Barclays and HSBC price in bands by amount, so the same lender quotes you a different rate at £5,000 than at £20,000. We’ve put the verdict, the watch-out and the eligibility for each lender in the mini-reviews under the table.
Funding Circle Business Loan
British Business Bank Start-Up Loans
iwoca Business Loan
TSB Fixed Rate Business Loan
Barclays Business Loan
HSBC Small Business Loan
NatWest Small Business Loan
Lloyds Bank Small Business Loan
Santander Business Loan
How Small Business Loans Work
Loan Amounts and Repayment Terms
Decide how much you need before you shortlist a lender, because the amount alone rules options in or out. Across these nine you can borrow from £500 (Start Up Loans) to £1,000,000 (iwoca), repaid in fixed monthly instalments.
The bank products here cap their advertised small-business lending low: Barclays, HSBC and TSB at £25,000, Lloyds and Santander at £50,000, NatWest at £100,000. For more, you’re into specialist territory: Funding Circle to £750,000, iwoca to £1,000,000.
Treat those as the ceilings of the named products, not of the banks themselves. TSB, for one, publishes a separate range from £100,001 to £1,000,000 and nothing at all in between.
Most banks will discuss larger secured lending case by case. What they won’t do is publish a rate for it.
Take the shortest term your cash flow can carry. Stretching it shrinks the monthly payment, but you hand over more interest in the end. That is the trade with any longer term. Start Up Loans runs one to five years; Barclays and HSBC stretch to ten.
Start Up Loans is the odd one out: a fixed 7.5% set by government, the same rate for everyone approved, capped at £25,000 per applicant.
Secured vs Unsecured Business Loans
Seven of these nine don’t ask you to pledge a specific asset like property or equipment as collateral in the ordinary case: they’re unsecured. That is the reassuring half. The other half is that unsecured does not mean nobody can come after you personally.
Two are exceptions worth reading carefully. HSBC can ask for security such as a debenture or fixed charge on a case-by-case basis, with an admin fee if it does.
TSB offers its fixed-rate loan on a secured or unsecured basis, and warns that any property given as security, which may include your home, could be repossessed.
The 9.94% headline doesn’t tell you which of the two your own offer is on, so ask before you sign rather than after.
Here’s the catch: unsecured doesn’t mean risk-free. Funding Circle and iwoca both require a personal guarantee, and the banks may ask for one too.
A guarantee is a director’s separate promise to repay personally if the company can’t. Your own money is exposed even with no asset pledged. We unpack security, guarantees and personal debt under eligibility.
Funding Speed and How Funds Are Repaid
If your payroll’s due Friday and you’re short, speed matters more than rate. But “fastest” is the wrong question, because lenders time different things and then advertise them as if they were the same thing.
Funding Circle publishes the quickest decision of the nine, in as little as an hour, then takes typically 48 hours to pay out. iwoca gives many customers an instant decision and can fund the same or next business day.
So iwoca usually gets the money to you sooner, even though its published decision window is the longer of the two. They are quick at different things, in other words, and which one you want depends on whether you need an answer today or the money today.
The banks aren’t far behind if you’re approved: NatWest can fund within 24 hours, sometimes the same day, and Barclays and Lloyds within 48 hours of signing. TSB and Santander publish no funding time at all.
A Start Up Loan is the slow one, and we’d rule it out if you need the money now. It needs a business plan, a cash-flow forecast and mentor matching first, so the timing turns on your paperwork and your delivery partner rather than on a published service level.
You repay all of these the same way: a fixed monthly instalment until the balance clears. iwoca’s Flexi-Loan bends at the start rather than the end: you draw only part of an approved amount and pay interest only for the days you hold it.
Read the qualifiers in the table below rather than the numbers. “As little as”, “many customers” and “could” are all doing work, and three of the nine lenders here publish no timing for any stage at all.
