For years, competition has been heating up among Britain’s banks and other financial institutions to offer UK businesses the funding they need to consolidate and grow. Business loan rates now start from just 1.9%.
This once closed world, operated like a cartel of High Street banks, has in the last decade been thoroughly disrupted by fintech companies and non-mainstream financial institutions. The result – UK companies now can access some of the lowest business loan rates for decades on more favourable terms than ever before.
Competition creates choice for business owners and it’s the abundance of companies now in the market which has created its own problem. With so many deals on business loans, which is the best option to choose?
Just as with personal lending, all of the companies we list and compare on this page have their own target audiences – the types of businesses they’re best suited to serve. Without a real insider knowledge of each company, you may waste time and effort making application after application to different banks and financial institutions while still not securing the best deal for your business.
If you fill in the form at the top of this page, our team will work to find you the lender and the product which is the best value and most suitable match for your business with the most competitive rates and the most favourable terms. By choosing the correct lender, your business could save thousands of pounds in interest payments. Our service is free, you’ll find our staff friendly and intelligent, and there’s no obligation on you to accept any quote we find for you.
In this article, we share with you:
- the top 19 lenders in the UK with quoted business loan rates listed from cheapest to most expensive
- the five main types of business loan finance available to companies
- business loan rates explained – how much will your business pay
- the pros and cons of taking out a fixed-term business loan
- synopses of the latest offers from 19 of the UK’s top business loan providers
- your most frequently asked questions about business loans and business loan rates, and
- how to find the best business loan rates for your business
Business loan rates – yearly
Please find below the latest offers on business loans made by 19 of the UK’s leading banks and financial institutions.
| Company | Minimum loan | Maximum loan | Interest rate | Interest rate max | Interest applied | Minimum term | Maximum term |
| Funding Circle | £10,000 | £500,000 | 1.90% | 21.90% | Yearly | 6 | 60 |
| Esme | £10,000 | £250,000 | 3.24% | 22.20% | Yearly | 12 | 60 |
| Selina | £25,000 | £400,000 | 4.95% yearly representative | 6 | 60 | ||
| Nucleus | £3,000 | £150,000 | 5.00% yearly minimum | 3 | 84 | ||
| Start Up Loans | £1,000 | £25,000 | 5.90% yearly representative | 12 | 60 | ||
| HSBC UK | £1,000 | £25,000 | 7.40% yearly representative | 12 | 120 | ||
| Alius Finance | £10,000 | £1,000,000 | 7.59% yearly minimum | 3 | 60 | ||
| Think Business Loans | £25,000 | £1,000,000 | 8.80% yearly representative | 1 | 120 | ||
| Santander | £2,000 | £25,000 | 8.90% yearly representative | 12 | 60 | ||
| Lloyds Bank | £1,000 | £500,000 | 9.30% yearly variable representative | 1 | 300 | ||
| Funding Xchange | £1,000 | £500,000 | 9.51% yearly representative | 6 | 60 | ||
| Capital On Tap | £1,000 | £50,000 | 9.90% yearly minimum | 1 | 12 | ||
| Yorkshire Bank | £10,000 | £150,000 | 10.20% yearly representative | 12 | 60 | ||
| NatWest | £1,000 | £50,000 | 10.49% yearly representative | 12 | 120 | ||
| Fleximize | £5,000 | £500,000 | 42.20% yearly representative | 1 | 48 | ||
| Iwoca | £1,000 | £200,000 | 49.00% yearly representative | 1 | 12 | ||
| Capify | £3,500 | £150,000 | 67.89% yearly representative | 6 | 10 | ||
| Together | £26,000 | £5,000,000 | Individual to each applicant. Representative APR not displayed | 12 | 360 |
Business loan rates – weekly repayments
| Company | Minimum loan | Maximum loan | Interest rate | Interest rate max | Interest applied | Minimum term | Maximum term |
| Boost Capital | £3,000 | £500,000 | 1.50% | 4.00% | per month | 4 | 18 |
Business loan rates tables – what they mean
- Company – this is the name of the institution offering the loan
- Minimum loan/maximum loan – the smallest and the largest loans on offer to businesses via that bank or financial institution
- Interest rates – on three of our listings, we shown the lowest interest rate offered, the highest interest rate offered, and the frequency with which that interest rate is applied.
