If you need capital to help your business to bridge a gap in funding, aid cash flow or help your business to grow then a simple business loan may be the solution for you. Business loans offer a quick and flexible method of accessing funding that can be secured or unsecured.
We have taken a look at lots of business loan providers to help you see what some of the leading loan providers can offer you.
The table below gives a quick price comparison of the top UK business loan providers.
| Company | Minimum loan amount | Maximum loan amount |
|---|---|---|
| iwoca | £1,000 | £1 million |
| HSBC | £1,000 | £25 million |
| Barclays | £1,000 | £3 million+ |
| Natwest | £1,000 | £10 million |
| Lloyds | £1,000 | £500,000 |
| Santander | £2,000 | £5 million |
| TSB | £1,000 | £1 million |
| Metro Bank | £1,000 | £25 million |
| Bank of Ireland | €1,000 | €1 million |
| Bank of Scotland | £1,000 | Not stated |
| Ulster Bank | Not stated | £10 million |
| Virgin Money | £30,000 | £10 million |
| Funding Circle | £1,000 | £750,000 |
| Royal Bank of Scotland | £1,000 | No limit |
| Cooperative Bank | £25,000 | £15 million |
| Fair Finance | £2,000 | 20,000 |
| Catalyst Finance | £5,000 | £10 million |
| Clearfunder | £10,000 | £100,000 |
| Cubefunder | £5,000 | £100,000 |
| Fleximize | £5,000 | £500,000 |
| Nucleus Commercial Finance | £3,000 | £50 million |
| rebuildingsociety com | £25,000 | £250,000 |
| Sancus | £500,000 | No limit |
| Startup Loans | £500 | £100,000 |
| Ultimate Finance | £10,000 | £10 million |
* The facts and figures included here come from each company’s website and were accurate at the time of writing but may have since changed. Also, please keep in mind these may not be apples to apples comparisons as each provider offers different solutions. This guide should be used as a starting off point for more research on your part.
Below we profile each of the companies’ services and features in a bit more detail.
Note companies are ranked in no particular order and this no way indicates one solution is better than another.
Topics
Featured: iwoca*
Some of the features and benefits of iwoca’s business loan.
- Loans from £1,000 to £1 million
- Clear and transparent pricing
- Quick application process
- Funding released within hours
- Decisions based on business performance, not just credit score
- Flexible loan solution
- Repay the loan as soon as want to
- Facility to top up your loan
- Pay interest only for the days you have the money
- Highly rated on TrustPilot
iwoca offers flexible credit solutions to small businesses in Europe. They focus on supporting smaller businesses that are often not offered the same opportunities as larger ones. iwoca does this to help businesses grow and they use technology to help them calculate risk and assess business performance and don’t just rely on traditional credit scores to make loan decisions.
iwoca’s business loan offering allows customers to borrow between £1,000 and £1 million through the completion of a quick online application. They make a decision and release funds quickly. Their loan is flexible and only charges interest for the days that you have the money. Customers can repay their loan early with no penalty and increase the loan amount up to their credit limit.
1. HSBC
Some of the features and benefits of HSBC’s business loan.
- Small loans between £1,000 and £25,000 but they also offer larger loans
- Choice of fixed or flexible loans
- Fixed or variable monthly repayments
- The option of an interest only period
- No charges for additional repayments
- Option to defer your first repayment for up to three months
- Repayment terms from 1 to 10 years
- Manage your loan through internet banking
- Offset the interest against tax liabilities
- Apply online, over the phone or in branch
HSBC is an international banking provider who offers its services to personal, business and corporate customers in the UK and globally. Their business offering is tailored to smaller businesses who they offer additional support to help them grow and develop.
HSBC’s small business loan service includes the Small Business Loan and Flexible Business loan, which cater for different needs. Small Business Loan offers fixed payments for loans between £10,000-25,000 and the option to defer payment for the first three months. Flexible Business Loans offers fixed or variable interest rates for loans over £25,000. It also offers up to 24 months interest only and the ability to defer up to two monthly payments each year.
2. Barclays
Some of the features and benefits of Barclays’ business loan.
