Can I Get a Business Loan with an IVA: A UK Guide for 2026 

Yes, you can get a business loan while in an IVA, but it isn’t easy. Most mainstream UK lenders automatically decline applications from anyone in an active Individual Voluntary Arrangement, since it signals past repayment difficulty and puts you in a higher-risk category. That said, approval isn’t impossible. Secured loans, asset finance, invoice finance, and guarantor-backed lending are sometimes accessible, usually with written permission from your IVA supervisor and through specialist lenders who work with higher-risk borrowers.

If you’re trying to keep your business moving while managing an IVA, it helps to know exactly which types of finance are realistic, which ones will almost certainly be rejected, and how your business structure changes your odds. This guide walks through all of that, plus the permission rules you’ll need to follow and practical alternatives if borrowing isn’t the right move for you right now. 

Why Most Lenders Say No for Business Loan with an IVA?

Once you’re in an IVA, most high street banks and mainstream lenders won’t consider your business loan application at all. From a lender’s perspective, an IVA is a clear signal that you’ve already struggled to manage debt under normal terms, and that makes you a much harder risk to underwrite.

The main reasons lenders reject IVA applicants include:

• High risk profile. An IVA shows a history of repayment difficulty, which makes lenders cautious about lending further
• Poor credit score. Your credit file is typically marked and heavily affected for the duration of the IVA
• Borrowing restrictions. Most IVA agreements limit how much you can take on without your supervisor’s approval
• Affordability concerns. Lenders worry new repayments could conflict with your existing IVA payments and increase the risk of default

Because of this, applying to a mainstream lender while in an active IVA is likely to result in an automatic rejection, regardless of how strong your business case is. 

When It May Still Be Possible

Even though most lenders say no, a business loan isn’t completely off the table while you’re in an IVA. Approval usually comes down to reducing the lender’s risk and having the right permissions in place before you apply.

You may still be able to access finance if:

• The loan is secured against an asset, such as property or business equipment
• A guarantor with a strong credit history is willing to back the loan
• The finance is asset-based, such as equipment finance or invoice finance
• Your IVA supervisor has given written permission for the borrowing
• You apply through a specialist lender who works with higher-risk or IVA borrowers

Even when one or more of these apply, approval still isn’t guaranteed, and the interest rates offered are usually higher than standard business lending. Always speak to your IVA provider before applying, so borrowing doesn’t put your arrangement at risk. 

Types of Business Loans You May Still Access With an IVA

Although options are limited, some types of business finance remain realistic even with an active IVA. These are usually offered by specialist or alternative lenders rather than high street banks.

1. Secured Business Loans: Backed by an asset such as property, a vehicle, or equipment. The added security can improve your approval odds, but the asset is at risk if repayments are missed.
2. Guarantor Business Loans: A guarantor with strong credit and stable income agrees to cover repayments if you can’t. This can improve approval chances but shifts financial responsibility onto someone else.
3. Asset Finance and Equipment Finance: Linked to a specific business asset, like machinery or vehicles. Because the asset itself acts as security, lenders may be more flexible even with an IVA on file.
4. Invoice Finance: Lets you borrow against unpaid customer invoices. Approval often depends more on your customers’ ability to pay than your personal credit history.
5. Merchant Cash Advances: Available to businesses taking card payments. Repayments are taken as a percentage of daily sales, though costs can be high.

In most cases, you’ll still need your IVA supervisor’s approval before proceeding. 

Business Loans That Are Usually Not Available with an IVA

While some finance options remain open, many common types of business borrowing are effectively off-limits during an active IVA. These are typically offered by mainstream lenders with strict credit checks and low tolerance for risk.

• High Street Bank Loans: Banks almost always decline applications from borrowers with an active IVA, as it’s treated as a high-risk factor
• Unsecured Business Loans: Without security to fall back on, lenders rely heavily on credit history and affordability, which an IVA undermines
• Start-Up Loans: Government-backed and private start-up schemes usually require a clean or stable credit record
• Business Overdrafts: Assessed the same way as unsecured credit, so most lenders won’t offer or extend one during an IVA
• Peer-to-Peer Business Loans: Many P2P platforms exclude IVA borrowers due to investor risk and platform lending rules

Applying for these anyway can lead to repeated rejections, which may further damage your credit file. Therefore, it’s worth ruling them out early and focusing on the options covered in the previous section.