| Lender | Application | Decision | Funds After Approval | Lender’s Own Wording |
|---|---|---|---|---|
| Funding Circle | About 7 minutes online | As little as 1 hour | Typically 48 hours | “Decision in as little as 1 hour”; “funds paid out typically within 48 hours” |
| iwoca | About 5 minutes online | Often instant; within 24 hours for larger loans | Same or next business day | “Many customers get an instant decision” |
| NatWest | Quote in 3 minutes; full application about 10 minutes | Not separately published | Within 24 hours, same day possible | “If approved, you could have the money within 24 hours” |
| Barclays | Not published | Not separately published | Within 48 hours of signing | Funding time is stated from signing, not from application |
| Lloyds | Online quote to £25,000 | Not separately published | Within 48 hours of acceptance | “Once we’ve accepted your application, the money could be in your account in 48 hours” |
| HSBC | Not published | Not published | Not published | No stage timing published on the product page |
| TSB | Not published | Not published | Not published | No stage timing published on the product page |
| Santander | Not published | Not published | Not published | No stage timing published on the product page |
| Start Up Loans | Business plan and cash-flow forecast required | No published service level | No published service level | Timing depends on your paperwork and your delivery partner |
| Application, decision and funding are separated because lenders advertise them interchangeably and they are not the same promise. A decision time is not a funding time, and a funding time counts from approval or signing, not from when you start. “Not published” means the lender states no timing for that stage: it is not a slow answer, it is no answer. None of these is a guarantee. Wording checked on 7 August 2026 at Funding Circle, iwoca and NatWest. | ||||
iwoca adds: “For larger loans, one of our underwriters takes a look and comes back within 24 hours”. NatWest’s same-day funding applies only if you apply online, are unconditionally accepted and sign your documents.
Are Small Business Loans FCA Regulated?
Most of them aren’t, and the “FCA authorised” line in a lender’s footer won’t tell you either way. Authorisation describes the firm. Whether your loan carries consumer-credit protection depends on the agreement you sign and on what your business is, and those two questions get run together constantly.
Borrow through a limited company or an LLP and it’s settled before you start. The company is the borrower, and lending to a company falls outside the consumer-credit rules however the loan is priced and whoever guarantees it. Borrow as a sole trader, in a small partnership or through another unincorporated body and it turns on the size of the loan instead. The Financial Conduct Authority treats a business-purpose agreement as exempt once the credit runs above £25,000, so £25,000 or less can be a regulated credit agreement and anything above it is not.
That line runs straight through the middle of the products compared here. A £20,000 loan to a sole trader can be a regulated agreement, carrying the pre-contract disclosure and the withdrawal rights that come with one. The same borrower taking £30,000 from the same lender gets neither, and nothing about the lender has changed in between.
Falling outside those rules doesn’t leave you with nothing. The FCA’s own complaints rules make a small business an eligible complainant at the Financial Ombudsman Service, and since April 2019 they do the same for a guarantor, on matters arising from the guarantee itself. If you have signed a personal guarantee behind a company loan, that route is yours and it is separate from the company’s.
Ask the lender outright, before you sign, whether your agreement is a regulated credit agreement. It’s a plain question with a short answer, and it decides what you can do later if the loan turns out to have been sold badly.
Small Business Loan Costs and Fees
Interest Rates and Representative APR
For budgeting certainty, choose a fixed rate. Most lenders here fix yours for the term, so the payment never moves: Start Up Loans at 7.5%, Lloyds and Santander at 11.2% representative, TSB at 9.94% representative, Barclays and NatWest fixed for the life of the loan.
You can’t line the rate column up and read it top to bottom, and the phrase that trips most people up is “representative APR”, the annual percentage rate a lender advertises. It doesn’t mean the rate most people get.
It means the rate the lender expects to give at least 51% of successful applicants for that product. Both NatWest and Barclays state that rule plainly on their own pages.
Read it the other way round and it’s a much less comfortable number: up to half of everyone accepted can be quoted more than the rate that drew them in, and the rules permit the advertised rate either way.
Santander is the only lender here that tells you how much more. Its ceiling on any loan is 29.9%.
The other two labels do different jobs again. A “from” rate is the best price the lender gives anybody, not the price you get. And a calculator figure, which is all NatWest publishes, isn’t a rate at all: it’s whatever the tool returns for the numbers you typed in.
