Compare business loans
Compare business loans from 100+ UK lenders to find the right finance for your business.
- Compare hundreds of business loans in one place and find the best match for your company
- Soft search only - comparing with us won’t affect your credit score
- We don’t lend money - we help UK businesses compare loans and find suitable lenders
- Start comparing quotes in minutes with no obligation to proceed
Business loans at a glance
1. How much can I borrow?
You can borrow £5,000 to £1 million+, depending on your business finances, credit history, and the type of loan you choose. Comparing lenders can help you find the most suitable borrowing amount for your needs.
2. Types of business loans available
Compare secured and unsecured business loans, with different terms, rates, and eligibility criteria depending on the lender.
Different loans might suit short-term cash flow, while others are designed for larger investments.
3. Am I eligible for a business loan?
Eligibility depends on factors like your trading history, turnover, credit profile, and whether you can provide security.
When you compare business loans with us, you can see what you’re eligible for without affecting your credit score.
What is a business loan?
A business loan is a type of borrowing taken out by a commercial organisation, rather than an individual. Rather than taking out a loan in your own name, you’d borrow as a corporate entity.
You can use a business loan to:
- Start a new business
- Grow your existing business
- Invest in your company - in things like people, equipment, stock or premises
A business loan works in much the same way as a personal loan. You agree to pay back the loan and any interest due in regular repayments over a specified period.
How does a business loan work?
Compare and choose a loan
Compare deals from trusted lenders with us and find the right finance for your business.
Apply for your loan
You can apply for your chosen loan securely online in minutes.
Pay back the loan
Once your loan is approved, the lender will release the funds. Your business will then begin to pay the loan back in monthly instalments.
How much can I borrow with a business loan?
The amount you can borrow with a business loan depends on several factors, including:
- Your business’s financial health
- Your credit history
- The type of loan you choose
Most lenders will assess your revenue, profits, and existing debts to determine the loan size you qualify for.
Here’s a quick guide to typical borrowing ranges for UK businesses. Your actual loan will depend on your business finances and lender requirements.
| Loan type | Typical borrowing range | Best for |
|---|---|---|
| Small business loans | £5,000 to £500,000 | Short-term needs, minor expansions |
| Medium to large business loans | Up to £1 million or more | Major expansions, larger investments, detailed documentation required |
Alternative lenders might offer smaller, short-term loans more quickly, although interest rates can be higher.
It’s important to borrow only what your business can comfortably repay. Choosing a loan that fits your growth plans and cash flow will help you expand without unnecessary financial strain.
Here are some examples of how much different loan amounts could cost over various periods and at various APRs.
| Loan amount | Loan term | APR | Monthly repayment | Total interest paid |
|---|---|---|---|---|
| £25,000 | 36 months | 8% | £783 | £3,204 |
| £25,000 | 60 months | 12% | £556 | £8,367 |
| £100,000 | 36 months | 8% | £3,134 | £12,811 |
| £100,000 | 60 months | 12% | £2,224 | £33,467 |
Actual rates vary by lender and your business profile.
Three types of business loans to consider
Depending on your needs and financial position, there are three main types of business loan to consider.
Secured business loans
You can secure a loan against a number of different things, depending on how much you want to borrow, and what for.
Security might be a personal guarantee, or you might provide whatever's being purchased with the loan (like a property) or other business assets as security.
It might even be possible to put your own home up as security, although your home will be at risk if the business fails to keep up repayments, so think carefully about this option.
Generally speaking, you’ll be able to borrow a larger sum using a secured loan than with an unsecured loan.
Unsecured business loans
An unsecured business loan is when you borrow from a bank, building society or peer-to-peer (P2P) lender without offering any security for the loan.
As the loan is unsecured, there's no collateral to back the loan and nothing for the lender to repossess if you fail to keep up your repayments.
The amount you can borrow and the interest rate will depend on the creditworthiness of you and your business. Rates will often be higher than secured options.
Some lenders specialise in unsecured lending for smaller or newer businesses, while others focus on established firms. Comparing business loans can help you find lenders more likely to accept your application.