Sole Trader vs. Limited Company Directors: How Structure Affects Approval

Whether you trade as a sole trader or run a limited company changes how much your IVA affects your chances of getting a business loan.

• Sole Traders: Your personal and business finances are treated as one and the same. Since your IVA sits on your personal credit file, lenders assess your business loan application against that same record, meaning high street banks and mainstream lenders are very likely to reject you outright.
• Limited Company Directors: Your company has its own separate credit file, so it may still be able to access certain finance, such as asset-based lending or invoice finance, even while you’re personally in an IVA. However, if the lender requires a personal guarantee (common for smaller or newer companies), your IVA comes back into the picture, and you’ll be assessed as a higher-risk applicant.

Here’s how the two structures compare at a glance:  

	Sole Trader	Limited Company Director
Credit file used	Personal (shows IVA)	Company (separate from personal)
Mainstream lender odds	Very low	Possible, depending on lender
Best-fit finance	Secured, guarantor, asset-based	Asset-based, invoice finance
Personal guarantee risk	N/A, already personal	Reintroduces IVA into the assessment

Either way, lenders will usually check both personal and business credit files where relevant. So it’s important to know which one carries more weight for your situation before you apply. 

Do You Need Permission from Your IVA Supervisor?

Yes. In almost every case, you’ll need written permission from your IVA supervisor before taking out a business loan. This applies even if the lender itself doesn’t ask about your IVA status. Most arrangements include a borrowing limit, often around £500, above which you can’t take on new credit without approval.

This isn’t just a formality. Your supervisor’s job is to check that any new repayments are genuinely affordable alongside your existing IVA payments, so the arrangement isn’t put at risk. Skipping this step, even with good intentions, can have serious consequences:

• Breach of your IVA: Unapproved borrowing can be treated as a breach of the agreement
• Full debt demands: If your IVA is terminated as a result, creditors can demand the original debt in full
• Legal and financial fallout: You could face additional fees, court action, or further damage to your credit record

Before you apply anywhere, speak to your supervisor first. It’s the quickest way to find out what’s realistically available to you, and it protects the progress you’ve already made.    

Tips to Improve Your Chances of Approval 

Getting approved for a business loan while in an IVA is difficult, but a few practical steps can improve your odds:

• Consult your Insolvency Practitioner first. Discuss any borrowing plans before you apply. They can confirm whether it’s allowed under your IVA and provide written approval, which most lenders will ask for.
• Choose the right type of finance. Secured loans, asset finance, and invoice finance are generally more accessible than unsecured lending, so start there rather than applying to mainstream lenders.
• Prepare strong business accounts. Clear, accurate records of income, expenses, and cash flow, along with a solid business plan, show lenders your business is stable enough to support repayments.
• Reduce risk for the lender. Offering collateral, bringing in a guarantor, or demonstrating consistent cash flow all make you a safer bet in a lender’s eyes.
• Work with specialist lenders. Some lenders focus specifically on borrowers with past financial difficulties or active IVAs, and are more likely to offer realistic terms than a high street bank.

Following these steps won’t guarantee approval, but it puts you in the best possible position while staying compliant with your IVA. 

Common Mistakes to Avoid When Applying for Business Loan with an IVA

A few missteps can cost you approval, or worse, put your IVA at risk. Here’s what to avoid:

• Applying to multiple lenders at once. Submitting several applications in a short space of time leaves multiple footprints on your credit file, making you look higher-risk to each lender reviewing it.
• Hiding your IVA status. Lenders carry out thorough checks, and being dishonest about an active IVA can lead to instant rejection, legal issues, or even allegations of fraud.
• Taking high-interest short-term loans. These can seem like a quick fix, but the high costs often clash with your IVA payments and increase the risk of default.

Avoiding these mistakes protects both your credit file and your IVA, and keeps you on solid ground while you look for the right finance option. 

Are There Alternatives to Business Loans While in an IVA?