Five different measures end up in one column, which is why we won’t rank them against each other.
| Label You See | What It Actually Means | Used Here By | Can You Compare It Directly? |
|---|---|---|---|
| From X% a year | Best advertised starting rate, for the strongest applicants only. Your own rate is set at quote. | Funding Circle (from 6.9%) | Only against another starting rate, and only once you know the fees |
| X% fixed a year | An annual interest rate fixed for the term. Everyone approved gets the same number. | Start Up Loans (7.5%) | Yes, once fees are checked: it is the only figure here that is not conditional on your credit assessment |
| X% APR representative | The rate the lender expects to give at least 51% of successful applicants. Up to half can be quoted more. | TSB, Lloyds, Santander, HSBC, Barclays, iwoca | Better than most, but each is built on the lender’s own example amount and term |
| X% per 30 days | A periodic rate on the balance held. Multiplying it by 12 does not produce an annual rate. | iwoca (representative 3.33% per 30 days) | No: convert it using the actual cash flows and the actual number of days |
| A calculator figure | The calculator’s output for your amount and term, not an offer, representative rate or figure binding the lender. | NatWest, Funding Circle, iwoca, Start Up Loans, Barclays | No. Two calculator outputs are only comparable if you entered identical inputs, and even then neither is a quote |
| Five different measures appear in the rate column of the table above, and they answer different questions. A representative APR includes compulsory fees; a starting rate and a periodic rate do not. This is why we do not rank the percentages against each other. Each figure was read from the lender’s own page on 7 August 2026: Funding Circle, Start Up Loans (GOV.UK), iwoca, NatWest. | |||
The rate offered to you may be well above the advertised starting rate.
iwoca‘s 49% representative APR looks alarming next to a bank, and it’s genuinely expensive. On its own worked example, £10,000 over 12 months costs £12,294 to repay.
Weigh that against what it buys: a decision often instant, interest charged only for the days you hold the money, and no charge for clearing it early.
One wrinkle on the fixed rates. Lloyds advertises its fixed 11.2% representative APR across the whole £1,000 to £50,000 range.
Above £25,000 you can also choose a variable rate that usually tracks the Bank of England Base Rate instead. That is an option you take, not a threshold that moves you off the fixed rate.
If you do take a tracking rate, know what it tracks. Bank Rate is 3.75%, where it has sat since December 2025 and where the Monetary Policy Committee held it on 30 July 2026. The next decision is due on 17 September 2026.
Ask what your repayment looks like a point or two higher before you commit.
The Bank of England publishes what banks charged on new lending to small and medium-sized businesses, which is the nearest thing to a market yardstick you can check for yourself. In June 2026 that rate was 6.36%, up from 6.18% in May. The Bank published the figure on 29 July 2026 and the next update is due on 1 September 2026. It’s a useful number and an easy one to misread.
- It’s an average across every reporting bank and every new loan, not a rate you can apply for. No lender advertises it and none of them has to match it.
- It sits below every rate in the table above. We read that as the mix rather than a bargain going begging: the Bank’s figure takes in secured lending and larger, better-priced loans that a £10,000 unsecured application never reaches.
- Use it to sanity-check a quote rather than to argue with one. Single figures on an unsecured small-business loan is a good outcome. A quote in the twenties or above is buying you speed or acceptance, and it is worth being clear which of the two you are paying for.
Fees and Total Cost of Borrowing
The headline rate isn’t the bill, so check the fees before you compare. Funding Circle adds a one-off completion fee at drawdown, confirmed in your personalised quote.
iwoca charges nothing on a 12-month loan, but a fee of around 5% applies on terms of 13 to 24 months. Start Up Loans, Lloyds, NatWest, Barclays, HSBC and Santander charge no arrangement fee at all.
TSB is the one bank here that does. An arrangement fee always applies and scales with the amount: on the £13,000 example TSB itself publishes, it’s £250.
To TSB’s credit the fee sits inside its 9.94% APR, which is exactly what an APR is for. It also makes TSB the one place on this page where two banks can be compared like for like, and on that comparison TSB loses to HSBC by £467.55.
Ask every lender for the total cost of credit before you sign, not just the monthly payment. It’s the only figure you can fairly compare from one lender to the next.
We used to run every lender here through one hypothetical £10,000 loan so the costs lined up in a single column. We’ve stopped, because it was the wrong kind of tidy.
It made a lowest-possible rate, a representative APR and a calculator estimate look like numbers, and implied a ranking none of them supports.