Peer-to-peer lending
Getting a loan via a peer-to-peer (P2P) lending platform could be another way to finance your business.
With P2P lending, you borrow from individuals rather than a bank or lender.
Access to lending depends on the platform you choose. For example, some might only offer borrowing to sole traders.
Availability, rates, and eligibility criteria can vary widely between P2P platforms, so comparing options is particularly important.
Who is eligible for a business loan?
You might need a business loan if you need help with start-up costs, or you want to invest to enable your business to grow.
Your eligibility for a loan will depend on a range of factors including:
- Your age - You’ll normally need to be at least 18 years old
- Your bank account - You’ll need a UK-based bank account
- Your credit history - If you have a good history of repaying credit then you’re likely to have more options
- Your business - A lender might want to see business accounts and bank statements
- Your intentions - You might have to share a business plan explaining what you want to do with the money
- Your security - If you can put down assets as security, that might give you access to better terms
While approaching your current bank might seem like a simple solution, it can pay to shop around to see if there are better terms available elsewhere.
How business loans can help you if you’re a small business owner
A business loan can help you raise funds without having to wait until you have generated enough money to grow. You can put your business plan into action sooner
- Interest rates can be more favourable than other options
- You retain control of your company without having to give up equity by attracting external investors
- A loan is a temporary measure as you can repay the borrowing over your chosen time period
If you own a SME and you want to invest in people, premises or stock, a business loan can be a practical and cost-effective way to accelerate your growth plans.
What Can a Business Loan Be Used For?
A business loan can provide valuable capital to your business. You can use a loan to:
- Pay for day-to-day expenses
- Buy vehicles or machinery
- Hire new employees
- Buy more stock or inventory
- Buy, build or renovate property or premises
- Buy or invest in a business
- Provide a short-term cash boost
- Pay a bill or tax in instalments
- Unlock cash you’re owed from unpaid invoices
- Acquire an existing business, for example through a management buyout
- Refinance other borrowing
Advantages and disadvantages of a bank loan in business
| Pros of a business loan | Cons of a business loan |
|---|---|
| Borrow the money you need to grow your business now, rather than having to wait until you’ve generated enough profits | Eligibility criteria can be strict, and you might have to provide a business plan, accounts, and bank statements to get your application agreed |
| Can be cheaper than other borrowing options like a business credit card | You might not be able to borrow to fund day-to-day spending as lenders want to provide capital to businesses looking to invest and grow |
| Flexible as you can choose a repayment term that suits your needs | A secured loan could put your property or other assets at risk if you fail to keep up your repayments |
| Some business loan providers might offer a repayment holiday, which can help short-term cash flow issues. If you do take a repayment holiday, you'll pay more in interest overall as it will continue to accrue, and it'll take longer to pay off the loan | Might not be suitable for start-up businesses if you don’t have a trading track record to evidence |
| You'll keep control over your business and you won't need to look to investors for help. You don’t have to give away any equity in your company in return for investment | There might be an early repayment charge if you want to pay back your loan early |
Business loans alternatives
If you don't think a business loan is for you, there are some other funding options available.
Business credit cards
Getting a credit card for your business can be a quick way to access smaller sums of money.
Business credit cards sometimes offer an interest-free period on purchases, which can be helpful when trying to manage cash flow.
Business overdraft
Some business current accounts have interest-free overdrafts or charge a fairly low APR.
Crowdfunding for business
Using crowdfunding investment to help start or grow your business is another way to access finance. Platforms like Crowdcube allow anyone from individuals to professional investors to invest in start-ups and growth businesses.
Invoice finance
Invoice finance means taking out a loan against money that your customers owe you.
Frequently asked questions
Am I eligible for a business loan with poor credit?
Yes, you might be able to get a business loan with a poor credit rating. You're more likely to get approval for a secured loan, where you've put up an asset as collateral. Expect higher interest rates and lots of checks on your business for a lender to be comfortable though.
How long does it take to get a business loan?
When you compare business loans with us, it takes just a few minutes to see what loans are available. You can also apply online for your selected loan.
Does a business loan affect personal credit?
If your business operates under sole trader status then from a lender’s point of view you and your business are the same entity.