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Can a dormant company borrow?
A dormant company has no trading history, no bank activity, and no accounts showing income — so lenders have nothing to assess. In practice, a dormant company cannot borrow. This guide explains why, and the five steps to reactivate a dormant company so it can borrow once it starts trading.
What dormancy means — and why it blocks lending
A dormant company still exists legally at Companies House. It has a company number, it files accounts (dormant company accounts), and it may still have directors and shareholders. What it does not have is any trading activity.
Lenders assess affordability from two sources: business bank statements (showing cash flow from trading) and filed accounts (showing profit or loss from operations). A dormant company has neither. There is no transaction history, no income, and no financial track record to assess. This makes it unlendable, not because of a policy choice, but because there is simply nothing to base a lending decision on.
The path to borrowing runs through reactivation: start trading, build a statement history, file accounts, and then apply once the financial record exists.
Five steps to reactivate and become lendable
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Notify HMRC that the company has restarted trading
If the company was previously dormant for HMRC purposes, notify HMRC of the date trading restarted. This is done online via the Government Gateway. HMRC will set up a corporation tax record and issue a reference. Failure to notify within three months of restarting carries a penalty. -
Open a dedicated business bank account and start trading through it
All business income and outgoings should flow through the business bank account from day one. Lenders will ask for 3-6 months of bank statements as part of affordability assessment — this clock starts when trading income starts moving through the account. Keeping the account active and healthy (regular receipts, no unexplained shortfalls) is the foundation of a strong lending application. -
File accounts reflecting trading activity at Companies House
The company's first set of trading accounts — showing income, outgoings, and retained profit or loss — will replace the dormant account filings. This creates a verifiable financial record. Lenders will check Companies House when assessing an application. At least one set of filed accounts showing trading activity is strongly preferred. -
Build a business credit profile
Register with business credit bureaux if not already. Paying suppliers on time, avoiding CCJs and late filings, and maintaining a positive payment record all contribute to credit score improvement. A thin credit file can be partially offset by strong bank statement evidence — but both together make the strongest application. -
Apply once 3-6 months of trading statements are available
Most business lenders — including Credicorp — want to see 3-6 months of business bank statements showing regular trading activity. Once that window is in place, apply. The amount available will be based on demonstrated affordability from those statements and accounts, not a pre-determined figure.
Dormant company lending questions
What does it mean for a company to be dormant?
A company is dormant when it has had no significant accounting transactions during a financial year. At Companies House, dormancy means the company files dormant company accounts (typically a simplified balance sheet with zero activity). At HMRC, dormancy means the company has notified HMRC it is not carrying on a business and has no corporation tax liability. A dormant company still exists as a legal entity — it has not been dissolved — but it has no trading activity.
Can a dormant company get a business loan?
In practice, no — or not until it reactivates. Lenders assess affordability based on demonstrated ability to generate income and repay from trading cash flow. A dormant company has no trading history, no bank transactions, and no accounts showing income. There is nothing for a lender to assess. Credicorp's affordability assessment is based on business bank statements and trading accounts — both of which will be absent or empty for a dormant company.
What does a company need to do to become lendable after dormancy?
The company needs to reactivate — both in terms of actual trading activity and in terms of its formal status with HMRC and Companies House. In practical terms: open a business bank account and start trading (receiving customer payments, paying suppliers). Notify HMRC of the restart date. File accounts showing trading activity. Once the company has several months of trading bank statements and at least one set of accounts showing income, it becomes assessable for business finance.
Does dormancy affect the company's credit record?
Yes, indirectly. Business credit bureaux (including Experian Business, Creditsafe, and Dun & Bradstreet) look at payment history, filed accounts, and trading data. A dormant company with years of dormant accounts, no payment history, and no trading data will have a thin or low-scoring credit profile. Reactivating and building trading history will improve this over time.
Can a shell or holding company with no trading activity borrow?
Not from Credicorp. The same logic applies: a holding company that generates no direct income and holds shares in subsidiaries has no cash flow to service a loan in its own right. Lending to a holding company against the cash flow of its subsidiaries requires a different structure (group lending, upstream guarantees) that Credicorp does not offer. Lending is to the trading entity directly.
Trading and ready to apply?
If your company has 3+ months of trading bank statements and is actively generating income, you can apply now at Credicorp.