How much would I pay for a £5,000 business loan?

Whether you need a lump sum of £5,000 as soon as possible, or simply want the financial breathing room to allow you to focus on growth, there’s a range of business finance products that could help. This guide will help you explore your options, and the benefits and disadvantages of each.

Compare £5,000 business loans

Table: sorted by loan terms, promoted deals first

1 - 5 of 13

Updated regularly

Product UKFBL	Finder Score	Loan type	Loan amounts	Loan terms	Minimum turnover/trading criteria	Key benefit
Rise Funding Unsecured Business Loans	Finder score 8.7Great	Fixed or variable rate Unsecured loan	£10,000 to £2,000,000	3 to 72 months	£150,000 per annum annual turnover, 1 year trading		Go to siteView details	loading Fetching your data...
Nest Unsecured Business Loan	Finder score 8.8Great	Fixed rate Unsecured loan	£10,000 to £5,000,000	No specified loan terms	£200,000 annual turnover, 1 year trading		Go to siteView details	loading Fetching your data...
Tide Business Loan Finder Award	Finder score 9.2Excellent	Fixed or variable rate Asset finance loan	£1,000 to £20,000,000	1 month to 72 months	N/A annual turnover, N/A trading	Connect your business bank account and gain access to business loans (Terms & Conditions apply).	View details	loading Fetching your data...
Portman Finance Business Loan	Finder score 8.7Great	Fixed or variable rate Asset finance loan	£10,000 to £2,000,000	3 to 72 months	£100,000 annual turnover, 1 year trading		View details	loading Fetching your data...
Funding Options Unsecured Loan	Finder score 9.8Excellent	Unsecured loan	£1,000 to £20,000,000	12 to 72 months	£5,000 per month annual turnover, 6 months trading		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.	View details	loading Fetching your data...

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What are your borrowing options?

When it comes to borrowing a lump sum upfront for your business, options include (but aren’t limited to):

• A Start Up loan. If your business has been trading for less than 2 years, up to four partners can each apply for a loan of up to £25,000 – meaning a potential maximum of £100,000 per business. Start Up loans are unsecured and the interest rate is fixed at 6%.
• A standard business loan. Straightforward, traditional business loans are available form both high street banks and online specialist lenders alike. You’ll have a lump sum transferred into your bank account and make monthly repayments on the balance. The interest rate will usually be fixed (meaning a fixed monthly repayment amount and a set loan term) but can be variable (in which case it’s likely to rise or fall in line with the Bank of England base rate).
• Asset finance. With asset finance, you can spread the cost of assets for your business over a longer period. It’s more expensive than paying outright, but it could be a good way of accessing the latest equipment without a huge initial outlay. The assets can be repossessed if you stop making repayments.
• A business cash advance. Not sure when you’ll be able to pay back your loan because of fluctuating sales? A business cash advance could be a solution. With this form of business credit, you’ll agree to a fixed fee upon taking out the loan. Then, you’ll pay back a fixed percentage of every transaction until your debt is cleared. If business is booming, you’ll clear your debt faster, and if business is slow, it’ll take longer. Either way, it’ll cost the same amount.
• A business line of credit. If you’re looking for ongoing, flexible access to business credit, you could consider a business line of credit. These work in a similar way to a credit card or overdraft. You’ll only pay interest on the amount you need, when you need it, and the facility remains “open” even after you’ve cleared your outstanding balance. But the credit limits are typically higher. Your credit limit will be determined by the lender’s assessment of your situation – including a credit search.
• Business credit cards With a business credit cards, you can borrow what you want (subject to a credit limit), when you want, so you’ll only pay interest for the days on which you borrow. Subject to a monthly minimum repayment, you can also pay back funds on terms that suit you. Unlike a fixed-term loan, which closes when all the money has been repaid, a credit card is a “revolving line of credit”, which means that the facility is effectively always open (which can be a mixed blessing).

Typical eligibility criteria 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.

Frequently asked questions

• How do I qualify for a business loan?

  Each lender will have its own eligibility criteria, but you’ll boost your chances by demonstrating a good personal credit score and business credit score. It helps if you’ve been in business for a long time and can show a consistent history of profit. Providing collateral, applying for less money or applying for loans with a higher rate will boost your chances of being accepted.

• Can startups be approved for a business loan?

  There are lenders that specialise in providing finance for startups, although the best deals tend to be saved for established businesses.

• What is the average term for a business loan?

  It varies massively depending on the type of loan. Short term loans for a few months are widely available. It’s also possible to get loans with terms of 10 years or more. However, these are typically only available on larger sums and are harder to be approved for.

• What can business loans be used for?

  You can use a business loan for various purposes e.g. new equipment, expanding your business, improving cash flow or building your team. Your lender will ask what you’re planning to spend the loan on and look for proof that you’ll be able to comfortably repay it. If they’re convinced you’ll be able to repay the loan, lenders tend to be relatively lenient about what you spend it on.

Written by

Chris Lilly

Head of publishing

Chris Lilly is Head of publishing at finder.com. He's a specialist in personal finance, from day-to-day banking to investing to borrowing, and is passionate about helping UK consumers make informed decisions about their money. In his spare time Chris likes forcing his kids to exercise more. See full bio

Chris's expertise

Chris has written 602 Finder guides across topics including:

• Loans & credit cards
• Building credit
• Financial health