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? 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!
Best business loan providers UK
| Loan provider | Minimum loan | Maximum loan | Maximum term |
|---|---|---|---|
ABC Finance | £500 | £1,000,000 | 5 years |
ArchOver | £100,000 | £5,000,000 | 3 years |
Aspire Business Loans | £5,000 | £300,000 | 5 years |
Atom Bank | £100,000 | £5,000,000 | 6 years |
Bank of Scotland | £1,000 | £1,000,000 | 25 years |
Barclays | £1,000 | £100,000 | 10 years |
Bibby Financial Services | n/a | n/a | 2 years |
Bluestar Leasing | £5,000 | n/a | 5 years |
Braemar Finance | n/a | n/a | n/a |
Capify | £5,000 | £500,000 | 12 months |
CapitalBox | £2,000 | £50,000 | 18 months |
Catalyst Finance | £25,000 | £1,000,000 | 12 months |
ClearFunder | £10,000 | £100,000 | 12 months |
Close Brothers | n/a | n/a | n/a |
Clydesdale Bank | £25,001 | £10,000,000 | 15 years |
Co-operative Bank | £1,000 | £250,000 | 15 years |
Cubefunder | £5,000 | £100,000 | n/a |
Fleximize | £5,000 | £500,000 | 4 years |
Folk 2 Folk | £50,000 | n/a | 5 years |
Funding Circle | £2,000 | £250,000 | 6 years |
Hitachi Capital | £10,000 | £500,000 | 5 years |
Hope Capital | £50,000 | £5,000,000 | n/a |
HSBC | £1,000 | £25,000 | 20 years |
Huddle Capital | n/a | n/a | 12 months |
Independent Growth Finance | n/a | n/a | n/a |
inFund | £5,000 | £150,000 | 12 months |
Intelligent Loans | £10,000 | £250,000 | 5 years |
Iwoca | £50,001 | £250,000 | 3 years |
LendingCrowd | £5,000 | £500,000 | 5 years |
Liberis | £50,001 | £150,000 | 2 years |
Lloyds Bank | £1,000 | £1,000,000 | 25 years |
Market Finance | £5,000 | £250,000 | 3 years |
Merchant Money | £5,000 | £500,000 | 2 years |
Metro Bank | £2,000 | £25,000,000 | 30 years |
NatWest | £1,000 | £10,000,000 | 25 years |
Novuna | £10,000 | £500,000 | 5 years |
Nucleus Commercial Finance | £10,000 | £250,000 | 6 years |
PFC Finance | £5,000 | £1,000,000 | 5 years |
Rangewell | n/a | n/a | 5 years |
Rebuildingsociety.com | £25,000 | £250,000 | 5 years |
Royal Bank of Scotland | £1,000 | £10,000,000 | 25 years |
Santander | £2,000 | £25,000 | 5 years |
Satellite Finance | £3,000 | £1,000,000 | 10 years |
Spotcap | £50,000 | £350,000 | 24 months |
Starling Bank | £5,000 | £20,000 | 5 months |
Start Up Loans | n/a | £25,000 | 5 years |
ThinCats | £1,000,000 | £15,000,000 | n/a |
White Oak | £2,000 | £500,000 | 5 years |
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
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.
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.
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.
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.
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.
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.
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.