Compare The Best Business Loans
Compare the interest rates, funding available, fees, available terms and eligibility requirements of the best business loans for UK SMEs.
Written by Harry Jones
Edited by Andrew Parry
Updated: 13th November 2025
These tables provide a summary of some of the best business loans for UK businesses.
Best Loans for Small Businesses
Lender & Product | Typical Amounts | Term | Funding Speed | Features | Details | |
|---|---|---|---|---|---|---|
 | Funding Circle Business loan | £10,000 to £500,000 | 1 to 6 years | Typically within 2 days |
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 | Nationwide Finance Business Loan | £6,000 to £10m | 1 to 6 years | Within 1 day |
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 | NatWest Small Business Loan | £1,000 to £100,000 | 1 to 7 years | Within 1 day once approved |
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 | Love Finance Small Business Loan | Up to £750,000 | 3 months to 6 years | From 4 hours |
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Best Secured Business Loans for £100k+
Lender & Product | Typical Amounts | Term | Features | Details | |
|---|---|---|---|---|---|
 | Barclays Secured Business loan | From £100,000 | Up to 25 years |
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 | Time Finance Business Loan | Up to £500,000 | Up to 5 years |
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Unsecured Business Loans
Unsecured business loans do not require collateral, but most providers will usually request a personal guarantee from one of the company directors. Some types of unsecured business loans include a revolving credit facility, a business credit card or a merchant cash advance.
Term loans are the most traditional type of unsecured business loan in which a specific amount of money is borrowed for a predetermined duration. An interest rate is established, and repayments are made on a consistent schedule (usually monthly). This structure facilitates budgeting; however, it offers limited flexibility to accommodate changing financial needs.
Unsecured Start-Up Loans
A Start Up Loan is a government-backed personal unsecured loan, provided by The Start Up Loans Company (part of the British Business Bank). The scheme is designed to help entrepreneurs who have been trading for less than 36 months start or grow a UK business, and is suited to those who struggle to secure finance from other banks due to limited trading history.
Key features:
- Borrow from £500 to £25,000 per applicant.
- Fixed interest rate of 6% per annum.
- Repay the loan over a term of 1-5 years.
- No application fee or early repayment fee.
- Includes access to mentoring and support.
Other types of unsecured business finance
An unsecured business loan is not the only option for your company to borrow money without providing collateral. You could also consider the following:
Revolving credit facility
This functions similarly to a pot from which you can withdraw funds. A credit limit is agreed and you may utilise it as required. Interest is only charged on the amount you have drawn and for the duration until it is repaid. This arrangement is ongoing, and there is typically a fee for non-utilisation.
Business overdraft
An overdraft enables you to exceed the balance of your bank account. It serves as a short-term safety net, with interest accruing daily on the overdrawn amount. Generally, there is no fee for non-utilization.
Business Credit Cards
Business credit cards are a popular type of unsecured business finance that can be the cheapest when you can the balance is paid off in full each month to avoid any interest being applied.
Introductory purchase periods are often available from many providers. Always compare the representative APR and fees, and establish a clear plan to avoid interest charges after any promotional period.
Merchant Cash Advance
Using a merchant cash advance, businesses can receive a lump sum of cash against their future credit and debit card sales. It is one of the fastest and easiest types of funding to obtain, but it is also generally one of the most expensive.
Secured Business Loans
Secured business loans are typically used for larger amounts and longer terms. Security can be a legal charge over a property asset, a debenture over business assets, or specific asset security.
Invoice Finance (Factoring or Discounting)
Invoice finance involves selling your outstanding customer invoices (accounts receivable) to a third-party company at a discount to obtain immediate cash.
Asset Finance
Asset Financing is for acquiring specific equipment, machinery, or vehicles. The asset itself is often security for the finance.
What is a personal guarantee when is it required?
A personal guarantee is a legally binding promise in which a business owner, director, or shareholder accepts personal responsibility to repay the business’s debt if the business is unable to do so.
Personal guarantees are required in situations where the lender feels the primary risk is too high without this added layer of security.
The following are typical situations when a personal guarantee is required:
- An SME applies for an unsecured term loan but has a trading history under 12 months.
- Revolving facilities and working capital products are applied for.
- The company’s credit score is weak.
Growth Guarantee Scheme (GGS)
During the spring 2024 Budget, the Chancellor announced the Growth Guarantee Scheme (which replaces the Loan Recovery Scheme) will provide approximately £500m of funding, through accredited lenders, to small businesses that need support with cash flow due to changes in global tariff rates.
Key features:
- Borrow up to £2m per business.
- Pricing varies and is lender-specific.
- Repay the loan over a term of 3 months to 6 years.
- Supports term loans, overdrafts, asset finance, invoice finance and asset-based lending facilities.
- The British Business Bank maintains the scheme guidance and the list of accredited lenders.
- Guarantee is to the lender: The scheme provides a 70% government-backed guarantee to the lender against the outstanding balance of the facility. The borrower remains 100% liable for the debt at all times.
How much is a £10,000 loan per month in the UK?
