Business loans

Last updated on 18 January 2024

Are you a business in need of financial cashflow assistance? If so, then you may be considering taking out business loans to cover costs and grow your enterprise. But how do you go about choosing the best UK business loan provider for your needs?

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We have gathered some of the top contenders in the market who offer competitive rates and favourable terms – read on to learn more about who they are and their lending packages!

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Wallester Business
✓ Virtual & Physical Cards
✓ No Setup Fees
✓ No Monthly Fees
Pricing Trial period Contact

Revolut Business
✓ Business Current Account
✓ Award-Winning Mobile App
✓ Quick & Easy Application Process
Pricing Trial period Contact

Tide Business Bank Accounts
✓ Free, Plus, or Pro Account
✓ iOS & Android Mobile App
✓ Upload & Auto-Match Receipts
Pricing Trial period Contact

Card One Money
✓ No Credit Checks
✓ Simple Fees
✓ Up to 3.5% Cashback
Pricing Trial period Contact

ANNA Money
✓ Apply in 10 minutes
✓ Bookkeeping & Payroll Tools
✓ User-Friendly Mobile App
Pricing Trial period Contact

Co-Op Business Banking
✓ Business Current Account
✓ Online, App & High Street Banking
✓ Quick & Easy Application Process
Pricing Trial period Contact

HSBC Business Banking
✓ Business Current Account
✓ In-Branch, Online & App Banking
✓ FSCS Protected
Pricing Trial period Contact

Metro Business Banking
✓ Business Current Account
✓ High Street Presence
✓ FSCS Protected
Pricing Trial period Contact

Mettle Business Banking
✓ Business Bank Account
✓ Online & App
✓ Quick & Easy Application Process
Pricing Trial period Contact

Monzo Business Banking
✓ Business Current Account
✓ Dedicated mobile app experience
✓ FSCS Protected
Pricing Trial period Contact

Virgin Money
✓ Business M Account
✓ In-Store, Online & App Banking
✓ Insights & Forecasting Platform
Pricing Trial period Contact
Video: Business loans and finance explained

Best business loan providers UK

Loan providerMinimum loanMaximum loanMaximum term

ABC Finance

£500£1,000,0005 years

ArchOver

£100,000£5,000,0003 years

Aspire Business Loans

£5,000£300,0005 years

Atom Bank

£100,000£5,000,0006 years

Bank of Scotland

£1,000£1,000,00025 years

Barclays

£1,000£100,00010 years

Bibby Financial Services

n/an/a2 years

Bluestar Leasing

£5,000n/a5 years

Braemar Finance

n/an/an/a

Capify

£5,000£500,00012 months

CapitalBox

£2,000£50,00018 months

Catalyst Finance

£25,000£1,000,00012 months

ClearFunder

£10,000£100,00012 months

Close Brothers

n/an/an/a

Clydesdale Bank

£25,001£10,000,00015 years

Co-operative Bank

£1,000£250,00015 years

Cubefunder

£5,000£100,000n/a

Fleximize

£5,000£500,0004 years

Folk 2 Folk

£50,000n/a5 years

Funding Circle

£2,000£250,0006 years

Hitachi Capital

£10,000£500,0005 years

Hope Capital

£50,000£5,000,000n/a

HSBC

£1,000£25,00020 years

Huddle Capital

n/an/a12 months

Independent Growth Finance

n/an/an/a

inFund

£5,000£150,00012 months

Intelligent Loans

£10,000£250,0005 years

Iwoca

£50,001£250,0003 years

LendingCrowd

£5,000£500,0005 years

Liberis

£50,001£150,0002 years

Lloyds Bank

£1,000£1,000,00025 years

Market Finance

£5,000£250,0003 years

Merchant Money

£5,000£500,0002 years

Metro Bank

£2,000£25,000,00030 years

NatWest

£1,000£10,000,00025 years

Novuna

£10,000£500,0005 years

Nucleus Commercial Finance

£10,000£250,0006 years

PFC Finance

£5,000£1,000,0005 years

Rangewell

n/an/a5 years

Rebuildingsociety.com

£25,000£250,0005 years

Royal Bank of Scotland

£1,000£10,000,00025 years

Santander

£2,000£25,0005 years

Satellite Finance

£3,000£1,000,00010 years

Spotcap

£50,000£350,00024 months

Starling Bank

£5,000£20,0005 months

Start Up Loans

n/a£25,0005 years

ThinCats

£1,000,000£15,000,000n/a

White Oak

£2,000£500,0005 years
Best business loan providers compared

What are business loans?

Business loans are a type of financing offered by banks and other lenders that can help businesses meet their financial goals. Loans allow companies to borrow money to cover expenses like new equipment, expansion projects, or inventory. The borrowed funds must be repaid with interest over an agreed-upon period of time, typically ranging from one to five years.

Secured versus unsecured business loans

Business loans can be either secured or unsecured:

  • Secured business loans require collateral, such as a company’s assets, to guarantee the loan amount.
  • Unsecured business loans do not require collateral, and are usually more difficult to obtain. Interest rates for secured business loans tend to be lower than those for unsecured business loans.

