1. Government Start Up Loans
Ideal for new businesses, the UK Government’s Start Up Loan Scheme provides:
- Up to £25,000 per founder
- Fixed 6% APR
- 1–5 year repayment terms
- Free mentoring for 12 months
Perfect for businesses trading under 36 months or just launching.
2. Traditional Bank Loans
Major UK banks offer term loans and lines of credit for trading businesses.
Options include:
- Barclays Business Loan
- NatWest Business Loan
- Lloyds Business Loan
- HSBC Small Business Loans
Expect credit checks, financial statements, and possibly a personal guarantee.
3. Online Lenders and Alternative Finance
FinTech lenders provide fast and flexible loans with varying terms. Top providers:
- Funding Circle – peer-to-peer business loans
- Iwoca – short-term working capital loans
- Capify – unsecured loans
- Tide – loans for Tide business account holders
These lenders typically fund within 24–72 hours after approval.
4. Secured Business Loans
For larger funding needs, a secured loan backed by property or assets can offer:
- Higher borrowing limits (£50,000–£1M+)
- Lower interest rates
- Longer repayment periods
However, if repayments are missed, assets may be at risk.
5. Unsecured Business Loans
Unsecured loans don’t require assets but are often based on:
- Creditworthiness
- Business turnover
- Personal guarantees
Loan amounts typically range from £5,000–£250,000, with faster approvals.
6. Merchant Cash Advances
This option lets businesses borrow based on future card sales. Repayments are made as a % of daily transactions.
Good for:
- Retailers, cafés, salons
- Seasonal businesses
- Fast funding needs
Be cautious of higher effective interest rates.
7. Asset and Equipment Finance
For businesses needing machinery, vehicles, or IT, asset finance spreads cost over time:
- Hire purchase or leasing options
- Doesn’t impact working capital
- Asset serves as collateral
Common in manufacturing, logistics, and tech sectors.
Frequently Asked Questions
Can I get a loan for business UK if I’ve just started?
Yes. The Start Up Loans scheme is designed for new businesses, and some lenders support early-stage companies.
Is a business loan taxable?
No. Business loans are not considered income, but interest is a deductible expense.
Do I need a business bank account to apply?
Yes. Most lenders require a dedicated business account for loan disbursement and repayments.
What’s the typical interest rate on a business loan UK?
Rates vary: 6% for government loans, 8–25% for banks and online lenders, depending on credit and security.
How fast can I get the funds?
Online lenders: 1–3 days.
Banks and government-backed loans: 1–4 weeks.
Can I repay a loan early?
Yes. Most allow early repayment, though some may charge a fee—check the terms.
Conclusion
Getting a loan for business UK companies can trust depends on your business stage, credit status, and funding needs. Whether through government support, banks, or online platforms, the right finance option can help you launch, grow, or stabilise your business in 2025 and beyond.