Borrowing across a group: which entity should actually apply
In a group of companies, which entity signs for a facility matters beyond who holds the main bank relationship. It affects whose assets sit behind any security, how the debt shows on which set of accounts, and whether another group company needs to guarantee it for the numbers to work for a lender.
What to get straight before applying
The information a lender actually wants
A simple chart of the group, which entities exist, how they connect, and where any existing facilities or security sit, tends to move an application faster than trying to explain the structure in prose partway through underwriting.
FAQs
Should the parent company or the trading subsidiary apply?
Usually whichever entity holds the trading activity, the assets or the cash flow the lender is actually assessing, not automatically the parent. Applying from the wrong entity in the group is one of the more common reasons a straightforward request takes longer than it should.
Does a lender need to see the whole group structure?
Generally yes, at least a simple chart of which entities exist, how they're connected, and where any existing facilities or security already sit. Without it, a lender can't tell whether it's looking at the full picture or one piece of a larger one.
Will a guarantee from another group company be needed?
Often, particularly if the trading entity applying is newer or smaller than others in the group. A cross-guarantee lets a lender take comfort from the group's overall strength rather than just the applying entity's own file.
What if group companies have different year-ends or account for things differently?
Worth flagging upfront rather than leaving a lender to work it out. Mismatched reporting periods or inconsistent treatment across entities is a common source of delay once an application is already underway.
Tell us about your group structure and we'll route to the right conversation: eligibility checker. Limited companies, LLPs and partnerships of 4+ only.