Below are the lenders’ own worked examples instead, each left at the amount and term the lender chose. Only three of the nine publish one in full.
| Lender | Example Amount | Term | Annual Interest Rate | Representative APR | Compulsory Fee in the Example | Monthly Repayment | Total Payable | Checked |
|---|---|---|---|---|---|---|---|---|
| TSB | £13,000 | 60 months | 9.06% p.a. fixed | 9.94% APR | £250 arrangement fee | £273.12 | £16,387.38 | 7 Aug 2026 |
| HSBC (loans to £10,000) | £7,000 | 60 months | 11.3% p.a. fixed | 11.3% APR | None | £151.34 | £9,080.40 | 7 Aug 2026 |
| HSBC (loans over £10,000) | £13,000 | 60 months | 8.6% p.a. fixed | 8.6% APR | None | £265.33 | £15,919.83 | 7 Aug 2026 |
| Lloyds | £8,000 | 60 months | 10.65% fixed | 11.2% APR | None | £172.55 | £10,353.00 | 7 Aug 2026 |
| Each row is the lender’s own published representative example, reproduced at the amount and term the lender chose rather than converted onto a common loan. We have added nothing and recalculated nothing. Two rows happen to land on the same £13,000 over the same 60 months, which is the only genuine like-for-like comparison available anywhere on this page: HSBC at 8.6% costs £15,919.83, TSB at 9.94% costs £16,387.38. TSB is £467.55 dearer, and roughly half of that gap is the £250 arrangement fee. A representative APR is the rate the lender expects to give at least 51% of successful applicants: it is not a quote, and yours may be higher. Each example was read from the lender’s own page on 7 August 2026: TSB, HSBC, Lloyds. | ||||||||
The other six publish no complete example, and we would rather say so than build one for them. Barclays gives representative APRs in bands (14.9% from £1,000 to £5,000, 11.2% up to £15,000, then 8.5% from £15,001 to £25,000) but leaves the worked figures to its calculator.
Santander publishes a headline 11.2% and a calculator, and no worked example at all.
NatWest, Funding Circle, iwoca and Start Up Loans are the same shape: a calculator that returns a number from whatever you type into it. That is a different thing from a published example, and you can’t hold a lender to it.
The gap matters more than it sounds. Funding Circle’s “from 6.9% a year” is a floor for its strongest applicants, and a one-off completion fee lands on top of whatever rate you’re actually offered.
That fee is set for you personally and Funding Circle doesn’t publish it, which is precisely why no cheapest-loan claim on this page can include Funding Circle. Compare the offers you’re actually given, on total repayable and fees, rather than the advertised rates.
Early Repayment Charges and Other Costs
When a customer finally clears that overdue invoice, you’ll want to pay the loan off the same week. Most of the products here let you overpay or settle early without a straightforward penalty. NatWest confirms no early-closure charge, and Santander lets you overpay at no extra cost.
Two exceptions are worth knowing before you sign. HSBC deducts one month and 28 days’ interest from your rebate on full early settlement, rather than charging a formal early-repayment fee.
TSB applies break costs to fixed-rate loans over £25,000 on partial or full early repayment, and warns in its own words that these can be substantial depending on interest rates at the time.
Neither is a headline number, and both land at exactly the moment you thought you were saving money.
You feel the real costs at the start, not the finish. The TSB and HSBC examples above make the point without any modelling from us: a £250 fee turned a 1.34-point rate gap into a £467.55 one.
Work out what the whole loan costs you over the full term, then, rather than what it costs you each month.
Eligibility for Small Business Loans
Trading History and Time in Business
How long you have been trading is the first thing any of them looks at, and for some it settles the answer on its own. A Start Up Loan is built for the early stage, from before you have traded at all up to five years in, and it is taken out by you as an individual rather than by the company. Funding Circle sits on the other side of that line: it needs at least a year’s trading, so cross it off now if you’re younger than that.
You won’t find a published trading minimum at any of the six banks, and iwoca doesn’t publish one either. We checked every loan page, and where the matrix below reads ‘Not stated’, that’s why.