How do business loans work?

When a business applies for a loan, the lender will review their credit score and financials to determine eligibility.

If approved, the borrower will be provided with loan terms, including how much money is being borrowed, the interest rate, repayment period, and any additional fees or charges associated with the loan.

The borrower must agree to these terms before accepting the loan. Once the loan is accepted, the borrower will make regular payments to the lender until the full amount of the loan (plus any applicable interest and fees) is repaid.

Business loans can provide an important source of funding for limited companies looking to expand or invest in their operations. However, business loans should only be taken out when absolutely necessary.

Why are bank loans good for a business?

Bank loans are a great option for businesses looking to finance new projects, purchase equipment or expand operations. Bank loans typically offer competitive interest rates and repayment terms that can be tailored to the business’s specific needs.

Additionally, bank loans can provide businesses with much-needed capital that would otherwise be difficult or impossible to obtain.

What can business loans be used for?

Business loans can be used for a variety of purposes, including purchasing equipment or inventory, financing expansion projects, and covering operational costs. Businesses may also use loans to refinance existing debt or consolidate multiple debts into one loan with a lower interest rate.

Which UK banks offer business loans?

Most major banks offer business loans to qualified borrowers. These include Santander, NatWest, HSBC, Barclays, Lloyds Banking Group and the Co-Operative Bank.

In addition to banks, there are a number of other financial institutions that offer loans in the UK including invoice factoring companies and peer-to-peer lenders.

Loan approval criteria

When applying for a business loan, lenders will consider several factors to determine the applicant’s eligibility. These include the company’s credit score, financial history, and cash flow. The lender may also look at matters such as the company’s industry, size, amount of debt already held, and prospects for growth. Some lenders might also require a personal guarantee from the business owner.

What are the best UK small business loans?

When it comes to finding the best UK small business loan, there are a few key factors to consider. Firstly, you should determine what kind of loan you require – such as an unsecured or secured loan. Secondly, you need to think about the time-frame and affordability of your loan – whether you need a fast loan, short-term or long-term loan, and how much you are able to afford in terms of monthly repayments.

When deciding which UK small business loan is best for your needs, it’s important to research all available options carefully. Different lenders offer different terms and conditions, so be sure to read the fine print before signing on the dotted line.

How to get small business loans?

Small businesses may have difficulty obtaining traditional business loans due to the higher risks associated with smaller companies. Fortunately, there are now a range of alternative sources of funding available to small businesses. These include online lenders, peer-to-peer lenders, and invoice financing programs.

Applying for an alternative loan may be easier than obtaining a traditional bank loan as the approval process is usually much faster. When applying for any type of loan, it is important to read all the terms and conditions carefully before signing any agreement.

Business loans FAQ

What documents do you need to apply for a business loan?

Businesses typically need to provide a variety of documents to apply for a business loan. These may include proof of identity, tax returns, financial statements and other information related to the business’s operations. The specific documents required will vary depending on the lender and type of loan applied for.

How to get loans to start a business?

Entrepreneurs can use loans to start a new venture. To qualify for a loan, entrepreneurs must typically demonstrate that their idea is viable and that they have the necessary funds and resources to launch the business. The same criteria used for assessing existing businesses are also applicable when evaluating new companies.

In addition to providing evidence of financial stability and a solid business plan, entrepreneurs may also need to provide collateral or a personal guarantee to secure the loan. It is important for entrepreneurs to research the different types of loans available before applying.

Loans can help businesses meet their goals and grow, but it is important to proceed carefully and research all available options before committing to any agreement.

How to get business loans with bad credit?

Businesses with bad credit can still obtain a loan, although the interest rates and repayment terms are likely to be more expensive than for businesses with good credit.

Alternative lenders such as online lenders or peer-to-peer lenders may be willing to provide loans to businesses with bad credit. In some cases, borrowers may need to provide collateral or a personal guarantee to secure the loan.

Business owners should also look into other forms of financing, such as grants and lines of credit, which may be easier to obtain than a traditional business loan. Regardless of the type of funding sought, it is important for businesses to have a solid business plan and financials in order to demonstrate their ability to keep up with repayments.

How to qualify for business loans?

In order to qualify for a loan, businesses must demonstrate their financial stability and ability to repay the loan. Most lenders will review the company’s credit score and financial history when assessing an application. They may also require evidence of cash flow, profitability, and sound management practices.

Businesses should ensure that all their paperwork is in order and that they can present a clear business plan. It is also important to be aware of any hidden fees or charges associated with the loan. By doing thorough research, businesses can ensure they get the best deal possible.

How much are business loans?

The amount of a loan depends on the size and nature of the business. Generally, lenders will assess the company’s cash flow, credit score and financial history to calculate how much they can lend.

How long are business loans?

The length of a business loan depends on the lender and the type of loan. Business loans may range from as little as three months to five years or more.

What are the interest rates for business loans?

Business loan interest rates vary depending on the size and nature of the business, as well as the lender’s assessment criteria. Generally, the interest rate is determined by combining a number of factors such as the size of the loan, repayment terms and credit score.

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