Business finance comes in a variety of shapes and forms, and which is best for your company will depend on a range of factors. You might want a lump sum upfront, or you may simply be looking for the financial breathing room to focus on growth. This guide unpacks popular business finance products to help you home-in on the right finance for your company.
If you’re looking for ongoing access to business credit, consider the following options:
If you need the lump sum upfront, but still like the idea of ongoing, flexible credit, consider these options:
Borrowing £10,000 over 60 months will have a month repayment of £181.25, with a total repayment of £10,875. Representative APR 3.4%, fixed interest rate 3.4% per annum.
Many of these products are available for businesses with bad credit, especially for relatively lower amounts such as £10,000. Bad credit finance products tend to have higher interest rates attached, especially those that are unsecured.
| Type of finance | Security | Repayment terms | Good for | Bad for | |
|---|---|---|---|---|---|
| Business credit cards | Revolving | Unsecured | Flexible – no interest charged if you pay monthly |
|
|
| Overdrafts | Revolving | Unsecured | Flexible – but the longer you borrow the more you’ll pay |
|
|
| Business line of credit | Revolving | Secured or unsecured | Flexible – but the longer you borrow the more you’ll pay |
|
|
| Invoice financing | One-off | Secured against your invoices | Short-to-medium terms – tied to invoice payments |
|
|
| Merchant cash advances | One-off | Unsecured | Short-to-medium terms – tied to credit card takings |
|
|
| Asset financing | One-off | Secured against business assets | Medium-to-long terms – usually to repay in monthly instalments |
|
|
| Short-term business loans | One-off | Unsecured | Short terms – usually to repay in monthly instalments |
|
|
| Business loans | One-off | Secured or unsecured | Long terms – usually to repay in monthly instalments |
|
|
| 6% p.a. interest | 12% p.a. interest | 20% p.a. interest | |
|---|---|---|---|
| 1-year term | £861 | £888 | £926 |
| 2-year term | £443 | £471 | £509 |
| 4-year term | £235 | £263 | £304 |
| 6% p.a. interest | 12% p.a. interest | 20% p.a. interest | |
|---|---|---|---|
| 1-year term | £10,328 | £10,662 | £11,116 |
| 2-year term | £10,637 | £11,298 | £12,215 |
| 4-year term | £11,273 | £12,640 | £14,607 |
These services will show you which lenders would approve you for a £10,000 loan, saving time and preventing credit score damage from multiple failed loan applications.
Many broker/matching services are free, as they make their money by charging referral fees to lenders. However, it’s rare that they have access to the whole market, so you may not be recommended the best available deal.
Access a lump-sum of funding upfront for a fixed cost and then repay when your customers pay you.
Boost your spending power, track employee spending and enjoy perks and rewards with a business credit card.
Learn more about the alternatives to a traditional business loan.
Discover more about the different ways to fund your ecommerce business.
These awards recognise innovation in the areas of credit cards, loans, mortgages and BNPL. We reveal this year’s winners.
Use our business loan calculator to find out your monthly cost and total repayable amount.
See how to get a business loan as a limited company in the UK, and how much you can borrow.
Find out how to get a loan if you work for yourself, including which lenders offer business loans for sole traders.
Learn about government support and alternative options for businesses needing finance to help deal with the impact of coronavirus.
Find out if a business loan is considered income and what you can claim as a tax deduction when taking out a loan.
Businesses all over the UK face financial instability daily, which often requires outside funding. We have looked into how the state of borrowing for these businesses differs between the industry, over the years, and for the size of the business.
Get low rates, quick decisions, good customer service and plenty of flexibility through non-bank lenders.