Yes. If borrowing feels too risky or isn’t available to you right now, there are several ways to fund your business without putting your IVA at risk:

• Business grants. Some grants are available for small businesses and start-ups. Unlike loans, they don’t need to be repaid, making them a safe option while you’re in an IVA. Check local councils, government schemes, and industry-specific programmes.
• Invoice finance. As covered earlier, this lets you borrow against unpaid invoices, with approval based more on your customers’ creditworthiness than your own credit history.
• Crowdfunding. Platforms that let you raise funds from the public or your community don’t create debt, so they won’t affect your IVA.
• Personal savings or family support. Using your own savings or getting help from family can provide short-term funding without involving a lender at all.
• Improving cash flow. Reviewing expenses, negotiating better terms with suppliers, and speeding up invoicing can reduce how much external finance you need in the first place.

These options are often simpler and lower-risk than taking on new debt while your IVA is active.  

Not Sure Borrowing Is the Right Move?

Weighing up a business loan while managing an IVA isn’t always simple, and sometimes the better question is whether your current arrangement still fits your situation. If you’re unsure, or your IVA payments feel harder to manage than they used to, our professional debt advisors can talk you through your options with no obligation.

[Important Note: For additional independent guidance, you can also access free resources from MoneyHelper, the UK’s official platform for managing debt and finances.]   

Conclusion

Getting a business loan while in an IVA is difficult, but not impossible. Mainstream lenders will almost always turn you down, but secured loans, asset finance, invoice finance, and guarantor-backed lending remain realistic options, provided you have your IVA supervisor’s permission and are willing to work with specialist lenders.

Your business structure matters too. Sole traders face tighter restrictions since their personal and business finances are treated as one, while limited company directors have more room to manoeuvre, unless a personal guarantee is required.

Whatever route you’re considering, don’t skip the basics: get permission before you borrow, avoid applying to multiple lenders at once, never hide your IVA status, and steer clear of high-interest short-term credit. If borrowing isn’t the right fit, alternatives like grants, invoice finance, crowdfunding, or simply tightening up your cash flow can keep your business moving without adding risk.

The safest approach is always the same, speak to your IVA supervisor before you make any borrowing decisions. They can tell you what’s genuinely realistic for your situation and help you avoid putting your IVA, and your business, at risk. 

Key Takeaways

• Getting a business loan while in an IVA is possible, but most mainstream lenders will automatically reject your application.
• An IVA signals past repayment difficulty, which makes lenders view you as a high-risk borrower.
• Secured loans, asset finance, invoice finance, guarantor loans, and merchant cash advances remain the most realistic options.
• High street bank loans, unsecured loans, start-up loans, overdrafts, and peer-to-peer loans are usually off-limits during an active IVA.
• Sole traders face greater difficulty than limited company directors, since their personal and business finances are treated as one.
• A personal guarantee on a company loan reintroduces your IVA into the lender’s risk assessment.
• You’ll almost always need written permission from your IVA supervisor before taking out new borrowing above roughly £500.
• Borrowing without your supervisor’s approval can breach your IVA and lead to serious financial and legal consequences.
• Preparing strong business accounts, reducing lender risk, and working with specialist lenders can meaningfully improve your approval odds.
• Alternatives such as business grants, crowdfunding, personal savings, and improving cash flow can help you avoid borrowing altogether. 

FAQs

What's the difference between IVA and CVA for business loans?

An IVA is a personal debt solution affecting your individual credit file, while a CVA (Company Voluntary Arrangement) restructures a company's debts directly. A personal IVA may only affect lending through personal guarantees, whereas a CVA signals higher risk directly on the business's credit file.

Which lenders accept IVA borrowers for business loans?

Mainstream banks rarely will. Your best chances are with specialist or alternative lenders who work with higher-risk borrowers, particularly for secured loans, asset finance, or invoice finance. Approval still typically requires written permission from your IVA supervisor before you apply.

Will my IVA affect business loan interest rates?

Yes. Lenders who do approve borrowing during an IVA typically charge higher interest rates to offset the added risk. Rates vary by lender and loan type, so it's worth comparing specialist lenders rather than assuming the first offer you receive is the best available.