The monthly repayment amount for a £10,000 UK business loan can vary significantly based on two key factors:
- The Annual Percentage Rate (APR) / Interest Rate: This depends heavily on your credit profile and the type of lender.
- The Loan Term: How many months or years you take to repay the loan.
Estimated Monthly Repayments for a £10,000 Loan
The table below shows the estimated monthly payment and the total cost (principal + interest) for £10,000 borrowed over 3 years (36 months) and 5 years (60 months) at typical UK business loan interest rates.
| Loan Term | Example APR (Rate) | Monthly Repayment | Total Repayable | Total Interest Paid |
|---|---|---|---|---|
| 3 Years (36 Months) | 6% (e.g., Start Up Loan) | £304 | £10,952 | £952 |
| 5 Years (60 Months) | 6% (e.g., Start Up Loan) | £193 | £11,600 | £1,600 |
| 3 Years (36 Months) | 11.2% (Typical Bank Rate) | £329 | £11,833 | £1,833 |
| 5 Years (60 Months) | 11.2% (Typical Bank Rate) | £220 | £13,205 | £3,205 |
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Eligibility Criteria
Business Plans
Some lenders may require a business plan depending on the loan term and amount. A well-structured business plan that clearly presents the purpose of the loan and explains how it will support future business profitability and growth will help lenders assess loan eligibility.
Your plan should include both current and projected financial statements, demonstrating that your business has sufficient cash flow to cover both ongoing expenses and the new loan payments.
Financial statements and trading history
Some lenders will need to analyse your business’s financial health by reviewing profit and loss statements and balance sheets. The more trading history you can demonstrate, the more accessible funding becomes.
High street lenders tend to require at least 12-24 months of trading history. Fintechs may consider shorter track records or rely on transaction history.
Affordability and cash flow
Some lenders will assess affordability and cash flow; they may model debt service against historic and projected cash flows. You may be asked to provide projected cash flows, turnover, and profit for the next 12 months.
Some business finance will assess affordability on transaction history; for example, merchant cash advances are based on past card sales.
Business Credit Score
Your business credit score may be checked to assess your credit history and ability to manage debt. Measured by UK agencies (such as Experian or Equifax), a high score will give you access to the best terms, whereas a low score indicates a history of late or missed payments, signalling a high-risk borrower. Lenders will also often check the personal credit of directors/owners.
Pre-qualifying or eligibility tools typically use a ‘soft’ credit check, which will not affect your credit score and will not be reflected in your credit search history. However, completing a full lending application may impact your credit score and be reflected on your credit report.
Adverse Credit History
An adverse credit history, including unsettled CCJs or bankruptcy, is likely to result in automatic rejection by banks. However, some specialist lenders may approve the loan at a higher interest rate.
Collateral
Many lenders require collateral to secure the financing. This involves taking a legal charge over a personal or business asset, such as property or equipment.
If the business defaults on loan repayments, your assets will be at risk, as the lender can seize them to repay the outstanding debt. Unsecured loans usually require a personal guarantee from directors. Is it hard to get a business loan?
Is it hard to get a business loan?
Your chances of success when applying for a business loan depend on two factors: your business’s financial and trading profile and the type of business loan that you are applying for.
Lenders are primarily risk-focused. The harder it is to prove your business can reliably repay the loan, the harder it will be to get approved.
What is the easiest business loan to get approved for?
If speed of approval and receipt of loan funds is a primary consideration, then specialist online and alternative lenders are the better choice, rather than traditional high-street banks.
These alternative fintech lenders can expedite the approval process by utilising open banking integrations and automated underwriting systems. The use of digital statements, often integrated directly to your bank account or accounting software, reduces manual review and speeds up the approval time from weeks to hours.
The fastest business lenders can often process and fund loan applications in is 24 to 48 hours.
To maximise your chances of getting funded within 24 hours, ensure you have the following information available before you apply:
- Digital statements: The last 6 to 12 months of your business bank statements and management accounts (ready to be uploaded or viewed digitally via an open banking integration).
- Director information: Proof of identity, your personal details (DOB, address history, etc.) and those of any other directors who will provide a personal guarantee.
- Company ID: Your Company Registration Number (CRN) and VAT number (if applicable).
| Type of Finance | Approval Difficulty | Typical Requirements |
|---|---|---|
| Traditional Bank Loan | High (especially for unsecured) | Strong business credit score, 2-3+ years of trading history and profitability, solid business projections, and often requires a personal guarantee. |
| Secured Loan | Moderate-Low | Lower risk for the lender, as you provide collateral (e.g. property/assets). |
| Alternative/Online Lender Loan | Moderate | Faster approval, less stringent trading history requirements (6-12 months is sometimes sufficient). However, interest rates can be higher than those of a bank. |
| Asset Finance (Equipment) | Low | High approval rates (often 90%+). The asset itself (e.g., machinery, vehicle) serves as collateral, thereby reducing the lender’s risk. |
| Invoice Finance (Factoring) | Low | Approval is based on the creditworthiness of your customers, not just your business. A suitable option for rapidly growing B2B businesses. |