Compare the best business loans and financing of 2023

If you're self-employed, a sole trader or a freelancer, launch or grow your small business by comparing finance options from UK lenders.

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Capital on Tap Business Credit Card

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  • No annual fee
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Representative example: When you spend £1,200 at a purchase rate of 35.15% (variable) p.a., your representative rate is 35.15% APR (variable). Optional upgrade to Business Rewards (£99 per year). Terms apply.
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Barclaycard Payments Select Cashback Business Credit Card
27.5% APR representative (variable)
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35.15% APR representative (variable)
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Compare business loans

Table: sorted by loan terms, promoted deals first

Name Product Loan type Loan amounts Loan terms Turnover/trading criteria Key benefit
Funding Options Unsecured Loan
Unsecured loan
£1,000 to £15,000,000
6 to 360 months
£100,000 per annum minimum turnover,
minimum 12 months trading
Representative example: Borrow £50,000 over 24 months at a rate of 7.63% APR. Monthly repayment of £2,252.94 and the total amount payable is £54,070.56.
Nest Unsecured Business Loan
Fixed rate Unsecured loan
£10,000 to £5,000,000
6 to 120 months
£200,000 minimum turnover,
minimum 12 months trading
iwoca Flexi-Loan
Variable rate Unsecured loan
£1,000 to £500,000 *start-ups up to £10,000
1 to 24 months
£25,000 per annum minimum turnover,
minimum 6 months trading
Representative example: Borrow £10,000 over 12 months at a rate of 40% p.a. (variable). Representative APR 49% and total payable £12,294.
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More often than not, you need money in order to make money. A business loan can give a company the capital it needs to get off the ground or to get to the next stage of its evolution. That might require just a few thousand pounds or hundreds of thousands, for a couple of months or a couple of decades. There’s a range of lenders out there to cater to the full spectrum of what you need.

Companies usually apply for a business loan when they need to borrow cash or capital from a bank. The amount is repaid with interest and fees may apply. Government-backed start-up loans are also available.

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Merchant cash advance

Access a lump sum of funding upfront for a fixed cost and then repay when your customers pay you.

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Business credit cards

Boost your spending power, track employee spending and enjoy perks and rewards with a business credit card.

Capital on Tap Business Credit Card (+optional Business Rewards)

Business funding for the real world

  • Up to 1% cashback or 1 Avios per pound spent
  • Up to 10,000 bonus points when you spend £5,000 in 3 months
  • Unlimited free company cards for employees and partners
  • Up to 56 interest-free days on purchases each billing cycle

Representative example: When you spend £1,200 at a purchase rate of 35.15% (variable) p.a., your representative rate is 35.15% APR (variable). Optional upgrade to Business Rewards (£99 per year).

How do business loans work?

There are different types of business loans that work in different ways. What type you opt for can depend on what stage your business is at, amongst other things.

Much like an individual, a company has a credit record and credit score. The healthier these are, the easier it will be to secure finance. A new business is obviously not going to have much in the way of credit history, so a lender will either want to start small, or will need some form of security. Loans for launching a new business or for a business which has just launched are often referred to as “start-up” loans. These are typically available over terms of one to five years, and can be government-backed.

More mature businesses have a variety of loan options, thanks to a credit history, a few years of accounts and an established turnover. These are in addition to other types of credit available such as business credit cards or factoring. Let’s take a look at some of the main loan options available in a little more detail.

Pros and cons of business loans

Business loans can be a good option if you’re looking to borrow a large amount of money over a longer period and at a lower price than a business credit card. However, this isn’t the most flexible option and it can sometimes be hard to qualify for the eligibility criteria.

Pros

  • Large borrowing amounts are available and you’ll typically receive the money upfront, great for a big or one-off project, like expanding your business or hiring new staff.
  • You’ll know how much you’ll pay in interest and how much your monthly repayments will be from the get-go.
  • Lower rates than a business credit card (subject to status).
  • Good option for borrowing long term. Some lenders may allow you to borrow over up to 25 years.

Cons

  • Not very flexible – you need to know how much you’ll need to borrow when you apply.
  • The minimum loan amount may be more than you need to borrow.
  • Potential early repayment charges.
  • Some lenders have strict eligibility criteria based on revenue, credit score and the type of business.
  • Lenders may require collateral and a personal guarantee.
  • There are better solutions for cash flow issues.
  • Not all lenders are transparent with their rates upfront.

How can I find the best business loan for my company?

Here are some of the key features to consider when comparing business loans:

  • Amounts available. Having set out your business plan, you should know how much you need to borrow, and one of the first things to look at when evaluating a loan is whether or not it can offer you the sum that you need.
  • Terms available. You may have a fairly clear idea of the length of time you want or need to borrow for, or this factor may be dictated by the size of the monthly instalments.
  • Eligibility. Never apply for a loan without checking that the business is eligible for it. It’s a waste of time and demoralising – and the rejection could be visible to future prospective lenders.
  • Security required. It’s not unusual for lenders to ask for a personal guarantee – meaning an individual will be personally responsible for the loan. Security can also take the form of a company’s realisable assets, such as a property, vehicles or equipment. Where no assets are available, it may be necessary to secure the loan on a director’s own property.
  • Total costs. It can be easy to obsess over APRs (rates), but perhaps more importantly, consider how much the loan is going to cost overall. When you’re trying to identify the best business loan, the loans that are cheapest overall are naturally a good place to start.
  • Interest rates. Is the rate offered variable or fixed? Is it competitive?
  • Fees. Look out for “product” or “set-up” fees as well as any annual/monthly account charges. Lenders sometimes offset an attention-grabbing low rate with product fees, so it’s crucial to also keep an eye on the total amount payable.
  • Repayment holidays. Repayment holidays are set periods when you don’t have to make any repayments. This might be, say, the first three months of a loan. This can give your company an opportunity to get back on its feet financially, but will usually extend the term of the loan by the same number of months, pushing up the overall cost of the loan.
  • Early repayment terms. It’s hard to predict what’s around the corner, let alone three or four years down the line. If the option to repay early is important to you, you’ll need to check the early repayment (or overpayment) terms of the specific product or products you’re considering. It’s important to note that “No early repayment fees!” does not necessarily mean that repaying early will save you money on interest.

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Frequently asked questions

We show offers we can track - that's not every product on the market...yet. Unless we've said otherwise, products are in no particular order. The terms "best", "top", "cheap" (and variations of these) aren't ratings, though we always explain what's great about a product when we highlight it. This is subject to our terms of use. When you make major financial decisions, consider getting independent financial advice. Always consider your own circumstances when you compare products so you get what's right for you.

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