Compare the Best Business Loans

Find the Top Business Loans to Grow Your Business

Banks lent £59.2bn to UK SMEs in 2023, with a median loan amount of £14,000, to allow those businesses to grow and protect their cash flow.

Taking out a business loan can provide vital capital, but you’ll need to diligently source a loan with the best rates and terms. There’s a huge range of lenders out there, and if you act in haste, you will repent at leisure, as the old saying goes.

My guide examines the top business loans available in 2025 based on rates, flexibility, qualifying criteria and other key factors.

Compare the Top 10 Best Business Loan Providers

Lender	Loan Amount	Rates	Term Length	Collateral	Time in Business	Visit Site
Nationwide Finance	£6,000 – £10,000,000	Competitive	1-6 years	Yes, secured financing	No minimum	Visit Site
Tide	£1,000 – £20,000,000	Not specified	1-5 years	None	No minimum	Visit Site
British Business Bank Start-Up Loans	£500 – £25,000	6% fixed	1-5 years	None	< 3 years	Visit Site
Funding Circle	£10,000 – £500,000	From 6.9% fixed	Up to 6 years	None	> 1 year	Visit Site
PayPal Working Capital	£1,000-£225,000	Undisclosed	Undisclosed	None	No minimum	Visit Site
HSBC	£1,000 – £25,000	8.6% – 11.3% fixed	1-10 years	Personal guarantee typically	No minimum	Visit Site
Barclays	£1,000 – £100,000	8.9% – 18.9% fixed	Up to 10 years	Unsecured, no collateral typically	No minimum	Visit Site
Lloyds Bank	£1,000 – £50,000	11.2% fixed	1-25 years	Personal guarantee sometimes	> 1 year	Visit Site
NatWest Small Business Loan	£1,000 – £100,000	12.4% fixed	1 – 7 years (up to 10 years on request)	A personal, director or member’s guarantee may be required	No minimum	Visit Site
Fleximize Business Loan	Available on application	£5,000 – £500,000	1 – 4 years	Unsecured & secured options	No minimum	Visit Site

Top 8 Best Business Loan Providers

British Business Bank Start-Up Loans

Terms	Details
Business Location	Business based in the UK
Loan Amount	£500 – £25,000
Loan Term	1 – 5 years
Interest Rate	Fixed 6% APR
Fees	No application or setup fees
Security	Unsecured – no collateral required
Repayment Frequency	Monthly (amount depends on loan size & term)
Application Requirements	Business plan, cashflow forecast, personal budget

Features

• Low rate of 6% 

• Easy eligibility focused on business plan 

• Free mentoring provided 

• Flexible 1-5 year terms 

• No fees 

• Time needed for detailed application 

• Only for startups under 3 years old 

• Credit scores checked 

• Ongoing financial reporting required 

• Approval can take 1-2 months 

Summary 

With a British Business Bank Start-Up Loan, eligible applicants can borrow up to £25,000 at a low fixed interest rate of 6% per annum, with repayment terms ranging from 1 to 5 years. 

Borrowers benefit from no arrangement fees or penalties for early repayment. A standout feature of this government-backed program is the provision of 12 months of free mentoring, alongside support with business plans and cash flow forecasts. 

Applicants also gain access to a range of templates, guides, and exclusive discounts on business products from over 30 providers. 

If you have all your paperwork in order, you could receive your loan within a month, the British Business Bank says.  

Funding Circle Business Loans

Terms	Details
Loan Cost	8 months of bank statements and the latest complete accounts, including detailed Profit & Loss and Balance Sheet info.
Loan Amount	Depends on the loan amount, interest rate, and term. There’s a one-off completion fee but no fee for early repayment. All loans have fixed rates.
Interest Rates	Calculated based on a number of factors, including the borrower’s credit score and financial situation.
Loan Duration	Up to 6 years
Personal Guarantee Required?	Yes
Documents Required	It depends on the loan amount, interest rate, and term. There’s a one-off completion fee, but there’s no fee for early repayment. All loans have fixed rates.
Loan Repayments	Monthly repayments start one month after the loan is funded. Payments are taken via direct debit up to 5 days before the due date.
Early Repayment	Yes, with no additional fees
Eligibility	Must have been trading for at least one year.

