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A limited company loan is any form of business loan or finance that’s available to limited companies. This includes products like unsecured business loans, asset finance, invoice finance, business line of credit and business overdrafts.
In the UK, a limited company refers to a business where the managers of the company are distinct from the owners, as is the case with publicly listed companies.
Can limited companies get loans?
Yes, limited companies will normally be eligible for most types of business loan. This includes both loans from commercial lenders and those offered as part of the government-backed British Business Bank.
How much can a limited company borrow?
This will depend on things like your annual turnover and trading history, as well as the type of loan your company requires. Some lenders offer business loans up to £500,000, and larger businesses may be able to borrow even more.
What types of business loans can a limited company get?
You can use a limited company loan for any worthwhile business purpose, such as managing cash flow, funding growth, expanding your workforce, purchasing expensive equipment or premises or for other business-related costs.
However, certain types of business loan, such as asset finance, can only be used for specific purposes. In the case of asset finance, this would be to fund the purchase of equipment or other asset.
Am I eligible for a limited company loan?
In order to be eligible for a limited company loan, you will generally need to meet the following criteria:
Be at least 18 years old
Be a UK resident
Have a business that is registered and trading in the UK
You may also need to provide additional documentation, such as business plans and trading history, and meet certain other requirements, such as minimum annual turnover and trading history, to be eligible for a loan.
How to apply for a limited company loan
Find the type of loan you require. There are different types of loan for things like purchasing equipment or improving cash flow, so make sure you’ve first identified what you need the loan for.
Work out how much you need to borrow. It’s important to only borrow as much as your company requires to avoid expensive and unnecessary interest repayments.
Compare lenders. There are a range of commercial lenders and brokers that specialise in certain types of business loan.
Check your eligibility. Once you’ve found the right lender, confirm that your business meets its lending requirements.
Apply for the loan. Contact the lender directly in order to start your application.
Pros and cons of limited company loans
Pros
There’s a range of commercial and government-backed loans available
As a limited company, you may have more lending options than other types of business
Cons
You’ll likely need to provide detailed documentation in order to get a loan
You may be ineligible for certain types of loan
Bottom line
As a limited company, you should have a number of business loan options that can help you better manage your business. However, it’s important to first identify the specific type of loan your business requires before applying.
Frequently asked questions
You can register your limited company with Companies House via the UK government website.
Not necessarily, but you may need to provide a personal guarantee if you borrow large amounts or apply for certain types of loan.
Yes, you can still get a limited company loan even if you have bad credit, but you may find your loan options are more limited.
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Tom Stelzer is a writer for Finder specialising in personal finance, including loans and credit, as well as small business and business loans. He has previously worked as a freelance writer covering entertainment, culture and football for publications like FourFourTwo and Man of Many. He has a Master of Media Arts and Production and Bachelor of Communications in Journalism from the University of Technology Sydney. See full bio
Cubefunder offers business loans of up to £100,000 with one fixed fee. Repayments can adapt to the rises and falls of your company’s cashflow. Find out how other lenders compare.
Information about the business loans available from HSBC.
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