Best Business Loans UK: Rates and Eligibility Compared
Funding Circle offers the lowest rates (from 6.9% APR) for established limited companies. If you’re a startup trading under 3 years, the British Business Bank Start-Up Loan scheme (6% fixed) is the standout option.
- Tide Funding Options compares business loans, bridging, and invoice finance in one place.
- One application reaches multiple lenders without affecting your credit score.
- Covers loans, MCA, invoice finance, and bridging from a single marketplace.
Compare Top Business Loan Providers
All Cards at a Glance
Compare key features side by side — tap any row for the full review.
| Provider | Best For | Key Feature | Annual Fee | Action |
|---|---|---|---|---|
 | Established limited companies wanting competitive rates and larger loan amounts | Check provider | From 6.9% APR | View Deal → |
 | Pre-revenue startups and early-stage businesses needing affordable government-backed finance | Check provider | 6% fixed APR | View Deal → |
 | SMEs needing fast, flexible credit without fixed monthly repayments | Check provider | 49% APR (representative) | View Deal → |
 | Barclays customers wanting a competitive bank rate with long repayment terms | Check provider | 11.2% APR (representative) | View Deal → |
 | Existing HSBC business customers wanting a mainstream bank loan with a 10-year term option | Check provider | 8.6% APR (representative) | View Deal → |
 | Existing NatWest customers wanting no-fee borrowing at a bank rate | Check provider | 12.24% APR (representative) | View Deal → |
 | Lloyds customers wanting the longest available repayment terms | Check provider | 11.2% APR (representative) | View Deal → |
Data verified April 2026. Rates are representative — your actual rate depends on credit profile and loan amount. Check provider sites for current terms.
Our Top Business Loan Picks
Funding Circle Business Loan
British Business Bank Start-Up Loans
iwoca Business Loan
HSBC Kinetic Small Business Loan
NatWest Business Loan
Lloyds Bank Business Loan
What Business Loans Really Cost
Interest Rates and Representative APR
Most lenders in this comparison offer fixed-rate products — Funding Circle, the British Business Bank, and iwoca all fix your rate for the loan term, so your monthly repayment doesn’t change. High-street banks offer both fixed and variable.
Variable rates move with the Bank of England base rate. A variable loan might cost less if rates fall, but repayments increase when they rise.
For most small businesses, the budget predictability of a fixed rate outweighs the upside of a variable one. If you’re considering a variable-rate bank loan, ask what the repayment looks like if the base rate rises by 1–2% before you commit.
Fees and Total Cost of Finance
The headline APR is not the full cost. Funding Circle charges a completion fee of 1–3% of the loan amount, added at drawdown. Some lenders charge arrangement fees upfront.
Early repayment charges can add material cost if you plan to clear the loan ahead of schedule — Funding Circle has none; banks vary. We recommend asking for the total cost of credit figure, not just the monthly repayment, before you sign.
The comparison that matters: take the APR, apply it across the full term including all fees, and compare that against what the loan is expected to generate or save. If the numbers don’t work on that basis, the rate isn’t low enough.
Secured vs Unsecured: What Personal Risk You Are Taking
An unsecured loan requires no specific asset as collateral — but it doesn’t mean zero personal risk. Most unsecured business loans require a personal guarantee from the director, putting your personal assets at risk if the business defaults.
The “unsecured” label refers to the absence of a charge over a specific asset, not the absence of personal liability. We found this distinction matters most when comparing lenders that market themselves as “no security required”.
Every lender in this comparison that requires a personal guarantee carries personal-asset risk. The British Business Bank Start-Up Loans scheme is the only option here that doesn’t require one — because the loan is made to you personally, not the business.
Eligibility: What Lenders Look For
Trading History Thresholds
Trading history is the single biggest eligibility gatekeeper in this comparison. We compared minimum thresholds across all seven lenders: 0 months (British Business Bank — pre-revenue eligible); 6 months (iwoca); 12 months (Funding Circle); 24 months typical for high-street banks.
If your business is under 12 months old, your practical options are the British Business Bank (up to £25,000 at 6% fixed) or iwoca (more expensive, faster, up to £1,000,000). Between 12 and 24 months, Funding Circle is the best-priced route likely to be available to you.
Credit Profile
Banks want a clean credit history — both personal and business. Funding Circle will consider some adverse credit but expects strong trading performance to compensate. We found iwoca to be the most flexible on credit in this comparison, which is one reason its rates are higher.