On the rest of our listings, we show either the yearly minimum (the lowest interest rate advertised by the bank or financial institution) or the yearly representative (the lowest interest rate offered to at least 51% of borrowers)
- Minimum term/maximum term – the shortest and the longest lengths of time you’re allowed to pay the loan back over.
The five main types of business loan finance
In the UK in 2020, five types of business loan finance dominate the market. This article covers the three types of financial product listed first – the fixed-term traditional bank loan, the fixed-term non-mainstream specialist lender loan, and peer-to-peer business loans.
We list the other two because, from time to time, one of them may be more suitable or accessible for specific companies. Borrowing money for your company is a calculated risk on its future growth and prosperity so we feel that it’s important for you to have all the information you need to hand to make the right decision.
Fixed-term traditional bank loan
A fixed-term traditional bank loan is a financial product offered by the major bank brand names commonly associated with having a branch network throughout the UK. We have included HSBC, Santander, Lloyds, Yorkshire Bank, and NatWest as, following our analysis, we feel that their loan products are attractive and flexible enough to make our list.
Limited companies make applications for business loans from traditional banks.
In many cases, you will have to make a case to your business manager meaning that you might have to prepare a business plan and financial forecasts for up to the next three years. If you already use that bank’s current account services, you may have a better (or worse) chance of being approved for the loan depending on how you have conducted your account during your time with them.
When applying to the bank, you’ll need to let them know how much money you want your limited company to borrow and how long you want to pay it back over. Your bank will usually insist that, if your loan is approved, that the money is paid into your business current account and that your repayments are collected from the same account.
As a company shareholder and director, you will likely be asked to sign a personal guarantee (sometimes called a director’s guarantee). This will mean that, should your business fail, you and any other shareholder and directors will be personally, jointly, and severally liable for settling any remaining balance on your loan.
Most traditional bank loans allow you to make overpayments or to settle the loan early without any financial penalty.
If you’re applying for a fixed-term traditional bank loan as a sole trader, you will likely have to go through the same process requesting funding. Please remember though that debts incurred by sole trader businesses are automatically assigned personally to sole traders themselves meaning that, if your business fails, you will almost certainly be expected to find the money yourself to pay off the outstanding balance on your loan.
Fixed-term non-mainstream specialist lender loan
Fixed-term non-mainstream specialist lender loans share virtually all of the same features in a fixed-term traditional bank loan. You borrow a set amount of money and make repayments on the loan usually once a month for an agreed period of time. Once the final payment has been made, the debt is settled and the loan account is closed.
You can apply for most non-mainstream specialist lender loans online. There is, in most cases, no need for you to travel to a lender’s office and they will accept scans of any documentation and paperwork that you would otherwise have to take into your bank.
Some non-mainstream lenders are “fintech” companies. With fintech companies, there is often no need to provide any company documentation nor prepare any business plan or financial forecasts.
The fintech companies used sophisticated algorithms which consider thousands of different factors instantly (from what’s on Companies House about you to the performance of other businesses in your area to the performance of your competitors) when making their decision. They use an adapted version of the technology which allows many personal loan companies to approve your loan within seconds based upon the information you provide on a form that only takes one or two minutes to fill out.
Very young businesses and businesses with bad credit ratings are much more likely to be approved by a non-mainstream lender or a fintech company. Some of the lenders we have listed on this page will consider offering loans to business with only six months’ trading history.
Although banks approve a high proportion of the loans they’re asked to fund, it is fair to say that you are more likely to be accepted for a business finance facility if you apply to a non-mainstream lender or a fintech company.
Peer-to-peer fixed-term business loan rates
Peer-to-peer companies also offer loans to businesses but, rather than accessing a central pool of saver funds like a bank does, they invite individual investors as well as institutional investors to fund the loans companies are seeking.
They usually do this via an internet platform – a business seeking funding will post details online about itself and then it’s up to them to market their proposition both on and off the platform to potential investors.
The one peer-to-peer lender on our list, Funding Circle, also finishes top as its lowest business loan rate is 1.9% – way below most of their competitors.
Unlike other platforms which simply host companies’ requests for funding (subject to fraud checks), Funding Circle’s team of underwriters must vet your loan before it is listed on the platform. This means that, depending on the opinion of the underwrite considering your case, your loan may not be listed at all.
If your loan request does pass underwriting, it will then be listed on the platform. Because Funding Circle is so well established and its internal vetting procedures have won the confidence of both private and institutional investors, every loan request listed on the platform is fully funded.
