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
If you qualify, the Start Up Loans scheme offers one of the best funding opportunities for new businesses in the UK.
It offers personal loans designed to help entrepreneurs start new businesses, rather than business loans, meaning you are personally liable for the debt.
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
Funding Circle facilitates business loans for UK-based businesses seeking to expand, acquire new equipment, hire staff, or manage cash flow effectively.
Formerly a peer-to-peer lending marketplace that allowed members of the public to lend to small businesses, Funding Circle is now an online lending platform that connects businesses to non-retail investors.
Representative Example: Borrow £10,000 over 60 months at 6.9% APR (fixed) with monthly repayments of £197. Total amount repayable will be £11,852.
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
Businesses that take PayPal payments can get a cash advance, which is repaid from their PayPal revenue.
This is more of a working capital loan than a traditional business loan, but its speed and ease are quite remarkable if you qualify.
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
Tide offers quick and straightforward business loans focusing on speed and ease of use.
Known for its seamless digital platform, Tide could be an excellent choice for small businesses needing fast access to funds.
>>Read our full review of 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
Nationwide Finance (not affiliated with Nationwide Building Society) offers business loans with competitive rates and tailored terms to support different business needs.
With personalised service and flexible options, Nationwide Finance could be a good choice for businesses seeking customised financial solutions.
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
HSBC offers flexible business loans with competitive interest rates and various loan amounts to support different business needs. HSBC Kinetic is the high-street lender’s small business and start-up focused, app-based banking offering which also provides loans up to £25,000.
Representative Example: Borrow £10,000 over 60 months at 8.6% APR representative (fixed) with monthly repayments of £205. Total amount repayable will be £12,338.
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
Barclays provides fixed-rate term loans from £1,000 up to £100,000. Interest rates start from 8.6% APR fixed. No minimum turnover or time trading is specified.
Representative Example: Borrow £10,000 over 5 years at 12.9% APR with monthly repayments of £227. Total amount repayable will be £13,621.
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.
Our Business Loan Review Methodology
To determine the top business loan providers and products for 2023, I’ve evaluated over a dozen leading online lenders, banks, peer-to-peer platforms and private finance companies.
The key factors I assessed were:
- Interest rates and overall cost of borrowing
- Loan amounts offered
- Loan terms available
- Speed of funding after approval
- Flexibility of repayment options
- Requirements on time in business and revenue
- Use of security or collateral
- Fees and other costs
- Overall reviews and reputation of lender
This allowed us to identify loans offering the most competitive rates and terms combined with flexible qualifying criteria for different business situations.
Our rankings aim to provide the most affordable financing options accessible to both new and established businesses.
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
- 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
- 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:
- Business Age: Most lenders require a business to have been operational for at least one to two years, demonstrating stability and a track record.
- Credit Score: Both personal and business credit scores are considered. A higher score improves loan approval chances.
- Revenue: Regular incoming revenue is essential to prove repayment capability, with minimum revenue requirements varying by lender.
- Profitability: Some lenders require profitability, assessed through financial statements and tax returns.
- Business Plan: Detailed plans may be needed for startups or expansion loans, showing loan usage and profitability projections.
- Industry: Certain high-risk industries may find it harder to qualify.
- Legal and Financial Standing: Businesses must be in good legal standing, with no major legal issues or excessive debt.
- Collateral: Secured loans require collateral, such as business assets.
How to Apply for a Business Loan
- Research and Compare: Identify lenders that offer suitable loan options and compare their terms and conditions.
- Gather Required Documentation: Prepare necessary documents such as financial statements, tax returns, a business plan, and proof of identity.
- Check Eligibility: Ensure your business meets the lender’s eligibility criteria, including credit score and revenue requirements.
- Submit Application: Complete the loan application form online or in person, providing all required information and documents.
- Await Approval: The lender will review your application, conduct any necessary checks, and notify you of their decision.
Business Loan FAQs
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.
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.
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.
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.
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.