- Loans of £1,000 over £3 million
- Unsecured loans available up to £100,000
- Once approved funding can be received within 48 hours
- Customers will be given a provisional borrowing limit
- Will help fund business opportunities as they arise
- Loans below £25,000 for customers with a provisional borrowing limit will receive money within 24 hours
- Flexible borrowing solutions
- Choice of payment terms up to 20 years
- Fixed or variable rates
- Repayment holidays and interest only options available
Barclays is a well-established UK banking and financial services provider whose business services include a wide range of financial solutions. Barclays’ offer a wide range of different financial lending services such as cash flow finance, loans, mortgages, overdrafts and asset-based lending, all of which allows businesses to access funding.
Barclays’ business loans are available to customers and non-customers depending on their circumstances. Loans are available from £1,000 to over £3 million which can be unsecured loans that give you a flexible arrangement where you can fix the repayment length and whether it is fixed or variable. Some of their loans also offer repayment holidays and interest-only periods.
3. Natwest
Some of the features and benefits of Natwest’s business loan.
- Loans from £1,000 to £10 million
- Repayment terms up to 25 years
- A wide range of loan options
- Fixed or variable rates available
- Available to small businesses through to commercial businesses
- No early repayment charges available on some loans
- Repayment holidays available on some loans
- Suitable for a range of businesses
- Flexible offering
- A wide variety of funding services
Natwest is an established banking providing which is part of the RBS Group of banking and financial service businesses. Natwest serves businesses in England and Wales. Natwest offers a variety of lending services which include loans, overdrafts, mortgages, credit cards, invoice finance and asset finance.
Natwest’s loan services include small business loans from £1,000 to £100,000 for periods from 1 to 7 years. Variable rate loans are available from £25,001 with payment terms from 1 to 25 years that offer flexible finance options. Fixed rate loans are available from £25,001 to £10 million and are offered on payment terms of 3, 5, 10 or 15 years.
4. Lloyds
Some of the features and benefits of Lloyd’s business loan.
- Offer instant decision on loans up to £10,000
- Loans available from £1,000 to £500,000
- Repayment terms between 1 to 25 years
- Choice of fixed and variable rates
- No early repayment costs on some loans
- No arrangement fees on loans up to £25,000
- Repayment holidays available on some loans
- Online quote tool to allow you to assess loan potential without affecting your credit rating
- They approve 9 out of 10 loans
- Offer other complement services
Lloyds Bank is a banking and financial services provider who offers a range of financial lending services to businesses. They provide lending services to small business start-ups through to large businesses. They offer a range of loans, overdrafts, invoice finance and asset-based lending solutions.
Lloyds Bank offers three loans which are a Small Business Loan, Clean Growth Financing and Commercial Mortgages. Their Small Business Loan offers fixed and variable options from £1,000 to £50,000 on terms up to 10 years and a variable rate that tracks Bank of England rates.
5. Santander
Some of the features and benefits of Santander’s business loan.
- Loans available from £2,000 to £5 million
- Repayment terms from 6 months to 5 years, or up to 25 years on Commercial Loans
- Small business loans available
- Working capital loans available
- Commercial business loans
- Funds can be available within 24 hours for working capital loans
- Fixed rate loans with some variable rates available on Commercial Loans
- Flexible loans available
- No arrangement fees on small loans
- Offers a range of financed solutions
Santander is a well-known international banking services provider that offers a range of financial services to businesses which include borrowing solutions such as loans, asset finance, invoice factoring, and overdrafts.
Santander offers a range of loans that suit different business and circumstances. Their small business loan offers £2,000 to £25,000 on repayment terms from 1 to 5 years. Commercial Loans are available from £25,001 and they can be repaid up to 25 years.
Santander’s government-backed Growth Guarantee Scheme offers eligible smaller businesses loans from £500,000 to £5 million.
6. TSB
Some of the features and benefits of TSB’s business loan.
- Loans start at £1,000 up to £1 million
- Repayment terms between 1 and 25 years
- Base Rate Loan and Fixed Rate Loans available
- Secured and unsecured loans available
- Interest rate reduced by 1% as part of the Funding for Lending Scheme
- Capital repayment holidays may be available
- Arrangement fees may apply
- Choice of terms available to suit needs
- Flexible offering
- Offer a range of other financial services are available
TSB is an established bank in the UK and is part of a larger banking group called Lloyds Banking Group. They offer a wide range of lending services which include loans, overdrafts, mortgages and Enterprise Finance Guarantee.