Loans offered by Funding Circle and their competitors follow the same model as the business loans offered by banks, fintechs, and non-mainstream financial institutions – a set amount of money will be lent to the borrower and the borrower must meet all the monthly repayments on the loan in time and in full until the last payment has been successfully made.
Nearly all loans originating on peer-to-peer platforms require a personal guarantee – the same as with loans from banks, fintechs, and non-mainstream institutions.
Invoice factoring and discounting
Invoice factoring and discounting is a completely different form of finance which is used daily by tens of thousands of companies in the UK.
Invoice factoring is best suited to companies which invoice their customers and ask them to pay back on a given date in the future – in Britain, the standard length of time given to each customer is 30 days. Every year, thousands of British businesses fail because they don’t get paid on time meaning that they don’t have the money in the bank to pay wages, pay suppliers, meet their liabilities to HMRC, and more.
When you allow a customer time to pay, you are in essence acting like a bank when you give an individual 30 day’ credit – you’re making an interest free loan to a customer in the belief (sometimes mistaken) that they’ll pay you on the date listed on the invoice.
Invoice factoring removes that risk from you. As soon as you issue an invoice to a client, you send it to your factorer. Within 24 hours, they’ll pay up to 90% of the value of the invoice direct into your business bank account. When the customer does pay, they pay you the remainder minus their fee (similar to the fee you’d pay to process a credit card).
What if the customer doesn’t pay? The factorer will then reclaim that money from future advances. If this is a major concern, you should ask about “non-recourse factoring” – you keep the money regardless of whether the customer pays or not but you pay a higher fee for this service.
Some invoice factorers ask for a personal guarantee whereas others do not. Find out why that’s important in the FAQ section at the end.
Merchant cash advance
Merchant cash advances have been available to American businesses for decades and they started to appear here in the UK in 2007 and 2008.
More and more companies now accept credit and debit cards from their customers. A merchant cash advance allows you to “borrow” up to 4 months of revenue from predicted future credit and debit transactions based upon how much you take on cards on average each day.
Whenever you take payments by debit or credit card, the money then clears in your account a day or two later paid in one lump sum. With a merchant cash advance, the same happens but taken from every settlement is a cut of normally between 6% and 10%. The cut is taken every time a settlement is paid in until the loan (plus factor) is paid off in full.
Merchant cash advance loans are expensive in comparison to most of the loans listed on this page. Instead of applying an interest rate, they apply a factor. The factor might be 1.1 (in which case the fee for the money you borrow is 10%) or 1.4 (in this case 40%). A merchant cash advance of £10,000 with a factor of 1.3 would require you to repay £13,000 in total.
Merchant cash advances are popular with younger companies and with companies whose owners may have a poor personal credit rating. In most cases, a personal guarantee is not needed when you apply for a merchant cash advance.
Business loan rates – how much will your business loan cost?
Longer term versus shorter term business loans
With your business loan, you can choose the length of time you want to pay the money you borrow back. With the lenders listed in this article, terms of between 1 month and 30 years are on offer.
By borrowing money over a longer period of time, you reduce the monthly or weekly repayments. However, you will pay more interest overall when you borrow for longer.
Fixed rate versus variable rate business loans
Most of the loans offered by the banks, fintechs, and other financial institutions listed in this article offer fixed rate loans – this means that the size of your repayments won’t change over the term of the loan even if the Bank of England base rate moves.
For business loans on variable rates, your monthly repayments will go up or down if the base rate goes up or down. You should check that a business loan you want to take out is affordable if there is a sustained rise in the base rate before committing your company to it.
Secured versus unsecured fixed-term business loans
Some of the loans offered by the financial services company on this page are secured. On a secured loan, you offer collateral to the lender which it can then take ownership of if you’re unable to keep up repayments.
The collateral is then sold and the proceeds are used to pay off the remaining loan balance. Depending on the terms and conditions of your lending agreement, any surplus achieved by the sale of your asset may or may not be returned to you (minus the lender’s costs). If the sale of your collateral does not cover the outstanding balance, you should expect the lender to pursue you for the remainder.
In most cases, the collateral you offer must be a residential or commercial property with enough equity in it to cover 75% of the amount you want to borrow.
