Unsecured business loans
Best business loans rates UK
Launch or grow your small business by comparing finance options from UK lenders.
Our experts put the full UK business loan market to the test and picked out the best credit cards and charge cards available for November 2024 listed below.
Our best pick for unsecured business loans
Finder Score 4.2★★★★★
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| Loan rate type | Fixed or variable |
|---|---|
| Credit limits | £1,000 to £20,000,000 |
| Loan terms | 1 month to 72 months |
Connect your business bank account and gain access to business loans (Terms & Conditions apply).
An unsecured business loan doesn’t require you to provide any asset as security for your loan, which can be useful if your business is starting out and doesn’t have any collateral to secure a loan against. Tide is our top pick for unsecured business loans, as it works with the largest range of business loans providers, with a network of more than 120, offering loans of up to £20 million.
| Loan rate type | Fixed or variable |
|---|---|
| Credit limits | £1,000 to £20,000,000 |
| Loan terms | 1 month to 72 months |
Our best pick for small business loans
Finder Score 4.5★★★★★
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Representative example: Borrow £50,000 over 24 months at a rate of 7.63% APR. Monthly repayment of £2,252.94 and the total amount payable is £54,070.56.
| Credit limits | £1,000 to £20,000,000 |
|---|---|
| Loan terms | 12 to 72 months |
Our top pick for small businesses is Funding Options, which is a broker that matches business loan applications with one of its approved lenders. Secured business loans range from £1,000 to £20 million and are repayable over 1 year to 5 years, while unsecured business loans also range from £1,000 to £20 million, but are repayable over terms of between 1 month and 30 years. Your business must be profitable and have at least 24 months of trading history to apply.
| Credit limits | £1,000 to £20,000,000 |
|---|---|
| Loan terms | 12 to 72 months |
Our best pick for secured business loans
Finder Score 3.9★★★★★
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Representative example: Borrow £30,000 over 3 years at a rate of 7.26% p.a. (fixed). Total payable £36,537.84 in 36 monthly repayments of £1014.94.
| Loan rate type | Fixed or variable |
|---|---|
| Credit limits | £10,000 to £2,000,000 |
| Loan terms | 3 to 72 months |
Why we like it: Secured business loans require a business to put up an asset - such as machinery, property or vehicles - as collateral against the loan. Portman Finance is both a direct lender and a broker and is our top pick for secured business loans. Businesses can access many different types of finance through Portman, including secured loans, and can apply to borrow between £10,000 and £2 million, with interest rates tailored to each business that is approved for a loan.
| Loan rate type | Fixed or variable |
|---|---|
| Credit limits | £10,000 to £2,000,000 |
| Loan terms | 3 to 72 months |
Our best pick for fast funding
Finder Score 4.0★★★★★
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| Loan rate type | Fixed |
|---|---|
| Credit limits | £10,000 to £5,000,000 |
| Loan terms | No specified loan terms |
Why we like it: Nest Business Loans is our top pick for a fast business loan. If you need quick funds for your small business, it can take as little as 60 seconds to apply for a business loan with Nest. You can borrow from £10,000 up to £5 million, and if approved, you could have the money within 24 hours.
| Loan rate type | Fixed |
|---|---|
| Credit limits | £10,000 to £5,000,000 |
| Loan terms | No specified loan terms |
Our best pick for short term business loans
Finder Score 3.8★★★★★
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Representative example: Borrow £10,000 over 12 months at a rate of 40% p.a. (variable). Representative APR 49% and total payable £12,294.
| Loan rate type | Variable |
|---|---|
| Credit limits | £1,000 to £500,000 |
| Loan terms | 1 to 24 months |
Your business loan rate varies based on your circumstances.