TSB has several loan options available for businesses including a Base Rate Loan and Fixed Rate Loan. The Base Rate Loan is available for loans up to £25,000 which are repayable over 1 to 25 years, and security may be required. Fixed Rate Loans are available from £1,000 to £1 million that is repayable over 1 to 10 years and it can be a secured or unsecured loan. Arrangement fees apply on both loans and capital repayable holidays may be available.
7. Metro Bank
Some of the features and benefits of Metro Bank’s business loan.
- Loans available up to £25 million
- Repayment terms from 1 to 30 years
- Customer focused loans
- Simple and fast process
- Deal directly with the underwriters handling your application
- Local Director can talk you through the commercial loan
- Stores are open seven days a week
- No appointments needed
- No arrangement fees on loans under £25,000
- Tailored loans terms on £150,000 to £25 million
Metro Bank is a banking and financial services provider who operates differently to other banks with stores that are open seven days a week and no need for appointments. Metro Bank offers a range of borrowing services which include loans, overdrafts, credit cards, invoice finance and asset finance.
They offer two types of loans, business loans and commercial loans. Business loans are for loans under £60,000 that have repayment terms of one to five years. Commercial loans are available from £25,001 to £25 million, these offer tailored rates and fees and are available over one to 30 years.
8. Bank of Ireland
Some of the features and benefits of Bank of Ireland’s business loan.
- Loans from €1,000 to €1 million
- Fixed monthly repayments
- Apply in minutes online
- Aim to give you an answer within 24 hours
- Competitive interest rates
- Flexible repayment terms
- Tailored loans to suit your circumstances
- Unsecured business loans available
- No arrangement fees
- Designed with small to medium enterprises in mind
Bank of Ireland belongs to the Bank of Ireland Group who offer a diverse range of financial and banking services businesses whose experience dates back to 1783. Bank of Ireland only provides business banking services to businesses in Ireland.
Bank of Ireland has a single loan offering that is available to small and medium-sized enterprises for values from €1,000 to €1 million. Their loans offer flexible repayment terms and no arrangement fees. They tailor their loans to their customer’s needs and cash flow. Bank of Ireland offers unsecured business loans with a variable rate. They offer a simple and fast loan service where you can apply online and get a decision within 24 hours.
9. Bank of Scotland
Some of the features and benefits of Bank of Scotland’s business loan.
- Loans available from £1,000
- Repayment terms up to 25 years
- Can fix periods from one year to the loan term
- No arrangement fees for loans under £25,000
- Loans available on a secured or unsecured basis
- No early repayment costs
- Quote available online within minutes
- Arrangement fees can apply
- Offer a range of financial services
- Experienced provider
Bank of Scotland is a part of a larger banking group called Lloyds Banking Group. Bank of Scotland structures its business offerings by their business turnover into three categories and tailors their business banking solutions to these business groupings.
Bank of Scotland offers three levels of loans which includes Base Rate Loan that starts at £1,000 with repayment terms from one to 25 years. The Fixed Rate Loan is split into above and below £50,000, between £1,000 and £50,000 are available on repayment terms of one to 10 years. Loans over £50,000 can be fixed from one year to the length of the loan which can be up to 25 years.
10. Ulster Bank
Some of the features and benefits of Ulster Bank’s business loan.
- Business loans up to £10 million
- Loan interest rates linked to the Base rate
- Flexible lending
- Reduce your borrowing at anytime
- Structure your repayments to suit your needs
- Arrangement fees start at £150
- Dedicated team to support you
- Online application
- Available to non-Ulster Bank customers
- Existing customers can contact their relationship manager
- Part of a larger banking group
Ulster Bank is one of the businesses that form part of the RBS group which includes Royal Bank of Scotland and NatWest along with other financial services businesses. Ulster Bank provides a range of business lending services that include loans, overdrafts, credit cards and asset finance.