Business owners seeking secured loans will often be offered higher amounts and at lower interest rates than those seeking an unsecured loan. However, the risks of the loss of your home must be factored into your decision on which loan to take out.
Pros and cons of fixed-term business loans
Advantages
- You can spend the money how you want – no oversight from the lender at all because all they’re interested in is getting their money back
- Very convenient – even though applying through a bank means that it will take days to make a decision, turnaround times have improved greatly in recent years. With some fintech companies, you could get a decision within 5 minutes.
- Reasonable interest rates – most of the interest rates on offer compare favourably to personal loans and they’re much cheaper than debt taken out on a credit card (which is not paid off in full) or via a merchant cash advance.
- Repayment holidays – some loans may offer you the chance to stop making payments for a few months if you hit cash flow difficulties although please be aware that, in most cases, interest will continue to accrue on your loan during the holiday.
- Mostly not repayable on demand – unlike business overdrafts. Some loans may be recalled if you breach a banking covenant or action is taken to close your business down because of unpaid debt.
- Fixed interest rates – in most cases, interest rates are fixed through the term of the loan meaning that the amount collected on each repayment is predictable.
- Tax deductible – the interest paid on business loans is tax deductible in full (speak with your accountant).
- Early settlement – most loans allow you to repay the facility in full early meaning that you save interest.
Disadvantages
- Secured loans – if a loan is secured on your property, it may be repossessed if you fail to keep up with the repayment schedule on your business loan or any other credit facility attached to it.
- No guaranteed acceptance – even if you think you have a very strong business case, you are at the whim of the lenders you approach who may disagree. You may invest hours of your time and energy in preparing a business plan that doesn’t produce the result you want
- Tied-up cash – your loan repayment becomes part of your fixed costs and, depending on the size of the repayment, it may mean that your business does not have the cash to invest in new equipment, machinery, or staff without having to take more debt out.
- Variable interest rate – if you take out a variable interest rate, your repayments may go up if the Bank of England base rate goes higher.
Business loan rates available right now
Funding Circle – business loan rates from 1.9%
| Company | Minimum loan | Maximum loan | Interest rate | Interest rate max | Interest applied | Minimum term | Maximum term |
| Funding Circle | £10,000 | £500,000 | 1.90% | 21.90% | Yearly | 6 | 60 |
93,000 investors have lent £8.1bn to 77,000 small businesses around the world through Funding Circle, the world’s leading peer-to-peer commercial funding platform.
They promise a decision within as little as 5 hours on their loans – both secured and unsecured funding is available. To apply, two years’ worth of listed Companies House accounts for limited company applicants are required. For sole traders, you’ll need to supply accountant-prepared financial records.
Funding Circle charges an origination of 0.9-4.9% on loans with a period of 6 to 23 months, 2.9%-6% on loans whose terms are 24 months to 35 months, and 4.5%-6% for loans with terms of between 36 months and 60 months. You are also charged 1% of the outstanding balance as an annual service fee while your account is live. There is no early resettlement penalty with Funding Circle.
More on Funding Circle business loan rates.
Esme – business loan rates from 3.24%
| Company | Minimum loan | Maximum loan | Interest rate | Interest rate max | Interest applied | Minimum term | Maximum term |
| Esme | £10,000 | £250,000 | 3.24% | 22.20% | Yearly | 12 | 60 |
A “disruptor” brand within the RBS NatWest family of financial institutions, businesses can apply to borrow up to £250,000 through Esme. To qualify, you need to have been trading for 18 months (as either a sole trader or the director of a limited company) with a minimum annual turnover of £15,000.
For limited company applicants, you’ll need to show your last three months’ business bank statements or your last five VAT returns. For sole traders, they need both your last three months’ business bank statements and accountant-prepared financial statements.
Esme Loans attract no arrangement fees, early repayment charges, and they are confident of delivering a final decision on your application within 10 minutes.
More on Esme business loan rates.
Selina – business loan rates from 4.95%
| Company | Minimum loan | Maximum loan | Typical interest rate | Minimum term | Maximum term |
| Selina | £25,000 | £400,000 | 4.95% yearly representative | 6 | 60 |
Selina specialises in assisting customers with working capital sourcing, expansion finance, and debt consolidation funding.
Selina’s business loans of between £25,000 and £400,000 are secured and they offer rates from just 4.95%. They do not charge valuation fees, legal fees, or early repayment charges to borrowers.