Why we like it: The iwoca Flexi-Loan is our top pick for short term business loans. Direct lender iwoca specialises in providing finance to small business, and its Flexi-Loan is designed to have a straightforward application process and quick funding decision. It takes 5 minutes to apply, with approvals based on business performance. Businesses can apply to borrow short term loans of between £1,000 to £1 million, over a time period starting from just 1 day, going up to 2 years.
| Loan rate type | Variable |
|---|---|
| Credit limits | £1,000 to £500,000 |
| Loan terms | 1 to 24 months |
Our best pick for long term business loans
Finder Score 4.6★★★★★
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| Loan rate type | Fixed or variable |
|---|---|
| Credit limits | £25,001 to £10,000,000 |
| Loan terms | 3 to 300 months |
Why we like it: NatWest is our top pick for long term business loans, as it offers loan terms of up to 25 years. Businesses of any size, that have been trading for at least 12 months, can apply for different types of business loans, such as secured loans and asset financing. The value of these loans can be between £1,000 and £10 million, repayable over terms ranging from 3 months to 25 years.
| Loan rate type | Fixed or variable |
|---|---|
| Credit limits | £25,001 to £10,000,000 |
| Loan terms | 3 to 300 months |
Our best pick for invoice financing
Finder Score 4.0★★★★★
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| Loan rate type | Fixed |
|---|---|
| Credit limits | £10,000 to £5,000,000 |
| Loan terms | 6 to 120 months |
Why we like it: Invoice financing uses your outstanding invoices as security to borrow a percentage of your total invoice amount. Nest Business Loans is our top pick for invoice financing, with the option to borrow up to 90% of your total invoice amount. Businesses can apply for invoice financing loans ranging from £10,000 to £5 million, repayable over 6 months to 10 years. Nest says that it only takes 60 seconds to apply for its loans, with funds potentially available within 24 hours.
| Loan rate type | Fixed |
|---|---|
| Credit limits | £10,000 to £5,000,000 |
| Loan terms | 6 to 120 months |
Our best pick for credit lines
Finder Score 4.2★★★★★
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| Loan rate type | Fixed |
|---|---|
| Credit limits | £10,000 to £500,000 |
| Loan terms | 6 to 72 months |
Why we like it: Funding Circle is our top pick for credit lines, offering fixed rate, unsecured line of credit loans of between £10,00 and £500,000, repayable across terms of 6 months to 6 years. Funding Circle is an online lending platform that links businesses seeking funding with investors looking for new businesses to invest in, so it essentially acts as a broker. Funding Circle says it takes 7 minutes to apply for a business loan online, with a decision back in as little as 1 hour.
| Loan rate type | Fixed |
|---|---|
| Credit limits | £10,000 to £500,000 |
| Loan terms | 6 to 72 months |
Our best pick for asset finance
Finder Score 4.2★★★★★
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| Loan rate type | Fixed or variable |
|---|---|
| Credit limits | £1,000 to £20,000,000 |
| Loan terms | 1 month to 72 months |
Connect your business bank account and gain access to business loans (Terms & Conditions apply).
Why we like it: Asset finance is a form of business loan that is used to cover the cost of a business asset, and which is secured against the asset itself. Tide is our top pick for asset finance, with businesses able to access a wide range of loans values between £1,000 and £20 million, which can be repaid over terms of 1 month to 5 years.
| Loan rate type | Fixed or variable |
|---|---|
| Credit limits | £1,000 to £20,000,000 |
| Loan terms | 1 month to 72 months |
Our best pick for line of credit
Finder Score 4.2★★★★★
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Representative example: When you spend £1,200 at a purchase rate of 36.19% (variable) p.a., your representative rate is 36.19% APR (variable).
| Annual/monthly fees | £0 |
|---|---|
| Purchases | 36.19% |
| Rewards earn rate | 1 point per £1 spent |
Why we like it: Capital on Tap is our top pick for a business line of credit, offering line of credit loans for small and medium-sized businesses, up to the value of £250,000. Your loan funds can be accessed via your bank account or via your Capital on Tap business card, where you can also earn cashback and rewards on your business spending if you’re signed up to the Capital on Tap premium card plan (which costs £99 per year). The Capital on Tap business card also has a feature called “Preloading”. Preloading allows you to top-up your credit limit with your own funds, while still getting cashback on the full price of your purchases.
| Annual/monthly fees | £0 |
|---|---|
| Purchases | 36.19% |
| Rewards earn rate | 1 point per £1 spent |
How to get the best business loan
A business loan can give a company the money it needs to get started or take its growth to the next level. Whether you need a few thousand pounds or hundreds of thousands, for a little while or a long time, there are plenty of lenders that can help.
So finding the best business loan means first understanding what your business needs and can afford, and then finding the loan or finance option that’s the best fit. Our team have picked the list of lenders below from among the brands we work with directly, but there are plenty more.