Ulster Bank offers a lending service to small to medium sized businesses and they specialise in lending money to agricultural businesses. The loan service is available to both existing and new customers, but existing customers can contact their relationship manager direct to arrange the loan. All loans have an arrangement fee that starts at £150 and is calculated at 1% above this level. For smaller-scale borrowing, business loans are available from £1,000 to £50,000. Larger, commercial lending can potentially go up to £10 million.
11. Virgin Money
Some of the features and benefits of Virgin Money’s business loan.
- Choice of business loans
- Loans available between £30,000 to £10 million
- Repayment terms up to 20 years
- Speedy loans available
- An online application that can take only 10 minutes to complete
- Automated decision straight away on online applications
- Fixed and variable rate loans available
- Structured loans available
- Also offers Government Growth Guarantee Scheme
Virgin Money is a UK-based financial services brand, now part of the Nationwide Building Society, and is the parent company and the unified brand for the former Yorkshire and Clydesdale Banks.
Virgin Money offer several business loans including Base Rate Loan from £30,000 to £10 million, which is a flexible, variable-rate loan with a repayment term of up to 20 years. Fixed Rate Loan from £30,000 to £10 million which is a fixed rate for up to five years. SONIA Loan for a minimum of £2.5 million, which is specifically for businesses with a turnover of over £6.5 million. Government Growth Guarantee Scheme minimum loan of £30,000, with a maximum of £2 million for most business groups.
12. Funding Circle
Some of the features and benefits of Funding Circle’s business loan.
- Unsecured loans of £10,000 to £750,000
- Loan terms of six months to six years
- Fixed rate loans
- A decision can be made as quickly as five hours
- Quick and easy application
- Personalised quote
- Funding released usually in 24 hours
- No fees charged for full early repayment
- Support established businesses of all sizes
Funding Circle is a newly established financial services business that offers investors and borrowers greater support and better financial solutions by creating a funding mechanism to enable them to support each other. Their services are limited to business loans and investment options.
Funding Circle offers fixed rate business loans to established businesses of all sizes. They offer loans from £10,000 to £750,000 that can be repaid over six months to six years. They do not penalise their customers who repay their loans in full early and so they do not charge a fee or charge you interest on the remaining loan term.
13. Ultimate Finance
Some of the features and benefits of Ultimate Finance’s business loan.
- Loans from £10,000 to £10 million
- Repayment terms up to 7 years
- Interest rates from 1.5% per month
- Fast and flexible loan
- Decision within one working day
- Funding released within one working day of approval
- Available to limited companies and LLP’s with minimum of two years trading
- Check eligibility online
- No setup fees
- No early repayment charges
Ultimate Finance has been providing financial services for over 20 years and has funded thousands of businesses of a variety of shapes and sizes. They offer a range of financial products such as cash loans, hire purchase agreements, industry financing and supply chain solutions.
Ultimate Finance loan facilities offer loans from £10,000 to £10 million that are repayable up to 7 years. They offer a fast and flexible loan service which includes online eligibility checker, an online application that will give you a decision within one working day and funding will be released within one working day of the loan being approved. Loans also have no setup fee or early repayment fee.
14. Royal Bank of Scotland
Some of the features and benefits of Royal Bank of Scotland’s business loan.
- Small business loans from £1,000 to £100,000
- Commercial loans for £25,001 to £10 million
- Fixed interest rate
- Loan term from 1 to 10 years
- No arrangement fees
- No early repayment charges
- Existing customers can apply online in 10 minutes
- Personalised rates for existing customers
- Customers can also contact their Relationship Manager to apply
- Loans designed by the turnover of the business
Royal Bank of Scotland is a well-established Scottish bank that was founded in Edinburgh in 1727 and is one of the biggest banks in Scotland. They are one of the banks and investment businesses that form the RBS Group which include NatWest and Ulster Bank.
Royal Bank of Scotland offers a range of lending solutions which are designed to cater for businesses with a different turnover. Those with a turnover below £2 million are offered a small business loan which is a fixed rate loan from £1,000 to £100,000 which can be taken over 1 to 10 years. Businesses with a turnover above £2 million are offered a range of commercial loans which include fixed and variable rate loans which can offer loans of £25,001 to £10,000,000.
Royal Bank of Scotland website
15. Cooperative Bank
Some of the features and benefits of Cooperative Bank’s business loan.