More on Selina business loan rates.
Nucleus – business loan rates from 5.00%
| Company | Minimum loan | Maximum loan | Typical interest rate | Minimum term | Maximum term |
| Nucleus | £3,000 | £150,000 | 5.00% yearly minimum | 3 | 84 |
Nucleus offers its “Cash Flow Finance” loans under £75,000 over three years to business owners and loans above that amount over a five year period. As well as providing more traditional business loans, Nucleus’s service is also designed to help companies even out seasonal ups and downs in revenue collection and companies whose cash flow is lumpy.
Nucleus’s loans are unsecured but they do require customers to pay larger than average arrangement fees of between 3.5% to 5.5% of loan value.
More on Nucleus business loan rates.
Start Up Loans – business loan rates from 5.90%
| Company | Minimum loan | Maximum loan | Typical interest rate | Minimum term | Maximum term |
| Start Up Loans | £1,000 | £25,000 | 5.90% yearly representative | 12 | 60 |
With no application fee or early repayment fee on its personal loans for business purposes of between £1,000 and £25,000, the Start Up Loans Company provides funding to pre-launch businesses and companies which have been trading for 2 years or less.
The service is delivered by a number of local partners across the UK to which you’ll have to make your application. Expect a three to four month lead time between application and the money landing in your business account.
More on Start Up Loans business loan rates.
HSBC UK – business loan rates from 7.40%
| Company | Minimum loan | Maximum loan | Typical interest rate | Minimum term | Maximum term |
| HSBC UK | £1,000 | £25,000 | 7.40% yearly representative | 12 | 120 |
One of the world’s largest financial institutions, HSBC UK has offered business loans to British companies under a variety of different brand names for over one hundred years.
Loans are available to existing banking customers and customers using other banking service providers. Existing customers do have the opportunity of visiting their local branch to discuss their loan request prior to making a full application.
Your business can borrow between £1,000 and £25,000 at a representative APR of 7.40%. There is an arrangement fee of £100 for your loan and HSBC reserve the right to make an early settlement charge against you if you pay off the loan in full before the end of the term.
More on HSBC UK business loan rates.
Alius Finance – business loan rates from 7.59%
| Company | Minimum loan | Maximum loan | Typical interest rate | Minimum term | Maximum term |
| Alius Finance | £10,000 | £1,000,000 | 7.59% yearly minimum | 3 | 60 |
Offering unsecured business loans of up to £1,000,000 at a minimum yearly interest charge of 7.59% over up to 60 months, Alius provides a variety of financial products to suit the needs of businesses looking to consolidate or to grow.
During the application process, you’ll be asked to supply your and the other directors’ personal credit details, information on your trading history, your last filed account, your last six months’ bank statements and statements on turnover, cash flow, and profit and loss.
Alius aims to provide all applicants with a decision within 24 hours and it offers monthly, weekly, or daily repayment options depending on the type of loan taken out.
More on Alius Finance business loan rates.
Think Business Loans – business loan rates from 8.80%
| Company | Minimum loan | Maximum loan | Typical interest rate | Minimum term | Maximum term |
| Think Business Loans | £25,000 | £1,000,000 | 8.80% yearly representative | 1 | 120 |
Think Business Loans is a super-broker working with over 200 different commercial lenders on its panel. At the moment, it can only provide services to with businesses with 2 years’ trading history and a minimum turnover of £75,000.
Applicants can choose from asset finance products, business overdrafts, commercial mortgages, unsecured business loans, bridging loans, merchant cash advances, invoice factoring, and working capital funding.
More on Think Business Loans business loan rates.
Santander – business loan rates from 8.80%
| Company | Minimum loan | Maximum loan | Typical interest rate | Minimum term | Maximum term |
| Santander | £2,000 | £25,000 | 8.90% yearly representative | 12 | 60 |
Santander UK, part of the Spanish banking giant of the same name, is a major international provider of business banking and financial services products in Europe and around the world.
Businesses can borrow between £2,000 and £25,000 over up to 6 years at a representative interest rate of 8.9%. With Santander, there are no arrangement fees but the bank reserves the right to make a charge if you pay off your loan full in early.
There is a version of their standard business loan with a cheaper interest rate but this product is currently only to 1|2|3 Business World account customers.
More on Santander business loan rates.
