from DIP to funds
- Confirm details: You or your broker confirm the loan amount, purpose, and structure that best fits your cash flow.
- Document request: Expect a checklist covering financials, ID, and business information.
- Underwriting review: The lender verifies facts, tests affordability, and assesses risk.
- Valuations or audits: For asset or invoice finance, assets or debtors may be inspected.
- Credit and compliance checks: These can be soft or hard searches, plus KYC and AML checks.
- Conditional offer: You receive a formal proposal with rates, fees, and conditions to meet.
- Final offer and signing: Once conditions are met, the lender issues documents for signing and funds are released.
Underwriting starts with your numbers
Underwriters test your recent trading performance against the requested facility. They will compare bank statements, management accounts, and liabilities to ensure repayments are realistic.
Expect questions about seasonality, one-off costs, and material changes in the pipeline. Fast, clear answers reduce delays.
Timescales: how long does it take?
For straightforward unsecured working capital, you may move from DIP to funding in days once documents are in. Asset finance and invoice finance can be rapid too, often within one to two weeks.
Complex facilities, multi-asset deals, or debenture-backed lending can take longer. Timescales depend on document readiness and how quickly conditions are satisfied.
Common causes of delay (and how to avoid them)
- Missing bank statements or management accounts.
- Unreconciled accounting entries or out-of-date VAT filings.
- Unclear director shareholdings or incomplete ID/AML documents.
- Unvalued or uninspected assets for asset-backed deals.
Prepare ahead by organising six to 12 months of bank statements, current management accounts, a debtor and creditor summary, and ID for all directors. Keep your Companies House filings up to date.
Negotiating your terms
Once a conditional offer lands, you can query rates, fees, and covenants. If you have multiple offers, compare repayment profiles and total cost of finance, not just the APR.
Factor in any early settlement terms, seasonal payment options, and security requirements. The “best” offer is the one that fits your cash flow and risk appetite.
Documents, affordability, and security: what lenders verify
What documents will I be asked for?
- Business bank statements (typically 6–12 months).
- Latest full-year statutory accounts and recent management accounts.
- VAT returns and up-to-date HMRC position, if applicable.
- Proof of ID and address for directors, and company information from Companies House.
- Asset schedule or invoices ledger if applying for asset or invoice finance.
- Existing finance agreements and a liabilities statement.
- Business plan or use-of-funds summary for growth or refurbishment projects.
Provide documents in clear, readable formats, ideally PDF exports direct from your bank and accounting system. Consistency between documents speeds up approval.
How affordability is assessed
Lenders assess affordability using your average monthly inflows, outflows, and seasonality. They look at EBITDA, debt service cover, and surplus cash after fixed costs.
Expect scrutiny on large or irregular transactions. Be ready to explain one-offs, contract changes, and pipeline revenue.
Security and guarantees
Unsecured loans may require a personal guarantee from directors, and potentially a debenture over the business for larger facilities. Asset finance is typically secured on the asset being funded.
Invoice finance is secured against receivables, with concentration and debtor quality limits. Security improves risk for the lender and can lower the cost of finance.
Why DIP terms can change at the offer stage
If your bank statements show higher volatility or additional commitments, the lender may adjust rates, limits, or covenants. If assets value lower than expected, the advance amount may reduce.
Conversely, strong trading or added security can improve terms. Transparency helps lenders shape an appropriate structure rather than withdraw.
Soft checks turning to hard checks
Some providers only apply a hard search at the final offer stage. This is normal and helps confirm the assessed risk.
Ask when a hard search will occur and how many will be run across a panel. Minimising unnecessary hard searches is good practice.
Outcomes, alternatives, and how Best Business Loans helps
Three typical outcomes after underwriting
Approved: You receive a formal offer with rates, fees, and terms, and can proceed to signing. Conditional approval: You get an offer subject to conditions like updated accounts, PGs, or insurance.