- Loans from £25,000 to £15 million
- Fixed rate loans from £250,000 to £10 million
- Variable rate loans to £15 million
- Repayment period of 1 to 25 years
- Interest is charged monthly
- Arrangements fees are applied at 1%
- Flexible repayment terms
- Decisions are generally given with 7 working days
- They offer 70% funding against asset purchase
- An ethical lender
Cooperative Bank is a UK finance provider that is an ethical bank whose policies are customer-led which guides how they run their business. Their ethical stance influences who can be their customers. They offer a range of lending facilities which include loans, overdrafts and credit cards.
Cooperative Bank offers two loan solutions for businesses. The first loan is a variable rate loan product which offers repayment periods of 1 to 25 years where interest is applied monthly on loans up to £15 million. The second is a fixed rate loan product which lends £250,000 to £10 million, where the payment options and terms are agreed on application.
16. Fair Finance
Some of the features and benefits of Fair Finance’s business loan.
- Small business loans from £2,000 to £20,000
- Aimed at entrepreneurs who struggle to secure mainstream finance for their businesses
- Unsecured business loans
- Must be actively trading for a minimum of 1 year
- Arrangement fee of 5% (minimum fee of £200)
- Apply online or by phone
- Aim to make the loan process as easy and convenient as possible
- No charges for early repayment
- Decision within 24 hours
Fair Finance is a financial services provider that was established in 2005 that offers a range of financial products and services. They were set up to offer fair finance to all that is accessible and affordable and as such, they re-invest their profits.
Fair Finance offer loans from £2,000 to £20,000 aimed at entrepreneurs who struggle to secure mainstream finance for their businesses. Fair Finance is transparent with their prices and allows businesses to repay their loan early without early repayment charges. They may also offer business loans for bad credit depending on circumstances.
17. Catalyst Asset Finance
Some of the features and benefits of Catalyst Finance’s business loan.
- Specialists in financing equipment for broadcast media businesses
- Supports all business types from freelancers, SMEs and multinational PLCs
- Loans ranging from £5,000 to £10 million
- Terms usually range from one to five years
- Source the best asset finance for your business needs
- Customer support during non-conventional hours to support flexible working
- Providing loans since 1998
- Aim to create strong, long-term relationships with their customers
Catalyst Asset Finance specialise in finance for the broadcast, media, live entertainment and audio visual industries, supporting freelancers, SMEs and up to large multinational PLCs.
Financial products include: Hire Purchase, Finance Leasing, Operating Leasing, Refinancing, Commercial Loans and Invoice Discounting.
They offer loans ranging from £5,000 to £10 million with terms usually range from one to five years.
18. Clearfunder
Some of the features and benefits of Clearfunder’s business loan.
- Loans from £10,000 to £100,000
- Flexible terms
- Competitive rates
- Quick and efficient loans
- Easy to understand terms
- Loans offered to a wide variety of businesses and industries
- Affordable payments
- Tailored to meet your needs
- Dedicated support
- Will consider all circumstances
Clearfunder is a small loan provider who was established to help small to medium-sized businesses to access funding to help them grow and survive in a challenging business environment and to provide an alternative to the traditional banking institutions for business loans.
Clearfunder offers loans to small to medium-sized companies from £10,000 to £100,000 in most industries and they will consider all applications. They offer loans on flexible terms that allow them to tailor their loans to each individual company needs and financial position. They offer loans with easy to understand terms and provide dedicated support.
19. Cubefunder
Some of the features and benefits of Cubefunder’s business loan.
- Loans from £5,000 to £100,000
- Fixed interest rates
- No default charges made for late payments
- No early repayment charges
- Tailored loan offering
- UK team of decision makers to help support applications
- No additional interest charges for extending the length of the loan
- A simple online application process
- Lending to a variety of businesses
- Support small businesses
Cubefunder is a small loan provider who understands small to medium-sized businesses as they are in that category as well and they know that even successful businesses need help. They set up the business to fill a gap in the market to provide a different service to smaller businesses.
Cubefunder tailors their loan solutions to meet their customers’ needs and offer from £5,000 to £100,000 on flexible terms with a pre-agreed rate that can be extended if needed via prearrangement. They do not charge fees as standard for late payments and they do not penalise customers who repay their loan early.