Features

• Fixed rates from 6.9% 

• Loans up to £500,000 

• No early repayment fees 

• Fast funding possible 

• Quick decision 

• Use for any business purpose 

• Minimum 1 year’s trading 

• Personal guarantee required 

Summary 

Funding Circle allows businesses to access loans from £10,000 to £500,000 with competitive interest rates starting from 6.9% per annum. 

One of the standout features of Funding Circle is the swift and straightforward application process. Businesses can apply online in just 10 minutes and receive a decision in as little as one hour, making it an efficient option for those in need of quick funding.  

Loans obtained through Funding Circle come with the flexibility of no early settlement fees, allowing businesses to repay their loans ahead of schedule without penalty. Note that there is a fee to pay when your loan application is completed.  

PayPal Working Capital

Terms	Details
Loan Amount	£1,000 to £225,000 (up to £160,000 for first-time applicants)
Eligibility	Hold a PayPal Business account for at least 90 days, process £9,000 in PayPal sales annually
Payments	Fixed percentage of daily PayPal sales deducted until loan plus fee is repaid
Loan Fee	Based on risk assessment
Loan Term	Undisclosed. Repaid as percentage of daily PayPal sales
Application Process	Apply online; Instant decision; Funds available in minutes if approved
Security Needed	None, uses PayPal sales as collateral
Early Repayment	Allowed anytime; No prepayment penalty

Features

• Quick application process 

• Funds in minutes if approved 

• No fixed repayments 

• Flexible payback from sales 

• No collateral required 

• Only for PayPal merchants 

• Approval based on PayPal sales 

• Deducts % of each sale 

Summary

PayPal Working Capital gives you a cash advance based on your PayPal sales and account history. You must have held a PayPal Business account for at least 90 days and take £9,000 in PayPal sales a year at a minimum to be eligible.

There are no fixed monthly payments or due dates. Instead, a fixed percentage is deducted from each PayPal sale until repaid. Costs and repayment terms depend on monthly sales volume.

This could be a more costly way to access finance than taking out a traditional business loan, but it might suit businesses that need a fast, short-term cash injection that they can repay as they get paid. 

Tide Business Loans

Terms	Details
Eligibility	Must be based in the UK and operate as a sole trader, partnership, or limited company.
Application Process	Can be done in minutes. Funds could be available within around 24 hours, depending on the loan.
Application Time	Can be done in minutes. Funds could be available within around 24 hours depending on the loan.
Impact on Credit Score	Performing pre-eligibility checks for business loan options will not impact your credit score.
Necessary Documents	Basic information about your business and bank statements covering the past year.
Business Loan Options	Boost cash flow, grow business, or cover operational costs. Additional options include Start Up Loans, Business Cash Advance, Invoice Finance, and other partner products.
Secure Open Banking Integration	Allows connection of any business accounts to the Tide platform in a few simple steps.
Credit Builder Feature	Helps to boost your credit score and widen your small business funding options.

Features

• Fast online application 

• Decision in minutes 

• Same-day funding is possible 

• Loans from £1,000 to £20m 

• Uses business data for approval 

• Rates not disclosed upfront 

• You have to download the Tide app and link your bank account 

Summary  

Tide is an increasingly popular banking choice for small businesses who like its easy-to-use app and digital-first mindset.

If you choose Tide for your business borrowing, you could benefit from a simple application process, quick decision, and impressive functionality.

However, it does not disclose representative interest rates, so it’s hard to know whether you’ll be getting a good deal on a loan unless you apply.  

Nationwide Finance Business Loans

Terms	Details
Eligibility	Nationwide Finance has probably the broadest acceptance rates of any lender, assuming you have security.
Application Time	Decision within 4 hours and funds received within 24 hours of application.
Impact on Credit Score	Checking eligibility and applying will not affect your credit score.
Loan Amount	Loans range from £6,000 to £10m.
Interest Rate	Specific rates not provided.
Repayment	Fixed monthly payments with early settlement discounts available.
Type of Loan	Secured finance.
Extra Features	Direct lender (not a broker), no broker fees, and a dedicated contact for your loan.

