The lenders shown above are promoted picks, which means they’ve been chosen from among the partners we work with and are based on factors that include special features or offers and the commission we receive. Further down the page in our table, you can compare the full range of lenders we cover on our site. Keep in mind that our promoted picks may not always be the best fit for you – it’s important to compare for yourself and find a platform that works for your situation.
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 to those eligible.
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How to choose the best business loan
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.
This really depends on the loan you opt for, and the efficiency of the lender’s systems and processes. Some lenders claim to be able to issue a small business loan in a matter of hours, but more commonly the minimum turnaround time is likely to be a couple of working days. If quick access to funds is crucial for your situation, factor this into your comparison.
Having a poor credit rating may make it difficult to get a business loan, but not impossible. Here are some things you can do in this situation:
Consider a specialist lender. There are some lenders who specialise in business loans for bad credit. Typically, they will request to see that your company is growing and can afford to repay the loan.
Improve your credit score. Giving your credit score a boost could make it easier to receive a business loan. However, keep in mind that lenders will look at more than just your credit score when considering your application. Read our full guide on how to achieve this.
Consider a secured loan. Using an asset or a personal guarantee as security can lessen some of the risk for a lender. If you’re considering a secured business loan, use our guide to see if it’s the right option for your business and compare a range of secured business loans available.
To learn more about getting a business loan with a bad credit rating, read our guide.
How much you can borrow will depend on the lender’s assessment of your business. You could borrow from as little as £1,000 to £20,000,000, if you meet the requirements of the lender. Use our comparison table to see loans with a range of amounts and terms.
Our “Best for” picks highlight top options in specific categories based on our independent evaluation (see our full methodology), while “Promoted” tags indicate sponsored placements. Selected products may not suit everyone. We track selected market offers, which may not cover every product. Products are listed in no particular order unless specified, and inclusion or ordering may be influenced by popularity or commercial agreements. Most comparison table data is provided by Defaqto or sourced directly from providers. Always evaluate your own circumstances and consider independent advice before making major financial decisions.
Sometimes an unexpected opportunity presents itself or a piece of equipment can break. We look at what you can do if you need money for your business as soon as possible.
We are an independent comparison platform and information service designed to help you make better decisions. To keep our service free, we receive compensation from the companies whose products or services are featured on our site. We may receive payment when you click on links or apply for products through our platform.
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While our commercial arrangements may affect the inclusion, order, position and placement of products on our site, they do not influence our independent assessments or editorial views. The inclusion of a provider or product in content or the order in which products are displayed in tables or lists should not be interpreted as a specific endorsement or recommendation from us.
Our market coverage
We compare a wide range of products, providers, and services, but we do not cover the whole market. There may be other options available to you outside of our platform.
Not financial advice
The information we provide does not constitute financial advice. You should consider your own personal circumstances and read the provider's terms and conditions before making a decision.
We update our data regularly, but information can change between updates. Confirm details with the provider you're interested in before making a decision.