| Criterion | Start Up Loans | Funding Circle | iwoca | TSB | Barclays | HSBC | NatWest | Lloyds | Santander |
|---|---|---|---|---|---|---|---|---|---|
| Pre-revenue / not yet trading | Yes | No | Not stated | Not stated | Not stated | Not stated | Not stated | Not stated | Not stated |
| Under 6 months trading | Yes | No | Not stated | Not stated | Not stated | Not stated | Not stated | Not stated | Not stated |
| 6 to 11 months trading | Yes | No | Not stated | Not stated | Not stated | Not stated | Not stated | Not stated | Not stated |
| 12 to 23 months trading | Yes | Yes | Not stated | Not stated | Not stated | Not stated | Not stated | Not stated | Not stated |
| 2+ years trading | Yes (to 5 yrs) | Yes | Not stated | Not stated | Not stated | Not stated | Not stated | Not stated | Not stated |
| Existing account with the lender required | No | No | No | Yes | Not stated | Not stated | No, stated explicitly | Not stated | Yes |
| Limited company or LLP | Yes (loan is personal to the director) | Yes | Yes | Yes | Yes | Yes | Yes | Yes (guarantee required) | Yes (guarantee required) |
| Sole trader | Yes | Lender pages conflict | No | Yes | Not stated | Not stated | Not stated | Yes | Yes |
| Partnership | Yes | Lender pages conflict | No | Yes | Not stated | Not stated | Not stated | Not stated | Yes |
| Adverse credit considered | Not stated | Not stated | Not stated | Not stated | Not stated | Not stated | Not stated | Not stated | Not stated |
| “Not stated” means the lender doesn’t publish that criterion on its product page. None of the nine publishes an explicit adverse-credit threshold. Funding Circle’s own pages disagree on sole traders and partnerships, so those cells record the conflict rather than resolving it. The account-requirement row is the one most likely to end your shortlist early: TSB and Santander lend only to existing customers, so their rates are not open to you today unless you already bank there. Personal guarantee and asset security are set out separately in the table below, because they are different risks. Checked 7 August 2026. | |||||||||
Treat every ‘Not stated’ cell as a question for the lender, not a yes or a no. We couldn’t confirm those thresholds from the public pages, and we’re not going to guess at them on your behalf.
Business Structure: Sole Trader, Limited Company or LLP
How the business is set up rules some of these lenders out before anything else about you matters, and it’s the check most people leave until last. iwoca lends to limited companies and LLPs only, so a sole trader is shut out of it however long they have traded.
At the other end, a Start Up Loan ignores your structure entirely, because the borrower is you rather than the business. That is why it reaches founders who have not started trading, and it is also why the debt stays with you if the business closes. Lloyds and Santander sit somewhere in between: they lend to sole traders without asking for a guarantee, and require one from limited companies and LLPs, which puts a director in much the same position by a different route.
Funding Circle is the one we can’t settle for you. Its main business-loan page builds the no-credit-impact application around a limited company or LLP, while its own self-employed-loans page says it lends to sole traders, partnerships and limited companies alike. We are not going to pick whichever version reads more neatly. We’ve asked Funding Circle which product a sole trader’s application actually opens and will update this when it answers.
The structure rows in the table above carry the rest. If you are borrowing through a company and want the director-liability side set out properly, our guide to business loans for limited companies goes further than any comparison table can.
Credit Score, Affordability and Financial Health
Skip the hunt for a magic credit score: none of the nine publishes one. We looked, and what they all assess instead is affordability, whether you can service the repayments from real cash flow.
You can test the water without a mark on your file. NatWest and Lloyds both offer a soft online quote (Lloyds up to £25,000), and NatWest returns an indicative rate in about three minutes.
Use those soft quotes to find out where you stand before a full application leaves a hard footprint on your file.
Turnover, Security and Personal Guarantee Requirements
Don’t assume a hidden turnover bar you can’t see: Funding Circle doesn’t publish one, and neither do the banks on their small-loan pages. What matters more is what stands behind the loan.
Security means a specific asset backs the loan, so the lender can take it if you default. None of the unsecured products here works that way, though HSBC may ask for a debenture or fixed charge on larger cases.
A personal guarantee is a separate promise: a director agrees to repay personally if the company can’t. Funding Circle and iwoca both require one, and Lloyds and Santander require it from limited company or LLP applicants.
You give that guarantee so the lender has someone to pursue if the company folds. So your savings, not just the business, are on the line.
A Start Up Loan flips this: you’re the borrower from day one, so there’s no guarantee to give. That’s not the reassurance it sounds like. The debt is yours from the start and survives even if the business fails.
Read ‘no personal guarantee’ here as ‘the debt is already yours’, not ‘no personal risk’.
