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Business loans at a glance
Am I eligible?
Eligibility is determined by a mix of factors, including your company's credit rating, turnover, and trading history.
Use our eligibility checker to see how likely you are to be approved, with no impact on your credit score.
How much can I borrow?
You can borrow between £500 and £15,000,000, depending on your credit history, business finances and type of loan you need.
Compare secured and unsecured business loans from our trusted UK providers to find the best option for you.
How long does it take?
You can apply for a loan in a few minutes, while approval decisions can be instant with online banks or up to three weeks with high-street lenders.
You'll typically receive the funds between 48 hours and five days after approval.
What is a business loan?
A business loan means you can borrow a specific sum of money and pay it back, with interest, over a defined period of time.
The loan must be used for business purposes, which include:
Starting/expanding your company
Paying for stock
Hiring employees
Investing in equipment
You can also use the funds to help manage your business cash flow.
“A business loan can help you get your idea off the ground or grow what you’ve already built. With the right preparation and a quick check on your eligibility, the whole process becomes a lot smoother, letting you focus on what you really want to achieve.”
How to apply for a business loan
Before choosing your business loan, consider the following steps:
Research the type of loan you need
Decide how much you would like to borrow
Check any conditions attached to the loan
Apply for a business loan
Government-backed Start Up Loans
The Start Up Loans scheme helps small businesses in the early stages of their journey. You can borrow between £500 and £25,000 with a fixed interest rate of 7.5%. Loan terms range from 1 to 5 years.
To qualify, you need to live in the UK, be over 18 and have a UK-based business that has been trading for less than 60 months (5 years) or be planning to start one.
The government-backed scheme also offers 12 months of free mentoring to help your business. There are no application fees or early repayment costs.
See if your business is eligible for a Start Up Loan before you apply.
Main types of business loan
Secured business loan
You need to provide assets as security to cover the amount being borrowed. Assets can include property or company shares.
Usually, it is most suited if you want to borrow large amounts over a longer period.
Interest rates are typically lower than those for unsecured loans.
Unsecured business loan
Your business can borrow money without offering any assets as collateral.
If you prefer the funds to be released quickly (sometimes 3-4 days), it could be a better-suited option.
Interest rates tend to be higher as lenders take on more risk.
What other types of business loans are available?
A startup loan works in the same way as a business loan but is specifically for funding a new business or one that has been trading for less than 36 months.
Business vehicle finance helps you borrow money to purchase new vehicles for your company, turning what would be an up-front cost into a monthly cost.
Asset financing allows your business to purchase, or hire, assets such as equipment, vehicles, or machinery. You pay for the asset through instalments without investing large amounts of cash up front. The finance your borrow is often secured against the asset itself.
What other types of business loans are available?
Startup business loan
A startup loan works in the same way as a business loan but is specifically for funding a new business or one that has been trading for less than 36 months.
Business vehicle finance
Business vehicle finance helps you borrow money to purchase new vehicles for your company, turning what would be an up-front cost into a monthly cost.
Asset finance
Asset financing allows your business to purchase, or hire, assets such as equipment, vehicles, or machinery. You pay for the asset through instalments without investing large amounts of cash up front. The finance your borrow is often secured against the asset itself.
What do I need to get a business loan?
To get a business loan approved, you'll have to provide information to show you meet the eligibility criteria.
You will typically need:
To be over 18 years old
To have a UK bank account
Up-to-date accounts and bank statements
To show your credit profile
A business plan with the loan's purpose and how you plan to repay it
The credit score required to secure a business loan varies depending on your lender and the type of loan you're applying for.
How much will a business loan cost?
Before getting a business loan, it's important to understand the total cost, including the interest you'll pay.
Potential repayments:
Below are three examples² of the possible repayments with different terms and rates:
| Loan amount | APR | Loan term | Monthly repayment | Total cost |
|---|---|---|---|---|
| £25,000 | 8% | 5 years | £506.91 | £30,414.59 |
| £25,000 | 10% | 5 years | £531.18 | £31,870.57 |
| £75,000 | 12% | 5 years | £1,668.33 | £100,100.01 |
Use our loan calculator to see how much the borrowing could cost you each month.
How much can I borrow?
The amount your business can borrow will depend on a range of factors, including:
Your business credit history
Business turnover
Length of loan
For smaller businesses, lenders will typically offer loans worth up to £500,000.
Larger businesses with higher turnover are generally more likely to be accepted for loans over £1 million, but this varies depending on the lender and the business’s eligibility.
What the base rate means for your business in 2026
At the start of 2026, many forecasts predicted the Monetary Policy Committee (MPC) would lower the Bank of England base rate, which has stood at 3.75% since December 2025.
After another decision to hold in April, financial markets are pricing in the possibility of rate rises in the second half of the year. This is due to renewed concerns about inflation, particularly linked to energy costs.
Higher base rates typically lead to higher borrowing costs for businesses. That said, lenders set their own criteria and pricing, so any changes will depend on how financial providers respond to future rate decisions.
The next base interest rate decision is due on Thursday 30 July, and you can track updates on the Bank of England's explainer page.
How to boost your chances of getting a business loan
To give your company the best chance of securing funding, it’s important to keep your finances well-organised.
Lenders want to be confident that your business can repay any money it borrows, so you need to demonstrate that your company is in a strong financial position.