Features

• Large loans from £6k to £10m 

• Terms from 1-6 years 

• Flexible terms and early repayment 

• Quick decision in 4 hours 

• Funding in 24 hours after approval

• Secured loan, collateral required 

• Rates not disclosed upfront

• High arrangement fees likely 

• Extensive paperwork required 

• Dedicated Account Manager

Summary 

Nationwide Finance serves around 50,000 small business clients annually and prides itself on personalised service. It only offers secured loans to small businesses and startups, although listed companies can apply for its unsecured options. Nationwide Finance doesn’t disclose its average APRs, although it describes its rates as “competitive”. 

HSBC Kinetic Small Business Loan

Features

• Loans from £1,000 to £25,000 

• Repayment terms between 12 months and 10 years 

• 11.3% APR representative on loans below £10,000 

• 8.6% APR representative on loans above £10,000 

• No HSBC Business Current Account required 

• No arrangement fee 

• Administration fee payable if security is required for the loan 

• Option for repayment holiday 

• Option to defer first repayment for 3 to 6 months 

• No charges for early repayment 

• Fixed repayments 

Summary 

With a big brand like HSBC, you can expect responsive customer service and a well-designed loan application process.

An HSBC Kinetic Small Business Loan could suit you if you are only looking to borrow a relatively modest amount.

It could help protect your cash flow from the impact of large purchases with fixed monthly repayments. That said, the interest rates on offer are not the cheapest in the marketplace.  

Barclays Unsecured Business Loans

Features

• Funding within 48 hours of approval 

• Flexible terms available 

• Fixed or variable rates available  

• Rates from 8.9% to 18.9% depending on loan amount 

• Overall representative APR of 12.9% 

• Apply through online banking or app if you already have a Barclays account 

Summary 

Barclays Unsecured Business Loans are not the cheapest in the market for smaller loan amounts, but if you already bank with them, you might find the easy in-app application process appealing. You can get the money paid quickly once your application is approved, so you can start improving your business cash flow straight away.

Lloyds Bank Small Business Loan

Lloyds offers small businesses secured or unsecured loans from £1,000 to £50,000. The representative fixed interest rate is 11.2% APR, but the actual rate which you are offered may vary.  

Representative Example: Borrow £10,000 over 5 years with monthly repayments of £218. Total amount repayable will be £13,105. 

Features

• Funding within 48 hours of approval 

• Variable rate available on loans above £25,000 

• Choose secured or unsecured loans 

Summary 

If you like the idea of borrowing from an established high-street brand, Lloyds Bank might be a good choice. If you already bank with Lloyds, the application process should be simpler.

There is some flexibility around loan terms, so you can choose a fixed or variable rate (on loans above £25,000) and whether you prefer an unsecured loan or one secured on your business assets.

These usually come with a lower interest rate, but your business assets are at risk if you fail to keep up with repayments. 

What is a Business Loan? 

A business loan is a sum of money borrowed by a business to cover expenses that it cannot afford upfront. 

These loans can be used for various purposes, such as expanding operations, purchasing equipment, or managing cash flow. They come with terms and conditions, including interest rates and repayment schedules, and can be secured or unsecured. By obtaining a business loan, businesses can invest in growth opportunities and manage financial challenges more effectively. 

What are the Different Types of Business Loans? 

• Term Loans: Lump sum repaid over a fixed period with interest; suitable for major investments. 
• Lines of Credit: Flexible funds that can be drawn as needed and repaid, similar to a credit card. 
• Invoice Financing: Advances against unpaid invoices to improve cash flow. 
• Equipment Loans: Specific loans for purchasing business equipment. 
• Merchant Cash Advances: Lump sum repaid via a percentage of daily sales. 
• SBA Loans: Government-backed loans with favourable terms for small businesses. 