Three questions decide how exposed you actually are: who the law says is borrowing, whether you have promised to repay personally, and whether a named asset is on the line. The table below separates them.
| Product | Who Legally Borrows | Personal Guarantee | Asset Security | What That Means for You |
|---|---|---|---|---|
| Start Up Loans | You, personally | Not applicable | Not required | You are personally liable from day one; the debt survives if the business fails, with no guarantee to sign. |
| Funding Circle | The business | Yes, on every approved loan | Not required | Company debt, but a director stands behind all of it. |
| iwoca | The business (limited companies and LLPs only) | Yes | Not required | Company debt with a director guarantee; sole traders and partnerships cannot borrow here at all. |
| Lloyds | The business | Required from limited companies and LLPs | Not required as standard | A sole trader is already personally liable; a director signs to become so. |
| Santander | The business | Required from limited companies and LLPs | Not required as standard | Same shape as Lloyds, and Santander points you to its own guide before you sign. |
| Barclays | The business | Discretionary | Not required as standard | Ask at quote stage, because it is decided case by case. |
| HSBC | The business | Sometimes | May be requested (debenture or fixed charge, with an admin fee) | HSBC may require a debenture or fixed charge in some cases, so confirm the security position in your offer. |
| NatWest | The business | May be required | Not required as standard | Ask at quote stage. |
| TSB | The business | Not published on the product page | Available secured or unsecured | TSB warns that secured property, including your home, can be repossessed. |
| “Unsecured” answers only the asset column. It says nothing about the other two. The most personally exposed borrower in this table has no personal guarantee to give, because the loan was never the company’s to begin with. Where a lender does not publish a guarantee policy, ask before you apply rather than reading silence as no. Checked 7 August 2026, including Santander on personal guarantees and TSB on security. | ||||
TSB offers secured and unsecured loans, so the basis of your offer determines whether that repossession risk applies.
If a lender offers you Growth Guarantee Scheme finance, read who the guarantee is for. The British Business Bank gives the lender 70% cover, and only once it has finished chasing you. Its own wording leaves no room: the borrower always remains 100% liable for the debt. Five things worth knowing:
- The scheme generally supports facilities up to £2m per business group, but the minimum for a term loan or overdraft is £25,001. Most of the loans compared on this page sit below that floor.
- Pricing, fees and terms come from the accredited lender, not from the scheme, and the lender pays a fee for the guarantee.
- Personal guarantees can still be taken, at the lender’s discretion. What cannot be taken as security within the scheme is your main home.
- The British Business Bank states plainly that if a lender can offer a commercial loan on better terms, it will do so. So ask for both quotes and compare them.
- Turnover must be up to £45m, with the Chancellor’s July 2026 announcement raising that to £54m as lenders operationalise it.
How to Compare Small Business Loan Lenders
Choosing by Cost
Chasing the cheapest rate? Your cash flow is the real constraint, not the headline number. A Start Up Loan at 7.5% fixed is the lowest rate here if you qualify, but it caps at £25,000 and only in your first five years.
Funding Circle‘s ‘from 6.9% a year’ can undercut it for the strongest established applicants. Treat 6.9% as the best rate it gives anybody, not the rate you will get.
Yours may sit well above it, and a one-off completion fee is added on top of whatever you are offered.
Among the banks, HSBC‘s 8.6% above £10,000 and Barclays‘ 8.5% on £15,001 to £25,000 are the lowest you will find. Both rates apply only to the larger amounts, though. Ask for less and the price jumps above 11%.
TSB looks competitive at 9.94% until you put it next to the one number that can fairly be set against it. Both banks publish a worked example at £13,000 over 60 months: HSBC’s comes to £15,919.83, TSB’s to £16,387.38.
Nearly half that £467.55 gap is the arrangement fee TSB charges and HSBC does not. And you have to bank with TSB already to be offered it at all.
Compare the total cost of credit, fees included, rather than the headline rate. On a small loan, the cheapest rate and the cheapest deal aren’t the same lender.
Choosing by Speed and Approval Criteria
When the van breaks down on Friday morning, you need cash by the weekend, not a three-week wait. Ask which stage you are actually short of time on, because no lender here wins both.
If what you need is a firm answer, Funding Circle publishes the quickest decision at as little as an hour, then takes typically 48 hours to pay out.
If what you need is the money itself, iwoca gives many customers an instant decision and can fund the same or next business day.
You could have NatWest funds within 24 hours of approval, and Barclays or Lloyds within 48 hours of signing. If you can stand to wait a day, one of those is worth lining up for the keener rate.