This means you need to have:
Up-to-date accounts
A healthy bank account history
A clear plan for how your business will use the funds
You also need to show that your company generates enough income to cover the loan repayments. Typically, lenders look for a Debt Service Coverage Ratio (DSCR) of at least 1.25, meaning your income is at least 25% higher than your company’s debt obligations.
For more information, read our expert guide on how to get loan-ready.
What can a business loan be used for?
When you apply for a business loan, you'll have to explain to the lender what you want to use the funds for.
You can generally use funds for any payments connected to your company. Common uses include:
Financing assets and equipment
Cash flow management
Paying for a property refit
Expanding your business
Stock or inventory
Consolidating debt
What can a business loan not be used for?
A business loan must only be used for purposes connected to your company. You cannot, for example, use the funds to pay for personal expenses such as holidays.
Using the money for non-business purposes could result in the loan being recalled, meaning you may have to repay the full amount. Directors who misuse business loans could also face disqualification from acting as a director.
Pros and cons of a business loan
Pros
Cons
Alternatives to business loans
A business credit card could be worth considering if you prefer not to borrow a lump sum and want a flexible way to manage short-term cash flow, unplanned costs, or staff expenses.
You can spend up to your agreed limit, and you won't pay any interest if you clear the balance in full each month.
A business overdraft lets you withdraw funds beyond the available balance in your business bank account, up to an agreed limit.
You can use it to access funds whenever you need them, helping you deal with short-term cash flow issues and pay for unexpected expenses.
Invoice finance helps your business maintain a healthy cash flow, allowing you to access money owed by your customers without waiting for the payment to arrive.
Alternatives to business loans
Business credit cards
A business credit card could be worth considering if you prefer not to borrow a lump sum and want a flexible way to manage short-term cash flow, unplanned costs, or staff expenses.
You can spend up to your agreed limit, and you won't pay any interest if you clear the balance in full each month.
Business current account with overdraft
A business overdraft lets you withdraw funds beyond the available balance in your business bank account, up to an agreed limit.
You can use it to access funds whenever you need them, helping you deal with short-term cash flow issues and pay for unexpected expenses.
Invoice finance
Invoice finance helps your business maintain a healthy cash flow, allowing you to access money owed by your customers without waiting for the payment to arrive.
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Business loans FAQs
Whether you need a business account for a business loan depends on the lender and the type of loan. Some banks may require you to have a business current account with them before they approve your loan application. However, certain loan programs, such as the government-backed Start Up Loan, may allow the loan to be deposited directly into your personal bank account instead. Always check the specific requirements of your lender to understand their policy on business accounts.
No, you don't need to be the owner of a company to get a loan. Registered company directors can apply for most business loans.
Yes, small businesses can get loans, but you may be offered different ones depending on your firm's size and revenue. For instance, only businesses that are less than three years old can get a government Start Up Loan.
Your business credit record may affect whether or not your loan application is accepted. You can find your credit score through credit referencing agencies such as Experian.
The length of time to be approved for a business loan depends on the provider, the checks they carry out, the information they need to see and how quickly you're able to provide it. It also depends on the type of loan. For example, secured loans can have longer approval times.
Yes, it is possible to get a business loan with bad credit, but it can be more challenging. Lenders typically look at your business’s financial health, cash flow, and overall stability, rather than just your personal credit score. However, you may face higher interest rates or stricter terms if you have bad credit.
It depends on the type of loan. Some UK business loans are secured, meaning you pledge assets like property, equipment, or inventory as collateral. Secured loans often offer lower interest rates and higher borrowing limits.
Other loans are unsecured. So, while no collateral is required, they may come with higher interest rates or stricter eligibility criteria.
The loan that's right for your business will depend on your financial situation, the amount you need to borrow, and how comfortable you are putting assets at risk.
Not always. Many business loans are flexible and can be used for a wide range of purposes, such as managing cash flow, purchasing equipment, hiring staff, or funding growth. However, some products come with conditions on how the funds can be used.
For example, equipment financing must be used specifically to buy equipment, commercial mortgages are limited to purchasing or refinancing property, and invoice financing is tied to the value of your unpaid invoices. Government-backed loans or grants may also require spending in approved areas, such as sustainability, training, or innovation.
Lenders will not allow loan funds to be used for illegal activities, and doing so could have serious legal consequences. Funds also should not be used for personal spending or high-risk investments. Before applying, it’s important to check the loan terms and conditions or speak to the lender to confirm what is and isn’t allowed. Misusing funds could lead to penalties or early repayment requirements.
Yes, you can, but your options may be more limited. Lenders will look at factors beyond profits, such as your personal credit history, projected cash flow, and the strength of your business plan. Some loans may require collateral or a guarantor to secure funding, while unsecured loans will place more emphasis on your creditworthiness and available funds. Having a solid plan and clear projections can improve your chances of approval.
Yes, you can usually repay a business loan early, but some lenders charge early repayment fees.
Many business loans allow early settlement in full or via overpayments to reduce your balance, which can help you save on interest. However, some providers apply early repayment charges (ERCs) or exit fees to cover lost interest, especially on fixed-term or fixed-rate loans.
Before repaying early, check your loan agreement for fees, notice periods, or overpayment limits to make sure it’s cost-effective.
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*Based on average eligibility data from trackable providers (01/05/25-31/12/25). Accurate as of 14/01/26.