Lloyds Bank – business loan rates from 9.30%
| Company | Minimum loan | Maximum loan | Typical interest rate | Minimum term | Maximum term |
| Lloyds Bank | £1,000 | £500,000 | 9.30% yearly variable representative | 1 | 300 |
Lloyds Bank, one of Britain’s financial services giants, offers a variety of different business loan products to its customers including the option to borrow at a fixed interest rate or a variable interest rate.
On most loan types up to £25,000, no early repayment or arrangement fees are charged. An instant answer is offered online to businesses requesting funding of £10,000 although the process does take longer for requests higher than that amount.
More on Lloyds Bank business loan rates.
Funding Xchange – business loan rates from 9.51%
| Company | Minimum loan | Maximum loan | Typical interest rate | Minimum term | Maximum term |
| Funding Xchange | £1,000 | £500,000 | 9.51% yearly representative | 6 | 60 |
Funding Xchange do not work with start-ups – they require all applicants to have a minimum turnover of £80,000 with 2 years’ trading history behind them.
Funding Xchange are another leading broker with access to funders and products not always available direct to customers – they work with 45 of the leading commercial finance providers in the UK. In addition to their standard commercial loan product, they offer fast business cash loans, flexible credit lines, invoice finance, merchant funding, funding for non-profit organisations and secured business loans.
More on Funding Xchange business loan rates.
Capital On Tap – business loan rates from 9.90%
| Company | Minimum loan | Maximum loan | Typical interest rate | Minimum term | Maximum term |
| Capital On Tap | £1,000 | £50,000 | 9.90% yearly minimum | 1 | 12 |
Capital On Tap’s lending to over 65,000 small businesses has helped it now surpass the £1bn benchmark – their goal is “building simple tools for real world businesses to achieve great things”.
To apply for a loan through Capital On Tap, you need to be based in the UK, have a minimum turnover of £2,000 a month, and have no unsatisfied CCJs against you or your business in the last year. Sole traders are no eligible but the company invites them to apply for their business credit card instead.
More on Capital On Tap business loan rates.
Yorkshire Bank – business loan rates from 10.20%
| Company | Minimum loan | Maximum loan | Typical interest rate | Minimum term | Maximum term |
| Yorkshire Bank | £10,000 | £150,000 | 10.20% yearly representative | 12 | 60 |
Yorkshire Bank, now part of the Virgin Money UK group, invite businesses to apply online or in branch. The application process takes about ten minutes and the bank endeavours to get back to clients within 48 hours with a final decision.
Only limited companies trading for over 12 months and with a turnover of no more than £2m can apply for the Yorkshire Bank business loan. There is a small application fee but the bank makes no charge to you for early full repayment of your loan or lump sum repayments to bring the balance down.
More on Yorkshire Bank business loan rates.
NatWest – business loan rates from 10.49%
| Company | Minimum loan | Maximum loan | Typical interest rate | Minimum term | Maximum term |
| NatWest | £1,000 | £50,000 | 10.49% yearly representative | 12 | 120 |
NatWest have already featured on this list through its Esme Loans brand. NatWest’s standard business loan is much more traditional than its Esme equivalent.
You can borrow between £1,000 and £50,000 over a period of one to ten years. Their representative APR is 10.49% however if your business is relatively new, you may be charged a higher interest rate. Businesses with turnovers of less than £2m are invited to apply for this loan.
More on NatWest business loan rates.
Fleximize – business loan rates from 42.20%
| Company | Minimum loan | Maximum loan | Typical interest rate | Minimum term | Maximum term |
| Fleximize | £5,000 | £500,000 | 42.20% yearly representative | 1 | 48 |
To apply for a Fleximize loan, you must run a limited company with 6 months’ trading history and a minimum monthly turnover of £5,000. With Fleximize, there are no arrangement, application, or set-up fees.
Your application is made online and the company offers both secured and unsecured loan options. They encourage early repayment of loans so that you save money (customers who do repay early save 44% on interest, according to the company) and they offer both repayment holidays, loan top-ups, and flexible repayment options.
Decisions are normally delivered within 24-48 hours of your application form being completed. In some cases, the company will ask you to send documentation over to support your request.
More on Fleximize business loan rates.
Iwoca – business loan rates from 49.00%
| Company | Minimum loan | Maximum loan | Typical interest rate | Minimum term | Maximum term |
| Iwoca | £1,000 | £200,000 | 49.00% yearly representative | 1 | 12 |
50,000 businesses have now used Iwoca to borrow money to invest in their business, in stock, or to support company cashflow.