Business loans jargon explained
- APR. The annual percentage rate (APR) represents an annual summary of the cost of a loan. As well as reflecting the interest, the APR takes into account any compulsory charges – like an “admin” or “set-up” fee (if there is one) so you can compare costs side by side. However, crucially, lenders only have to award the advertised APR to 51% of those who take out the loan – the other 49% could be offered a different (higher) rate, at the lender’s discretion. That’s why it’s often referred to as the representative APR.
- Fixed rate. A fixed rate means that the interest rate will stay the same for a set period of time, no matter what’s happening with bank rates. A fixed rate can be a popular option for some borrowers, and it allows them to budget with more certainty – knowing in advance the exact cost of a loan and the exact figure for each instalment.
- Variable rate. A variable rate is the opposite of a fixed rate, and can increase or decrease over time at the lender’s discretion. Typically, variations occur as market conditions generally shift – for example an increase or decrease in the Bank of England base rate.
Which bank has the best business loans in the UK?
This will depend on several factors such as the size of your business and the type and size of the loan you need. Some businesses may want to get a loan with the bank that they already have their business current account with, while others may prefer to get a loan through a specialist business lender.
Some of the banks that offer business loans in the UK include:
How do business loans work?
There are different types of business loans that work in different ways. What type you opt for can depend, among other things, on what stage your business is at.
Much like an individual, a company has a credit record and credit score. The healthier these are, the easier it will be to secure finance. A new business is obviously not going to have much in the way of a credit history, so a lender will either want to start small or will need some form of security. Loans for launching a new business or for a business which has just launched are often referred to as “start-up” loans. These are typically available over terms of one to five years, and can be government-backed.
More mature businesses have a variety of loan options, thanks to a credit history, a few years of accounts and an established turnover. These are in addition to other types of credit available such as business credit cards or factoring. Let’s take a look at some of the main loan options available in a little more detail.
Pros and cons of business loans
Business loans can be a good option if you’re looking to borrow a large amount of money over a longer period and at a lower cost than a business credit card. However, this isn’t the most flexible option and it can sometimes be hard to meet the eligibility criteria.
Pros
- Large borrowing amounts are available and you’ll typically receive the money upfront, great for a big or one-off project, like expanding your business or hiring new staff.
- You’ll know how much you’ll pay in interest and how much your monthly repayments will be from the get-go.
- Lower rates than a business credit card (subject to status).
- Good option for borrowing long term. Some lenders may allow you to borrow over up to 25 years.
Cons
- Not very flexible – you need to know how much you’ll need to borrow when you apply.
- The minimum loan amount may be more than you need to borrow.
- Potential early repayment charges.
- Some lenders have strict eligibility criteria based on revenue, credit score and the type of business.
- Lenders may require collateral and a personal guarantee.
- There are better solutions for cash flow issues.
- Not all lenders are transparent with their rates upfront.
There will be heightened competition and innovation as lenders – in particular non-banks whose traditional markets were disrupted by the pandemic – look to carve out new customer niches in order to remain viable. The competition will be the most fierce for the highest quality businesses, so those customers can expect to have a wider choice of products.”
What are my other business finance options?
So what happens if your business is too young or small to qualify for a loan with decent terms? Or maybe it’s just a bad time to take on debt? You still have financing options.
- Get funding from investors. Small or young businesses could stand to benefit the most from selling a share of their enterprise in exchange for financing.
- Start a crowdfunding campaign. Set a fundraising goal, invest a little in marketing and collect small donations from family, friends, your community, fans or just random interested individuals!
- Apply to a government scheme. Various government schemes exist to encourage small businesses (often called “the backbone of the UK economy”). Learn more about government support for businesses.
- Take out a personal loan. Another option would be to consider a personal loan for business use, but there are some important implications to consider, and many lenders simply prohibit this use.
Business loan cost comparison
Loan amount: £50,000
- Loan term: 1 year
- Interest rate: 22%
- Monthly repayment: £4,633
- Total interest: £5,595
Loan amount: £50,000
- Loan term: 1 year
- Interest rate: 36%
- Monthly repayment: £4,903
- Total interest: £8,831
Should you get a business credit card?
If your business requires additional credit, you also might want to consider taking out a business credit card. Whether you’re running a startup or a large established company, business credit cards offer a range of benefits that can help you better manage your finances.