Declined: The lender outlines the reasons so you can adjust your strategy. A decline with one lender does not mean every lender will decline.
If you’re declined, what next?
We can help re-match your case to different providers with alternative criteria or facility types. Sometimes changing the facility type solves the problem, for example moving from unsecured to asset-backed.
Improving documentation, addressing overdue taxes, or reducing facility size can make a difference. Timing matters if you are mid-season or mid-contract.
Comparing offers beyond the headline rate
Compare total cost, fees, repayment flexibility, covenants, and security. Consider the impact of fixed versus variable payments on cash flow.
For cyclical businesses, a seasonal repayment profile may be worth a slightly higher rate. The right facility is the one you can sustain comfortably.
How BestBusinessLoans.ai supports you
We connect established UK businesses with lenders and brokers best aligned to your sector, purpose, and profile. Our platform streamlines early steps and reduces shotgun applications.
We don’t supply loans or give regulated advice, and there’s no obligation to proceed. You stay in control of every decision and who sees your details.
Sector context matters
Lenders look favourably on clear sector performance metrics, like table turns in restaurants, utilisation in logistics, or job margin in construction. Tailoring your case to sector norms strengthens outcomes.
If you run a manufacturer, wholesaler, or hospitality business handling perishable stock, you may benefit from facilities built for trading volatility. Explore our sector insight on food industry loans to understand typical funding approaches for producers, processors, and hospitality operators.
FAQs, key takeaways, and next steps
Frequently asked questions
Does a DIP guarantee I’ll get the money? No, a DIP is conditional and subject to underwriting and verification. It indicates you may qualify but it is not a binding offer.
Will my credit score be affected? Eligibility checks often use soft searches that don’t affect your score. Some providers will use a hard search at offer stage.
How long is a DIP valid? Many are valid for 30–90 days, but the period varies by provider. Always check the validity window on your document.
What can change my terms between DIP and offer? Variances in bank activity, liabilities, debtor quality, asset values, or market rates can change the outcome. Clear, up-to-date documents help keep terms stable.
Can I apply to multiple lenders at once? Yes, but manage hard searches carefully and keep information consistent. Comparing options can improve your final decision.
What if my business is seasonal? Tell the lender early and request a repayment profile that fits your cycle. Seasonal structures can reduce cash-flow stress.
Do you support start-ups? Best Business Loans focuses on established UK businesses. We don’t currently support start-ups, sole traders, franchises, property finance, or commercial mortgages.
Key takeaways
- An eligibility check or DIP is a helpful signpost, not a guarantee.
- Final approval depends on underwriting, documents, affordability, and credit checks.
- Be document-ready to avoid delays and keep terms stable.
- Compare total cost, structure, and flexibility — not just the rate.
- We introduce you to relevant lenders and brokers so you can choose with confidence.
Next steps: check your options in minutes
Ready to move from DIP to decision with clarity and control. Complete a Quick Quote and our platform will match you to suitable lenders and brokers.
You’ll see the types of facilities likely to fit, and what documents to prepare. There’s no obligation to proceed and your details are handled securely and confidentially.
Get Your Free Quick Quote Now and let Best Business Loans help you take the next step.
Important information and fair, clear, not misleading
BestBusinessLoans.ai is an independent introducer and does not provide loans or financial advice. Information on this page is for general guidance only and does not constitute advice.
All finance is subject to status, affordability checks, credit checks, and lender criteria. Terms, rates, and amounts may change after underwriting, security assessments, and market movements.
Security and personal guarantees may be required. Non-payment can affect your credit rating and your business assets may be at risk.
Transparency and compliance
We aim to ensure our content and introductions are fair, clear, and not misleading in line with UK expectations for financial promotions. Where we introduce you to a provider, we may receive a commission from that provider, which will not change the amount you pay.
If you are unsure about the suitability of a product, consider seeking independent financial advice. For more on responsible finance and approvals, see the Financial Conduct Authority and the British Business Bank.
Updated October 2025