Bank of Scotland

Bank of Scotland business loans

Whatever the size and turnover of your business, financial powerhouse Bank of Scotland could have a funding solution to suit your needs.

Bank of Scotland is a direct lender, not a broker. Bank of Scotland is a member of the Lloyds Banking Group which includes Halifax, Lloyds Bank, Scottish Widows as well as other subsidiaries. The group has a strong nationwide presence; it has the largest network of branches in the UK and serves over 30 million customers.

Whether you’re just starting a business or you run a multinational company, Bank of Scotland could help with a fast and transparent business loan. It’s quick and straightforward to apply.

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Bank of Scotland loan options

Bank of Scotland offers several types of business loans, depending on the turnover of your business.

For small businesses (turnover of £0 to £3 million):

  • Base rate loan: Borrow £1,000+ with an unsecured loan over 1-25 years. The interest rate is linked to the bank’s base rate so will go up or down as the base rate does.
  • Fixed rate loan: Borrow £1,000 to £50,000+ over 1-25 years with fixed monthly instalments. This option may make it easier for you to budget, as your repayments will not change over the term of the loan. You can choose to fix the interest rate for a period of one year up to the full term of the loan.
  • Asset finance: This allows you to purchase essential equipment to drive your business forward without tying up your cash.

For medium-sized businesses (turnover of £3 million to £25 million):

  • Base rate loan: Borrow £1,000+ with an unsecured loan over 1-25 years. The interest rate is linked to the bank’s base rate so will go up or down as the base rate does.
  • Fixed rate loan: Borrow £1,000 to £50,000+ over 1-10 years with fixed monthly instalments. This option may make it easier for you to budget, as your repayments will not change over the term of the loan.
  • Capped base loan: Borrow £50,000 to £1 million over 5-25 years.
  • Commercial fixed rate loan: Borrow £50,000+ over 1-25 years. The interest rate can be fixed from one year up to the full term of the loan.
  • Invoice financing. If your cash flow is being restricted by late paying customers, then invoice finance can help you to unlock the cash tied up in your unpaid invoices. It can release up to 90% of the value of an invoice, usually within 24 hours of it being raised.
  • Asset finance: This allows you to purchase essential equipment to drive your business forward without tying up your cash.

Key features of a Bank of Scotland business loan

  • Borrow £1,000 to £50,000+. Choose a loan to suit the size and needs of your business.
  • Repay over 1-25 years. The term of your loan will depend on the size and needs of your business as well as your budget for repayments.
  • Fixed or variable interest rates. Your interest rate can either be linked to the bank’s base rate, which could move up or down over time, or you can fix it so that your repayments remain the same.
  • Capital repayment holidays. If you find that your revenue takes a dip, you can opt to take a break from paying off the capital of your loan and just pay the interest.
  • Arrangement fee. Bank of Scotland will charge you a one-off fee, which is a small percentage of your loan.

The interest rate you are offered will depend on factors like the amount you want to borrow, the loan term, the performance of your business and its credit rating. This may differ from the advertised “Representative APR”.

What is APR?

If you’re comparing any credit-based products, it won’t be long before you’ll come across the annual percentage rate (APR). This figure is designed to provide an annual summary of the cost of a loan. It takes into account both the interest and any mandatory charges to be paid (for example an arrangement fee) over the duration of the loan.

All lenders must calculate the APR of their products in the same way, and they must tell you the APR before you sign an agreement, so for consumers, it can be a handy tool for comparison.

Bear in mind, however, that lenders are only obliged to award this rate to 51% of those who take out the loan – the other 49% could pay more. That’s why it’s often referred to as the “representative” APR.

Am I eligible for a Bank of Scotland business loan?

You should only apply for a Bank of Scotland business loan if you’re certain you can meet the repayment terms. You must also:

  • Be aged 18 or over
  • Require the loan for business use

How can I apply?

You can get a quote for a business loan on the Bank of Scotland website without affecting your credit rating.

Once you have provisional approval, you can formally apply by calling the customer helpline. Bank of Scotland is likely to ask you for the following information:

Borrowing requirements

  1. How much you want to borrow.
  2. How long you would like to borrow for.
  3. Why you want to borrow.
  4. How you will repay your loan.

Information about your business

  1. A profile of your business, the owner and/or management team including experience, expertise and track record.
  2. How much you and/or the management team have got personally invested in the business.
  3. Where the assets being offered as security are located, together with details of the assets, including an accurate estimate of their value (professional valuations will be required in some instances).
  4. Whether you have any other borrowing commitments.

Additional information

Depending on your borrowing request, Bank of Scotland may also ask you to provide:

  • Business plans (usually covering the term of the loan).
  • Cash flow forecasts (usually covering the term of the loan).
  • Details of your business assets and liabilities, including any additional income from other sources.
  • Management accounts.
  • Historic financial accounts (for example, profit and loss, balance sheet and cash flow statements).

Frequently asked questions

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