Business credit cards offer greater control over your cash flow, enabling you to address revenue gaps and freeing up additional capital for reinvestment in your business.You can also use a business card to increase your company’s spending power, better manage your expenses, and even earn business-focused rewards.
Does your business depend on invoices?
- Invoice discounting. You might want to consider invoice discounting if your business sometimes has gaps in revenue due to outstanding accounts. Invoice financing lets you borrow against your outstanding invoices and repay the lender once the client pays you. It is an ongoing service with loans that you can pay back in an agreed period.
- Invoice factoring. Alternatively, look into invoice factoring. Here, you sell your invoices to a third-party for a percentage of the invoiced amount. You don’t get the full value of your invoices – this is the more expensive of the two options explained here – but you won’t have to worry about credit control (chasing-up repayments). Don’t forget that with this option, the factoring company will have contact with your clients, so you’ll need to be OK with that.
How to choose the best business loan
Here are some of the key features to consider when comparing business loans:
- Amounts available. Having set out your business plan, you should know how much you need to borrow, and one of the first things to look at when evaluating a loan is whether or not it can offer you the sum that you need.
- Terms available. You may have a fairly clear idea of the length of time you need to borrow for, or this factor may be dictated by the size of the monthly instalments.
- Eligibility. Never apply for a loan without checking that the business is eligible for it. It’s a waste of time and demoralising – and the rejection could be visible to future prospective lenders.
- Security required. It’s not unusual for lenders to ask for a personal guarantee – meaning an individual will be personally responsible for the loan if the business can’t repay it. Security can also take the form of a company’s realisable assets, such as a property, vehicles or equipment. Where no assets are available, it may be necessary to secure the loan on a director’s own property.
- Total costs. It can be easy to obsess over APRs (rates), but perhaps more importantly, how much is this loan going to cost overall? When you’re trying to identify the best business loan, the loans that are cheapest overall are naturally a good place to start.
- Interest rates. Is the rate offered variable or fixed? Is it competitive?
- Fees. Look out for “product” or “set-up” fees as well as any annual/monthly account charges. Lenders sometimes offset an attention-grabbing low rate with product fees, so it’s crucial to also keep an eye on the total amount payable.
- Repayment holidays. Repayment holidays are set periods when you don’t have to make any repayments. This might be, say, the first three months of a loan. This can give your company an opportunity to get back on its feet financially, but will usually extend the term of the loan by the same number of months, pushing up the overall cost of the loan.
- Early repayment terms. It’s hard to predict what’s around the corner, let alone three or four years down the line. If the option to repay early is important to you, you’ll need to check the early repayment (or overpayment) terms of the specific product or products you’re considering. It’s important to note that “No early repayment fees!” does not necessarily mean that repaying early will save you money on interest.
Choosing a longer repayment term for your business loan can help to reduce your monthly repayments. But lengthening the term also means you’ll pay more in interest overall, so be sure to consider this when picking a loan. ”
Who is eligible for a business loan?
Each lender will have its own eligibility criteria. Some common things that are usually on the list include:
- Years trading. For a small business loan, a lender will typically want to see at least 6 months trading history to assess financial stability and creditworthiness.
- Where your business is based. Typically lenders like your business to be UK-based, though some might be more specific.
- Annual turnover. Ensures that your company can generate revenue, manage cash flow and meet financial obligations, lowering the risk of loan default.
- Company structure. Some lenders might be hesitate to lend to specific business structures, such as limited companies or sole traders, due to their limited turnover or trading history.
- Credit history. Both personal and business credit scores are crucial for loan eligibility and getting favourable terms. Improving both scores enhances the chance of getting better financing.