What speed does not tell you is how likely you are to be approved, or why a lender prices where it does. Neither is published by any of the nine, so we will not infer it from how fast the money moves.
A Start Up Loan runs to a different clock, so we wouldn’t reach for it in an emergency: it carries a business-plan and affordability assessment, and how long that takes depends on your paperwork and your delivery partner. The plan, forecast and mentoring are part of the value, not obstacles.
Choosing by Loan Size, Repayment Term and Flexibility
You narrow the field fastest by amount. Need more than the £100,000 NatWest lends, the highest published unsecured ceiling among the banks here, and your realistic options are Funding Circle (to £750,000) or iwoca (to £1,000,000).
Need only a few thousand and the banks or a Start Up Loan serve you without a specialist’s rate. Barclays and HSBC stretch terms to ten years, which lowers the monthly cost but raises total interest.
Decide one thing before you shortlist: do you want the whole sum on day one, or the option to take part of it now and apply to top up later, as iwoca allows? That single choice removes half the list.
Who Small Business Loans Are Best For
Best for Established Businesses
If you’re an established limited company or LLP with a year-plus of trading, you hold the strongest hand. I’d get a Funding Circle quote before anything else: from 6.9% a year, up to £750,000, over terms to six years, with no early-repayment fee.
The trade-offs are a required personal guarantee and a one-off completion fee at drawdown, confirmed in your personalised quote. Weigh that fee against the rate saving before you assume it’s the cheapest deal.
If you already bank with a high-street lender, get their quote too. A relationship bank can be competitive on the larger amounts (8.5% to 8.6% at Barclays and HSBC) and may move faster on a customer it knows.
See if you qualify with Funding Circle →
Best for Short-Term Working Capital
When a supplier wants a deposit before your customer has paid, that gap is what short-term borrowing covers. For that, flexibility beats a low headline rate, and iwoca suits it best.
You get a decision often within hours from iwoca, with no fee on a 12-month loan and no early-repayment fee ever.
You can also draw only the slice of an approved amount you actually need and pay interest only for the days you hold it. What you pay for that is a 49% representative APR.
Be clear about what that flexibility is, though. It is not a facility you dip into at will.
Once you have repaid a third of a 12-month loan, or 15% on a longer one, you can apply for a top-up, and iwoca decides again. It may want updated bank statements or Open Banking access first.
Keep the balance small and the window short. At that rate, every week you hold the money costs you.
A smaller high-street loan can also work if you can wait a day or two. NatWest and Lloyds fund quickly with no early-repayment charge, so clear the balance the moment the receivable lands.
Best Small Business Loan for the Amount You Need
The amount you want removes more lenders than anything else on this page, and it does it quietly. Four of the nine stop at £25,000, and two of them change their price part-way up the range, so the shortlist you are choosing from at £10,000 isn’t the one you’re choosing from at £50,000.
| What You Need | Lenders Whose Published Range Covers It | What Changes at This Level |
|---|---|---|
| £10,000 | All nine | Funding Circle starts here; HSBC changes rates above £10,000; Barclays remains in its 11.2% band. |
| £25,000 | All nine, and the ceiling for four of them | Barclays’ cheapest band, 8.5%, begins at £15,001. |
| £50,000 | Funding Circle, iwoca, NatWest, Lloyds, Santander | The four £25,000 products drop out. Lloyds holds its fixed 11.2% representative APR all the way to its £50,000 ceiling. |
| £100,000 or more | Funding Circle (to £750,000), iwoca (to £1,000,000) | NatWest stops at £100,000; Barclays reaches that only for existing customers. Only the two specialists publish terms above it. |
| Ranges are each lender’s own published figures, checked 7 August 2026. A Start Up Loan is capped at £25,000 per applicant, though a business can raise up to £100,000 across its owners. Sitting inside a lender’s range is not an offer: every one of these still prices and approves case by case. | ||
At £10,000, Funding Circle starts lending and will not lend below that amount. HSBC charges 11.3% up to £10,000 and 8.6% above it. At £25,000, high-street pricing is at its best just before Start Up Loans, TSB, Barclays and HSBC all stop.
