The Challenge
You've incorporated your business as a limited company — perhaps for tax efficiency, liability protection, or professional requirements. But now you want a mortgage, and your "company" is only months old.
The good news
What Lenders Actually Want
- Continuous trading history — 2-3 years of you running a business
- Evidence of sustainable income — that your income will continue
- Documentation — proof of both old and new trading arrangements
Continuity Requirements
The key concept is continuity — showing that your new company is essentially the same business you were running before, just in a different legal wrapper.
What Establishes Continuity
Strong Continuity
- • Same type of work/industry
- • Same or similar clients
- • Similar income levels
- • Accountant letter confirming transition
- • No gap between structures
Weak or No Continuity
- • Different industry or work type
- • New/different client base
- • Significantly different income
- • Gap between trading structures
- • Moving from employment (not self-employment)
The Accountant's Letter
A letter from your accountant explaining the transition is often crucial. This should confirm:
- You traded as a sole trader from [date] to [date]
- You incorporated as [Company Name] on [date]
- The nature of the business remained the same
- Historical income levels (from SA302s) represent the same trading activity
Different Starting Scenarios
Previously Sole Trader (Best Scenario)
You've been self-employed for 2+ years and recently incorporated.
What lenders see: Continuous self-employment with a structure change
Documents needed: SA302s from sole trader years + new company accounts (even if short)
Outlook: Most lenders will accept this with accountant confirmation
Previously Employed (Challenging)
You left employment to start a Ltd company.
What lenders see: New business owner, unproven income
Documents needed: Company accounts only (employment history less relevant)
Outlook: Most lenders require 1-2 years of company accounts minimum
Previously Contractor (via Umbrella)
You were contracting through an umbrella company and now have your own Ltd.
What lenders see: Depends on how umbrella income was treated
Documents needed: Umbrella payslips + new company accounts
Outlook: Contractor-specialist lenders may accept continuous contracting history
Strategies for Success
1. Get Your Accountant Involved Early
Ask your accountant to prepare a letter explaining the continuity between your previous trading and new company. This should be ready before you approach lenders.
2. Prepare Projections
For new companies, some lenders accept accountant-prepared projections based on contracts in hand or historical trading patterns. Have these ready.
3. Target the Right Lenders
Specialist lenders and some building societies are more flexible with newly incorporated companies that have strong prior history. A broker can identify these.
4. Consider Timing
If your first full company year-end is approaching, waiting a few months for certified accounts may open more lender options than applying with only management accounts or projections.
Key message
Find lenders that accept your trading history
Get matched with lenders who understand incorporation transitions and recognize prior trading history.
Get matched