Best business loan providers for customer satisfaction in 2024
| Brand | Logo | Overall satisfaction | Customers who’d recommend | Review | Link |
|---|---|---|---|---|---|
| Lombard |  | ★★★★★ | 97% | Lombard is a direct lender, not a broker, specialising in asset finance. This allows businesses to access new equipment or unlock the value in existing assets. Lombard won this year’s awards, scoring 4.8 out of 5 stars for overall customer satisfaction and receiving a recommendation score of 97% from its customer in our survey. | Read our review |
| Tide |  | ★★★★★ | 97% | Tide uses Open Banking to offer business loans aimed at small to medium sized businesses. It was highly commended in this year’s awards, with an overall score of 4.7 out of 5 stars for customer satisfaction and a recommendation score of 97%. | Read our review |
| mcl finance (formerly mycashline) |  | ★★★★★ | 93% | mcl finance (formerly mycashline) is a direct lender, not a broker, offering flexible and tailored unsecured loans. It says it aims to level the playing field for small business finance and promote SME growth. The overall customer satisfaction score for mcl finance in our survey was 4.7 out of 5 stars. | Read our review |
| Love Finance |  | ★★★★★ | 91% | Love Finance is a financial company based in Birmingham. It works with a range of lenders with the aim of helping UK businesses find the right type of loan or finance option. Its overall customer satisfaction score was 4.7 out of 5 stars. | Read our review |
| NatWest |  | ★★★★★ | 97% | NatWest, the established high street bank, offers a wide range of secured and unsecured loans to cater to businesses of all shapes and sizes. Its customers in our survey scored it 4.6 out of 5 stars for overall satisfaction. | Read our review |
| Cubefunder |  | ★★★★★ | 97% | Cubefunder provides fixed-cost business loans and charges one set fee instead of adding interest, and can design a flexible repayment plan to match your company’s cashflow. It scored 4.6 out of 5 stars for overall customer satisfaction. | Read our review |
| Barclays |  | ★★★★★ | 95% | Barclays, the well-known bank, offers a range of business finance products, from unsecured loans through to asset finance and commercial mortgages. It received an overall customer satisfaction score of 4.5 out of 5 stars. | Read our review |
| Nest |  | ★★★★★ | 93% | Nest provides a multi-lender platform to help businesses across the UK find the right loan through its panel of more than 200 lenders. It scored 4.5 out of 5 stars for overall customer satisfaction. | Read our review |
| HSBC |  | ★★★★★ | 97% | HSBC, the global banking giant, offers a wide range of business financing opportunities for companies of all sizes. It customers in our survey scored it 4.4 out of 5 stars for overall satisfaction. | Read our review |
| Funding Options |  | ★★★★★ | 97% | Funding Options is a broker that uses innovative technology to match a business’s needs with one of its 120 approved lenders. For overall customer satisfaction, it had a score of 4.3 out of 5 stars. | Read our review |
| Funding Circle |  | ★★★★★ | 94% | Funding Circle is a business lending service bringing together investors with businesses seeking investment. It recieved a score of 4.3 out of 5 stars for overall customer satisfaction. | Read our review |
| iwoca |  | ★★★★★ | 82% | iwoca is a direct lender offering fast and flexible credit to small businesses. It says it uses technology to eliminate the cost and complexity associated with traditional business finance. iwoca scored 4.2 out of 5 stars for overall customer satisfaction in this year’s survey. | Read our review |
How satisfied are borrowers overall with their business loan provider?
| Response | % of respondents |
|---|---|
| Very satisfied | 53.25% |
| Reasonably satisfied | 37.50% |
| Neither satisfied nor dissatisfied | 7.50% |
| Moderately dissatisfied | 1.25% |
| Highly dissatisfied | 0.50% |
Source: Finder survey by OnePoll of 400 Brits
Problems in the growth pipeline? The female startup funding gap
Finder published a report in April 2024 exploring whether female entrepreneurs are getting as much funding for startups as their male counterparts. We shine a spotlight on the gap in Start Up Loans funding for female- vs male-led businesses which has widened since 2019 - when the Rose Review called for progress. This report includes the findings of our analysis plus expert insights from Olenka Kacperczyk of London Business School, Julian Dowling of Launch Club Capital, Lucy Cohen of Mazuma Money, Natasha Guerra of Runway East, Kimberley Waldron of SkyParlour, and Sharon Cook of Choice Business Loans.
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Frequently asked questions about business loans
We show offers we can track - that's not every product on the market...yet. Unless we've said otherwise, products are in no particular order. The terms "best", "top", "cheap" (and variations of these) aren't ratings, though we always explain what's great about a product when we highlight it. This is subject to our terms of use. When you make major financial decisions, consider getting independent financial advice. Always consider your own circumstances when you compare products so you get what's right for you. Most of the data in Finder's comparison tables has the source: Moneyfacts Group PLC. In other cases, Finder has sourced data directly from providers.
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