Small business loans are exactly what they sound like - they're cash loans for small businesses.

As with any kind of loan, to get one of these small business loans, you'll have to meet the lender's criteria. This varies between lenders, but typically your business must not employ more than 50 people, or have an annual turnover of more than 150,000.

You can use small business loans for most business expenses, including:

  • Employee wages

  • Rent for your work premises

  • Equipment

  • Marketing

  • Training

  • Recruitment

  • Stock.


Use the comparison above to check the loan amounts each lender can offer. However, the amount you could get depends on your business' income and acceptance relies on passing a credit check.

How to get a small business loan

If you need a cash injection for your small business, you might be looking into how to get a small business loan. It's not hard to apply and is quick to do online. It doesn't take long to get the money put into your business bank account either.

Remember that to apply for any small business loans, you don't need a large turnover. You also don't need to have been up and running for a specific amount of time.

Before you can compare the cost of small business loans, you need to check:

  • That lenders can offer the loan amount you need

  • What is the representative Annual Percentage Rate (APR) that each lender offers

  • The term each lender lets you borrow over (so, how long it'll take to pay it back).


When you've got a shortlist of lenders, you can work out which small business loans will be the cheapest and most suitable for your business.

Here's more information on business loans

What kind of small business loans are there?

It doesn't matter what kind of small business you have, it shouldn't affect your chances of getting a small business loan.

Here are some examples of what you could get:

  • small home business loans

  • pub business loans

  • retail business loans

  • loans for beauty salons/salon business loans

  • and loans for all kinds of other businesses.

It can be a helpful way to boost your cashflow, grow your business or manage a period of uncertainty.

What will your business loan cost?

The amount you pay for small business loans depends on several factors. These include:

  • The amount you borrow

  • The term you choose to repay the loan

  • The APR you get when you apply.

You'll get a fixed APR for the duration of your small business loan. This'll be confirmed you go through a credit check as part of your small business loan application.

The higher the APR, the more interest you'll pay. Look at a range of small business loans to find the lowest possible APR for the amount you want to borrow. This'll cut the amount of interest you need to pay.

Some lenders have loan calculators on their site to give you an idea of your loan repayments.

Can you get a start up loan for a small business?

Yes, but if you need small business funding for a start up you may need to apply for a start up business loan instead.

This loan type helps companies with limited trading experience apply for cash.

Compare small business startup loans here

Does the government offer any small business loans?

The government has introduced financial support for businesses as a result of the pandemic. These include:

  • Bounce Back Loan Scheme. This allows smaller businesses to borrow 2,000-50,000, interest free for the first 12 months. These loans are 100% government-backed. You can find out more about the Bounce Back Loan Scheme here.

  • Coronavirus Business Interruption Loan Scheme - This allows larger businesses to borrow from 50,001 up to 5 million. These loans are 80% government-backed. You can read more about the Coronavirus Business Interruption Loan Scheme here.

Small business loans FAQs

Q

What is the representative APR?

A

The representative APR is the rate a lender must offer at least 51% of applicants, which means you are not guaranteed to get the rate shown.

Q

How small does my business need to be to get a loan?

A

It depends on the lender. Each small business lender will specify the size your business needs to be before you can apply.

Q

Can a small business loan affect my credit record?

A

If you cannot repay your loan, it could negatively affect yours or your business' credit profile and prevent you from borrowing again in the future.

Q

Will I still pay interest if I do not use the loan money?

A

A loan charges you interest whether you use the money or not, so only apply for small business financing if you need the cash.

About our small business loans comparison

Q

Who do we include in this comparison?

A

We include loans available for businesses with an annual turnover less than 1 million, directly from lenders and through brokers on our panel. Here is more information about how our website works.

Q

How do we make money from our comparison?

A

We have commercial agreements with some of the companies in this comparison and get paid commission if we help you take out one of their products or services. Find out more here.

You do not pay any extra and the deal you get is not affected.

Last updated: 15 February, 2021