20. Fleximize
Some of the features and benefits of Fleximize’s business loan.
- Loans from £5,000 to £500,000 for SMEs
- Loans for established businesses for over £500,000
- Repayment terms of up to 48 months
- Funding can be received as soon as 24 hours
- Flexible loan
- No penalty for early repayment, top-ups or repayment holidays
- Dedicated relationship manager
- Tailored loans
- High-value loan customers have access to their partners and investors
- Get to know your business and don’t rely on credit scores
Fleximise was launched in 2014 and is an award-winning digital business lender that provides flexible finance options for UK SMEs. Fleximise offer two loans: Flexiloan and Flexiloan Lite.
The Flexiloan is designed for businesses trading for 12 months, offering loans between £5,000 and £500,000 on 12 to 60 month terms. Rates are from 0.9% per month. The Flexiloan Lite is aimed at businesses trading for just 6 months, offering loans between £5,000 and £500,000 on 3 to 12 month terms. Rates from 1.9% per month
21. Nucleus Commercial Finance
Some of the features and benefits of Nucleus Commercial Finance’s business loan.
- Loans from £3,000 to £50 million
- Repayment terms from three months to seven years
- Secure and unsecured loans
- Secured loans based on property or business card takings
- Unsecured loans up to £500,000
- Quick access to funds
- Flexible payments
- Access up to 200% of your monthly card volumes
Nucleus Commercial Finance was formed in 2011 aiming to provide alternative funding options for UK SMEs. Nucleus Commercial Finance offer three types of business loans.
The Business Loan is a fast, unsecured business loan from £10k to £500k, with long payment terms. The Recovery Loan Scheme ranges from £10k to £2m, with flexible repayment terms spanning three months to six years. Revenue-Based Loans For Business is a flexible financing option where you can borrow up to 200% of your monthly revenue, based on your sales.
Nucleus Commercial Finance website
22. Rebuildingsociety.com
Some of the features and benefits of rebuildingsociety.com’s business loan.
- Loans from £25,000 to £500,000
- Repayment terms of 6 months to 5 years
- Quick business loans
- 5-minute application
- Funding released within 1-3 weeks
- Loan terms available for 6 to 60 months
- No early repayment charges
- No restrictions on sectors
- Straightforward eligibility criteria
- Reduce your interest rate by engaging with the community
- Able to refinance your existing debt
rebuildingsociety.com is a Leeds based peer-to-peer lending business that brings together lenders and borrowers to enable businesses to get a better loan deal. They encourage lenders to be more actively involved by inviting them to be ‘financial activists’ so they understand who they are lending to and their business.
Loans are available from £25,000 to £250,000 for periods from six months to five years. Loans are posted within the community and lenders are able to ask questions and learn more about the business before committing to the loan. Borrowers can accept the interest rate offered or wait for lower bids from lenders.
23. Sancus
Some of the features and benefits of Sancus’ business loan.
- Loans from £500,000 with no upper limit
- Asset-backed loans
- Quickly underwrite loans
- Offer bespoke bridging and development loans for developers
- Use a co-funding model to finance loans
- Syndicated loans that reduce the risk for lenders
- Experienced loan team
- Relationship-based business for better understanding
- Requires a commitment fee
Sancus is an alternative finance provider that uses its marketplace to match lenders and borrowers to create a market that is desirable to both parties as they offer lenders above the current interest rates. They offer borrowers a range of financial services including secured cash flow funding and asset-backed loans.
Sancus offer asset-backed loans from £500,000 and do not set an upper limit to their lending. They offer a service that is bespoke and they have specific financial offerings for developers. They underwrite their loans quickly to allow borrowers to have the security they need.
24. Start Up Loans
Some of the features and benefits of Start Up Loans’ business loan.
- Loans for up to £25,000 per individual or £100,000 per business
- Repayment terms of one to five years
- Fixed interest rate of 6% per annum
- Government-backed lending
- Receive 12 months free mentoring
- No setup fees
- No early repayment fees
- Offer pre-loan support
- Provide a range of useful guides and templates
- Receive exclusive discounts on business products
The Start Up Loans Company is a wholly-owned subsidiary of the British Business Bank. It is a government-backed support scheme that helps individuals to start or grow a business in the UK. They offer a low-interest loan that also provides business support in the form of business mentoring for 12 months from experienced advisers as well as providing a range of resources such as guides and templates.
