You have to remember, that the poeple who give the OK to a business (or any other) loan are credit risk officers (also called underwriters in the retail/domestic/small corp end of the market).They are NOT business people, nor do they pretend to be.
They will take all the information you give them and put them into a computer which augments your data with historical, credit agency, current martket data, etc, to come up with the following:
- Probability of Default (sort of your credit rating): What is the probability that you/your new business will default over a time horizon (for large corps, it was 1 year from memory - no idea about the SME/retail end of the market).
- Exposure at default: Over the next 12 months, should you/your company default, what will be the maximum you/you company will owe?
- Loss given default: What will be the total loss should you default in the next 12 months? That is usually more than the exposure as they have to factor in insovlency, recovery costs, etc, They then reduce it by any solid collateral put up by you and they have senior claim to it; in which case it reduces the loss given default by the hair-cut valuation of the collateral.
If you multiply these, you will get an figure called the expected loss. Then they have to figure out the unexpected loss, which is basically to cover for inaccuracies of the quantitative and statiscial models and any porkies/over optimistic projections you give them that they have not been able to correct.
Bear in mind, they use statistical models (and I would guess by now, some nueral network based artifical intellifence, which is a form of applied probability) to the information you give them augmented with the other data mentioned above. They will also perform a scenario analysis, such as what if you only achieve half your projected revenue; what if the value of your collateral collapses, etc. and weight these depending on your application (their models may tell them that typically, applicants in your industry over-estimate their revenue by 100%, for example). They will assess you business plan (possibly), but they are looking more obvious lunacy in a business plan rather than assessing whether your plan really provides that much of a USP that you will get your revenue. They may pass off to an industry expert for an assessment (which you will be slugged for as part of the application process). They are not business people - they are credit risk officers.
Re Natwest, I don't think they are the only ones not issuing new (small/medium) business debt during COVID-19.. way too risky.. especially that amount and that industry. If you feel you have that good an idea to generate that much revenue and a healthy profit margin, my advice would be to find a good commercial/business finance broker who fronts multiple financial institutions and run your idea past that person. They will be able to give you first hand knowledge about your different options and different institutions that may be able to help... it may not be a bank at all.
(fair warning.. I know a bit about the credit risk assessment process for large corporates and various market structures.. I have never worked in the retail/SME end of the market.. and I have been out of working in the credit risk area for a few years now. Also, the above is a very high level overview of what goes on.. credit risk is far more detailed and there are other factors they have to take into account).
. I’ve managed to strike a decent deal on the unit. 
