Compare business loans from 50+ UK lenders

How do I find the right business finance?

Finding the best deal takes preparation. Follow these steps to compare your options and secure the right funding:

1. Calculate how much you need: Work out the exact amount, including any fees or setup costs. Borrowing too much costs you in interest; borrowing too little may leave you short.
2. Decide on the type of finance: Match your need to the right product. A one-off purchase suits a term loan. Ongoing cash flow gaps suit a revolving facility or invoice finance.
3. Gather your financial documents: Prepare 2-3 years of accounts, recent bank statements and a cash flow forecast. Startups should prepare a business plan instead.
4. Compare multiple lenders: Rates, fees and eligibility vary widely between banks, alternative lenders and specialist providers. A broker can access deals you would not find on your own.
5. Check the total cost of borrowing: Look beyond the headline rate. Factor in arrangement fees, broker fees and any early repayment charges to find the cheapest overall option.
6. Apply and negotiate: Once you have your shortlist, apply to your preferred lender. If you have strong financials, you may be able to negotiate on rate or fees.

What kind of business finance do I need?

The best type of business finance depends on your situation. Here is a guide to matching your needs with the right product.

Starting a new business

Government-backed Start Up Loans offer up to £25,000 at a fixed 6% rate, with free mentoring included. If you need more capital, angel investors or crowdfunding platforms are worth exploring alongside traditional lending. Some alternative lenders will consider businesses with as little as 6 months of trading history.

Buying equipment or vehicles

Asset finance lets you spread the cost of machinery, vehicles or technology over 1-7 years. You use the asset while paying it off, and some agreements include maintenance. Options include hire purchase (you own the asset at the end), finance lease (you return it) and operating lease (includes servicing).

Managing cash flow gaps

Invoice finance releases up to 90% of the value of unpaid invoices within 24 hours. Revolving credit facilities give you a flexible credit line to draw on when cash runs short. Both are designed for businesses with irregular income patterns or long payment cycles.

Growing an established business

Term loans from £25,000 to £500,000+ suit expansion, hiring or premises upgrades. Rates improve with a strong trading history and solid financials. Unsecured business loans up to £250,000 are available for businesses with at least 2 years of accounts on file.

Quick access to working capital

Merchant cash advances repay through a percentage of your card takings, so repayments flex with your revenue. This model suits retail, hospitality and e-commerce businesses that take most payments by card and need cash within days rather than weeks.

Borrowing with poor credit

Specialist lenders consider applications with CCJs, defaults or thin credit files. Bad credit business loans carry higher rates, but options exist for most situations. Offering security or a larger deposit can help offset a weaker credit profile and bring costs down.

What types of business finance are there?

UK businesses can access a wide range of finance products. Each works differently and suits different needs. This table summarises the key features:

The right choice depends on what you need the money for, how quickly you need it, and whether you can offer security. A small business may benefit from combining several products: a term loan for a one-off purchase alongside an invoice finance facility for day-to-day cash flow. Speak to a commercial finance broker to compare the options that suit your profile and get the best rates available.

What does business finance cost?

The interest rate is only part of the picture. Business loans come with several costs you should factor into your decision:

Personal guarantees are not a fee, but they are common on business loans above £25,000. Signing one means your personal assets, including your home, could be at risk if the business cannot repay.

Always compare the total amount repayable, not just the headline rate. A loan at a lower rate with high fees can cost more overall than one with a slightly higher rate and no arrangement fee. Use a business loan calculator to model different scenarios side by side.

How can I improve my chances of getting approved?

Business loan applications are assessed on your financials, your credit profile and how well-prepared your application is. These steps can make a real difference:

• Get your accounts in order: Lenders want to see at least 12 months of management accounts, and ideally 2-3 years of filed accounts. Clean, up-to-date records show you run a well-managed business.
• Check your credit file: Both your business credit score and personal credit score matter. Check for errors and resolve any outstanding defaults or CCJs before applying.
• Write a clear business plan: For larger loans or newer businesses, a solid business plan shows lenders how you will use the funds and how you will repay them. Include detailed cash flow projections for at least 12 months.
• Reduce existing debt: Lenders calculate your debt-to-turnover ratio. Paying down existing commitments before applying can improve the terms you are offered.
• Offer security if you can: Secured loans typically offer lower rates and higher amounts. Property, equipment or a personal guarantee can strengthen your application significantly.
• Use a broker: A commercial finance broker knows which lenders suit your profile and can often access rates not available direct. This is especially valuable for complex applications or businesses with unusual circumstances.

How does a business loan work?

The process of getting a business loan is straightforward, though it varies by product type and lender:

1. Work out what you need: Decide how much you want to borrow, what you will use it for, and how quickly you can repay it. This helps you choose the right type of finance.
2. Compare your options: Different products suit different needs. A term loan works for one-off purchases; a revolving facility suits ongoing cash flow management. Use a broker or comparison service to see what is available.
3. Gather your documents: Most lenders need 2-3 years of accounts, 3-6 months of bank statements, a cash flow forecast and details of any existing borrowing. Startups need a business plan instead of trading history.
4. Submit your application: Apply through your chosen lender or broker. They will run a credit check and assess your financials. Some unsecured lenders give decisions within hours; secured lending takes longer.
5. Receive your offer: If approved, you will receive a formal offer detailing the rate, term, fees and repayment schedule. Read it carefully, especially any personal guarantee requirements.
6. Funds released: Once you accept the offer and complete any legal requirements, funds are released to your business account. Unsecured loans can complete in 1-3 days; secured lending typically takes 2-4 weeks.
7. Make repayments: Repayments are collected by direct debit, usually monthly. Keep your lender informed if you anticipate any payment difficulties, as early communication often leads to better outcomes.