Start Up Loans offer loans up to the value of £25,000 which are repayable over one to five years with a fixed interest rate of 6%. The loans are fair and simple with no arrangement fees or early repayment fees and they offer pre-loan support to help you make the application.
* Please also note we have an affiliate relationship with iwoca. This means they pay us a commission if you apply for and receive funding for a loan via a link from our website. This comes at no cost to you and helps keep this website free. However, we feel it’s important you know. We may be paid a fee if you visit use Swoop and/or EJ Finance to take out a loan.
FAQ
What Are Business Loans?
You may consider taking out a business loan if you want to start a business but don’t have the initial outlay. Business loans are a simple way to borrow money to finance your business venture. There are different types of business loans depending on your needs.
You could take out a secured loan. This option is where you pledge an asset against the debt if you cannot keep up with the repayment terms. This could be equipment, vehicles or stock that the lender would claim if you can’t make repayments.
An unsecured loan agreement means you don’t have to use business assets as security. Instead, you may have to provide what is called a personal guarantee. This means you agree to pay back the money personally if your business can’t.
An unsecured business loan often comes with higher interest rates to offset the risk for the lender.
Different business loan providers will offer different deals, including small business loans, start-up loans and short term business loans. To borrow money for your business, the lender will check your personal credit rating and your business credit rating to see if you can meet the repayments.
Is It Easy To Get A Bank Loan For A Business?
When looking into business finance options, for example, a secured business loan or unsecured business loan, you need to make sure you have all the information regarding your business ready before you apply. Different lenders have different criteria, which may cause the application more problematic.
If you are looking for a start-up loan for your business, you could apply to your bank, as this would be the easiest way to get the best interest rates. However, bank loans can be difficult to secure for a start-up loan, and you may find you are denied. In this case, you may need to try an online lender.
A lender will usually run a check on your personal and business credit score. If you have struggled in the past, you may be declined a business loan or be offered high-interest rates.
You need to make sure you fill in the application carefully and accurately. Although this sounds simple, lenders will see through it if you are trying to make things look better than they are and you will end up rejected for a loan.
Applying for a business loan is relatively simple, but you need to be sure you have all the information ready and correct at the time of applying and be prepared for possible setbacks.
How Do You Get Approved For A Business Loan?
Firstly you need to check your credit rating and make sure it is good. You then need to do the same for your business credit score.
To improve your rating, you need to make sure any payments are made on time, not have any CCJs, file your accounts before the deadlines, and only apply for credit if and when necessary.
If you have good credit scores and feel you need to apply for a type of loan, you need to decide how much money you wish to borrow and the realistic repayment duration.
Consider the type of loan your business needs. Business loans work by either securing the money against a business asset as with secured loans or providing a personal guarantee as with unsecured loans.
Make sure you have all of your financial information in order. Don’t go with the first loan provider you find; shop around for the best deal you can get, so always check out alternative lenders for a better deal.
Lastly, check the eligibility criteria and the conditions of the loan. Will you need a director’s guarantee, the payment terms, and how long you have to repay the loan?
Once you have found the right loan for your business, you can begin the application process, and fingers crossed, you will be approved.
What Are The Advantages And Disadvantages Of Loans?
Taking out a business loan with a bank will still allow you full control over your business instead of borrowing from an investor who may interfere with how your business is run.
It is a good way to get the money you need to grow your business if you can afford the repayments. The main disadvantage of taking out a loan is the possibility that you won’t be able to make the repayments.
How Much Money Can I Borrow To Start A Business?
It varies by lender but generally, you can apply for a start-up loan from £500 to £25,000.
What’s The Biggest Business Loan You Can Get?
It totally depends on your business and assets.
For example, the Coronavirus Large Business Interruption Loan Scheme provided loans of up to £200 million in value.
What Is The Average Interest Rate On A Small Business Loan?
It varies a lot by lender. Up until mid-2022 it was possible find small business loans with rates as low as 4% a year. However, with the Bank of England rate on the rise, most small business loans now start at 8% per year and up.