Iwoca offer early repayment and top-up opportunities to customers at no extra charge. Top-ups are available when you have paid back a third of your original loan from the company.
Iwoca has invested heavily in technology in recent years meaning that they are often able to make a decision in seconds on loans for £15,000 or less. If your request is approved, they may be able to transfer the money into your account on the same or following day.
More on Iwoca business loan rate.
Capify – business loan rates from 67.89%
| Company | Minimum loan | Maximum loan | Typical interest rate | Minimum term | Maximum term |
| Capify | £3,500 | £150,000 | 67.89% yearly representative | 6 | 10 |
Capify is another recent entrant into the market seeking to provide funding to the underserved new business market. They’ll provide a company with up to 75% of its average monthly turnover and give them between 6 and 12 months to pay it back.
More on Capify business loan rate.
Together secured business loan rates
| Company | Minimum loan | Maximum loan | Typical interest rate | Minimum term | Maximum term |
| Together | £26,000 | £5,000,000 | Individual to each applicant. Representative APR not displayed | 12 | 360 |
Established in 1974, Together offer secured loans to business customers for debt consolidation and other commercial purposes.
More on Together business loan rates.
Boost – business loan rates from 1.50% per month
| Company | Minimum loan | Maximum loan | Interest rate | Interest rate max | Interest applied | Minimum term | Maximum term |
| Boost Capital | £3,000 | £500,000 | 1.50% | 4.00% | per month | 4 | 18 |
Boost Capital is one of the largest alternative business loan funding service in the UK having opened facilities for over 22,000 businesses since its launch in 2002. It won the won ‘Best Service from an Alternative Funding Provider’ award at the 2019 Business Moneyfacts Awards.
Funding can be turned around in two days – you apply for the funding online. Your company must have been trading for a minimum of 2 years with a minimum turnover of £70,000.
Boost Capital’s loans are repaid weekly. There is a 2% arrangement fee on your loan but the company offers a 6% discount for early settlement once your balance is under a certain amount.
More on Boost Capital business loan rates.
Business loan rates frequently asked question
What is a personal guarantee?
A personal guarantee is a legal pledge made by you and the other shareholders that, should your limited company fail or not be able to pay its loan back for whatever reason, you and the other shareholders will be personally, jointly, and severally liable for the repayment of any outstanding balance.
Can sole traders get a business loan?
Yes however, traditionally, sole traders have found it harder to find business loans than limited companies if they do not offer security on the loan.
How much can you borrow with a business loan?
Each business loan provider has their own minimum and maximum amount they’re prepared to lend. From the 19 companies featured in this article, the minimum amount is £1,000 and the maximum is £5,000,000.
How long can my business borrow money over?
The length of time you can repay your loan over, sometimes called the term, varies between lender. The shortest term offered by the lenders featured in this article is 1 month and the longest 30 years. Generally, terms of more than 5 years will require your company to offer security to the lender.
Can my start-up business get a business loan?
For companies which are yet to launch or trading companies in their first 2 years of existence, the government-backed Start Up Loan Company (featured in our article) may be able to help. The application process is long and you should factor a 3-4 month waiting period for receiving funding.
Most lenders require you to produce accounts for two full years and for your company to be profitable or near profitability after launch. There are some lenders which do work with younger companies though including Capify (12 months), Iwoca (6 months), and Fleximize (6 months).
What is APR on a business loan?
The annual percentage rate (APR) is a calculation used to show you how much your business loan is likely to cost you in interest, fees, and other charges during a 12 month period.
What is representative APR on a business loan?
The representative APR you may see on lenders’ and brokers’ website describes the APR offered to 51% or more of its customers. If your application is approved, the amount you’re offered made by higher or lower than the advertised APR.
Business loan rates – in conclusion
There is more money available than ever for businesses to fund consolidate and growth and to invest in new machinery and equipment to give them a competitive edge. Business loan rates are at historic lows thanks to the Bank of England’s base rate and competition between providers.
If you want help finding the right business loan for your company, please fill in the form at the top of the page. We’ll get to know you and your business and, using that information, we’ll approach the lenders most likely to want to work with you offering the cheapest rates and the most favourable terms.
Our service is free and there’s no obligation on you to accept any of the offers we find for you.