The British Business Bank Start-Up Loans scheme considers adverse credit on a case-by-case basis and is worth exploring even with an imperfect credit history. A personal guarantee is not required, but the loan is personal debt — your credit record is still relevant to the application.
Business Structure and Turnover
Funding Circle lends to limited companies and LLPs only — sole traders have been ineligible since February 2026. We verified this against Funding Circle’s current eligibility page.
Funding Circle also requires approximately £50,000 in annual revenue. If you’re a sole trader or under that threshold, your options in this comparison are iwoca, the British Business Bank, or a high-street bank.
Some industries face tighter criteria regardless of lender: hospitality and construction are considered higher risk by banks, and may be declined or quoted a higher rate even with a strong trading history.
How to Choose the Right Business Loan
Choose by Trading Age
- Under 3 years old: British Business Bank Start-Up Loans (£500–£25,000 at 6% fixed, no personal guarantee). If you need more than £25,000 or faster funding, iwoca is the next option from 6 months of trading.
- 12 months to 24 months: Funding Circle is the best-priced option likely to be available. If you don’t meet Funding Circle’s limited company requirement, iwoca is the fallback.
- 24 months or more: Approach your existing bank first — relationship customers get faster decisions and sharper rates. Use Funding Circle or iwoca as a backstop if the bank declines or quotes an unworkable rate.
Choose by Speed
- Need funding today or tomorrow: iwoca — same-day decisions, funds same or next business day for approved applications.
- Can wait 24–48 hours: Funding Circle — decision typically same or next business day, funds within 24 hours of approval.
- Can wait 2–3 weeks and want the lowest rate: High-street banks — slower, but cheapest for established businesses with a banking relationship.
- Can wait 2–4 weeks and are pre-revenue or under 3 years: British Business Bank — the cheapest route at 6% fixed, but requires time for mentor matching and underwriting.
Choose by Cost
- Cheapest overall: British Business Bank (6% fixed APR) — only available to businesses under 3 years old, capped at £25,000.
- Lowest rate from a commercial lender: Funding Circle (from 6.9% APR representative) — requires 12 months trading, limited company or LLP.
- Flexibility over cost: iwoca Flexi-Loan (from 26.4% APR representative) — draw, repay, and redraw without reapplying. Significantly more expensive than Funding Circle or a bank; earns its place for speed and accessibility.
If you qualify for both Funding Circle and a bank, compare total cost of borrowing including fees — not just headline APR — before deciding.
Frequently Asked Questions
What is the easiest business loan to get in the UK?
Specialist online lenders like iwoca and Capify have the most accessible eligibility criteria — they consider businesses from 6 months of trading and accept all credit profiles. Banks typically require 2+ years of trading and a strong credit history.
Can I get a business loan with bad credit?
Yes. Capify and iwoca specifically consider businesses with imperfect credit histories. You’ll pay a higher rate to reflect the increased risk, and you may need to provide a personal guarantee. The British Business Bank Start-Up Loans scheme also considers applicants with adverse credit on a case-by-case basis.
How much can a small business borrow?
This depends on your revenue and the lender. The British Business Bank Start-Up Loans scheme offers up to £25,000. High-street banks typically lend up to £100,000 unsecured. Specialist lenders like iwoca can lend up to £1,000,000, and Funding Circle up to £500,000.
How long does it take to get a business loan?
iwoca and Capify can make decisions within hours and fund the same day or next business day. Funding Circle typically funds within 24 hours of approval. High-street banks (NatWest, Lloyds, Barclays) take 2–3 weeks on average from application to funds.
Do I need a personal guarantee for a business loan?
It depends on the lender and loan type. The British Business Bank Start-Up Loans scheme does not require a personal guarantee. iwoca requires one. High-street banks require one for limited companies in most cases. Some specialist lenders offer both secured and unsecured options.
Methodology and Disclosure
We compiled this guide by researching providers in the business loan providers market, checking current rates, fees, and terms from each provider’s primary website. Selection reflects a combination of pricing, features, accessibility, and overall value for typical UK business needs. Verified in April 2026.
All product and pricing claims are sourced from providers’ primary websites, FCA register entries, and official documentation. Rates and fees change — confirm current terms with providers before applying.
Some links on this page are affiliate links. If you sign up or purchase through one of these links, we may earn a commission at no additional cost to you. This does not affect our editorial judgements or rankings. See our editorial policy for details.