1. Understand What Company Loans Are
Company loans are funds borrowed by registered businesses to support operations, expansion, or capital investments. They can be secured or unsecured and are repaid with interest over a set period.
2. Term Loans
The most common type of business financing. You borrow a lump sum and repay it over a fixed term with interest. Ideal for:
- Equipment purchases
- Office renovations
- Long-term investments
3. Business Lines of Credit
Flexible, revolving credit you can draw from as needed. You only pay interest on the amount used—great for managing short-term cash flow or emergencies.
4. Government-Backed Loans (UK and US)
- UK: Start Up Loans and British Business Bank-backed schemes
- US: SBA 7(a), SBA Microloans
These offer lower interest and longer terms with more flexible criteria.
5. Equipment Financing
Borrow funds specifically to buy machinery, vehicles, or tools. The asset itself serves as collateral, reducing lender risk and improving approval chances.
6. Invoice Financing
Turn unpaid invoices into instant cash. Lenders advance up to 90% of invoice value, improving liquidity for service-based companies or B2B startups.
7. Merchant Cash Advances (MCA)
Borrow based on your credit card sales. Repayments are made daily as a fixed percentage of sales—best for retail or hospitality businesses with regular card transactions.
8. Peer-to-Peer (P2P) Loans
Borrow from individual investors via platforms like Funding Circle or Zopa. Approval is often faster and more flexible than with traditional banks.
9. Commercial Real Estate Loans
Used for purchasing, refinancing, or renovating business property. These are large, long-term loans that require detailed planning and collateral.
10. Microloans
Small, short-term loans under £50,000—ideal for startups or companies in underserved communities. Providers include CDFIs, nonprofit lenders, and local programs.
11. Revenue-Based Financing
Repay a percentage of monthly revenue instead of fixed instalments. Great for companies with fluctuating income and strong sales growth.
12. Working Capital Loans
Cover day-to-day operational costs like payroll, rent, and inventory. Often unsecured and available from banks, credit unions, or fintech lenders.
13. Corporate Credit Cards
While not a traditional loan, business credit cards offer revolving credit and rewards. They’re ideal for managing recurring small expenses or building credit.
14. Trade Finance and Import/Export Loans
Support cross-border transactions by financing inventory, paying overseas suppliers, or covering logistics costs. Useful for manufacturers or wholesalers.
15. Business Overdraft Facilities
Linked to your business bank account, these provide overdraft protection and short-term credit with flexible repayment terms.
Frequently Asked Questions
Q1: How much can my company borrow?
Loan amounts range from £1,000 to £5 million+, depending on your credit, revenue, loan type, and collateral.
Q2: What’s the typical interest rate?
Rates vary:
- Government-backed: 4–6%
- Banks: 6–12%
- Fintech/P2P: 10–30% depending on risk
Q3: Do I need a personal guarantee?
Often, yes—especially for unsecured loans or new companies without a financial track record.
Q4: How fast can I get a company loan?
Online lenders may approve within 24–72 hours. Banks or government programs can take several weeks.
Q5: Can I get a loan with bad credit?
Yes. Try secured loans, microloans, or lenders that accept personal guarantees or assess business potential.
Q6: What documents are needed to apply?
Usually:
- Business plan
- Financial statements
- Tax returns
- Proof of registration
- Bank statements
Conclusion
Company loans are essential tools for business growth and stability in 2025. Whether you need cash for expansion, equipment, or daily operations, choosing the right loan ensures financial health and flexibility. Prepare smart, borrow wisely, and grow confidently.
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