Fixed-Rate Vs. Variable-Rate Business Loans 

Fixed-rate loans have a constant interest rate, ensuring stable monthly repayments, which aids in financial planning.  

However, variable-rate loans have fluctuating interest rates based on market conditions, leading to potentially lower costs in some periods but adding uncertainty due to possible repayment increases. 

Unsecured Vs. Secured Business Loans 

Unsecured loans don’t require collateral but usually have higher interest rates and stricter eligibility criteria due to the higher risk to lenders.  

Secured loans are backed by collateral, such as property, leading to lower interest rates and better terms, as the lender’s risk is reduced. 

Pros and Cons of Taking a Business Loan 

Pros

• Access to Capital which enables business growth and expansion
• Funds can be used for various purposes like purchasing equipment or managing cash flow
• Timely repayments can improve your business credit score
• Interest on business loans is often tax-deductible

Cons

• Debt must be repaid with interest, increasing financial burden
• Secured loans require collateral, risking business assets
• Missed payments can negatively affect your credit score
• May include additional fees such as origination fees and penalties for early repayment.

Where Can I Get a Business Loan? 

Many options exist for small business loans typically under £50,000: 

• Major high-street banks like Lloyds and HSBC 
• Specialist online lenders like Tide and OakNorth 
• Peer-to-peer lending platforms like Funding Circle 
• The government-backed Start Up Loans programme 
• Your local credit union 
• Invoice financing companies 
• Merchant cash advance providers 

Who is Eligible for a Business Loan? 

Eligibility for a business loan can vary depending on the lender and the type of loan. However, there are some common criteria that most lenders will consider: 

1. Business Age: Most lenders require a business to have been operational for at least one to two years, demonstrating stability and a track record. 
2. Credit Score: Both personal and business credit scores are considered. A higher score improves loan approval chances. 
3. Revenue: Regular incoming revenue is essential to prove repayment capability, with minimum revenue requirements varying by lender. 
4. Profitability: Some lenders require profitability, assessed through financial statements and tax returns. 
5. Business Plan: Detailed plans may be needed for startups or expansion loans, showing loan usage and profitability projections. 
6. Industry: Certain high-risk industries may find it harder to qualify. 
7. Legal and Financial Standing: Businesses must be in good legal standing, with no major legal issues or excessive debt. 
8. Collateral: Secured loans require collateral, such as business assets. 

How to Apply for a Business Loan 

1. Research and Compare: Identify lenders that offer suitable loan options and compare their terms and conditions. 
2. Gather Required Documentation: Prepare necessary documents such as financial statements, tax returns, a business plan, and proof of identity. 
3. Check Eligibility: Ensure your business meets the lender’s eligibility criteria, including credit score and revenue requirements. 
4. Submit Application: Complete the loan application form online or in person, providing all required information and documents. 
5. Await Approval: The lender will review your application, conduct any necessary checks, and notify you of their decision. 

Business Loan FAQs

What is the easiest UK business loan to qualify for?

Government startup loans like the Start Up Loans scheme have simple eligibility requirements focused on the business plan rather than financial history. Invoice financing also tends to have easier qualification than term loans from banks. 

What credit score do you need for a UK business loan?

Most UK lenders look for a personal credit score of at least 600-650 and 2 years of good credit history to qualify for a business loan. Having a personal score of 700 or higher will qualify you for the best rates. 

How long does it take to get approved for a UK business loan?

With online lenders, approval can be within 1 business day. Traditional banks typically take at least 1-2 weeks. Government startup loans can take 1-2 months due to more detailed review. Invoice financing can fund in 24-48 hours. 

Can I get a UK business loan with bad credit?

Yes, some alternative lenders offer bad credit business loans in the UK but you’ll pay much higher interest rates. Building your personal credit score can open up cheaper financing options. 

What documents do you need for a UK business loan?

Typical documents you’ll be asked for include 2 years of accounts, tax returns, business plan, personal/business credit reports, proof of income, identification, and details on any collateral. More established businesses need more documentation.