Two things go wrong at this stage. The first is applying just underneath a price step: £10,000 at HSBC is charged at 11.3% and £10,100 at 8.6%, which is a lot of money to lose to a rounding habit. If your figure sits near a boundary, ask for the quote on both sides of it. The second is borrowing to the ceiling because the ceiling is there.
Before you settle on a number, look at it as a monthly repayment rather than a total. Our business loan calculator will do that against a term you choose, and an amount you can service in a quiet month is worth more to you than the largest one a lender will approve.
Best Small Business Loan for a New or Young Business
If you haven’t started trading, or you’re inside your first five years, a Start Up Loan from the British Business Bank leads a short list. It is 7.5% fixed, £500 to £25,000 per applicant, and it reaches founders from before they have traded up to five years in.
Twelve months of free mentoring comes with it, and none of that is the thing to weigh. A Start Up Loan is a personal loan used for business purposes: you are the borrower, the debt is yours from the first day, and it outlives the business. There’s no personal guarantee to sign because there’s nothing left to guarantee. Read that as a harder position than a company loan with a director’s guarantee behind it, not a softer one.
Funding Circle needs a year of trading, so it’s closed until you get there. The banks publish no trading minimum at all, which isn’t the same as not having one; where the matrix above reads “Not stated”, it means we couldn’t find a figure on the lender’s page. Once you pass a year, get a Funding Circle quote alongside whichever bank you already use, because that is the point at which the comparison genuinely opens up for you.
The scheme in full, including what the delivery partners want to see in a business plan, is in our guide to Start Up Loans.
Best Small Business Loan If You Don’t Want to Switch Bank Accounts
Two of the nine are shut to you here, and it is the condition people miss until they’re halfway through an application. TSB and Santander lend only to businesses that already bank with them, and Santander says so plainly: you can apply if you are an existing Santander Business Current Account holder. However good either rate looks in the table, you can’t act on it this week.
NatWest is the useful exception among the banks, because it states outright that you don’t need a NatWest business account to apply. Funding Circle, iwoca and Start Up Loans sit outside the banking relationship altogether, which is the practical reason they suit a business that has just switched banks, or one whose own bank has already turned it down. Barclays, HSBC and Lloyds publish no account requirement on their small-business loan pages, so treat that as a question still open rather than as a yes.
The alternative has a price worth naming. Opening a business account to reach a rate costs you days you may not have, and it leaves you running two banking relationships for the life of the loan.
When Another Type of Business Finance May Be Better
You don’t always need a term loan for the job. If one of these fits what you’re doing, it’ll usually cost less or match your cash flow more closely.
You’re not looking at ranked substitutes for a term loan here, just different shapes of finance for different jobs.
- Revolving credit facility. A pre-agreed limit you draw on and repay repeatedly, for a need that rises and falls rather than sitting at a fixed sum.
- Business overdraft. A buffer on your current account for short, unpredictable gaps rather than a planned lump sum.
- Invoice finance. Advances cash against unpaid invoices, so the cost tracks your sales ledger, not a fixed monthly repayment.
- Asset finance. Spreads the cost of equipment, vehicles or machinery, secured on the kit itself rather than the wider business.
- Merchant cash advance. Repaid as a percentage of your card takings; it flexes with trade but is typically expensive, so treat it as a last resort.
The first three of those are the ones people confuse with a term loan, and the difference is not the rate. It is what happens to the money between the day it arrives and the day you need it again.
| Term Loan | Revolving Credit Facility | Business Overdraft | |
|---|---|---|---|
| What it suits | One purchase or project with a cost you already know | A need that rises, falls and comes back, such as stock ahead of a season | Short, unpredictable gaps on the current account |
| How you repay | Fixed instalments to a fixed end date | Draw, repay and draw again inside an agreed limit | Whatever clears the moment money lands |
| What it costs while the money sits idle | Interest runs on the whole balance from day one, working or not | Interest only on what you have drawn, usually alongside a fee on the limit you are not using | Interest only while you are overdrawn, usually alongside an arrangement or usage fee |
| A routing summary of how the three products are built, not a price comparison: the cost of any of them depends on the lender and on your business. A term loan is the wrong shape when the need keeps coming back, and an overdraft is repayable on demand, which is the part that catches people out. The detail sits in our guide to revolving credit facilities and our working capital finance section. | |||
Match the tool to the job, and you’ll often skip a term loan’s cost entirely. Sometimes the answer is not to borrow at all, and no page that earns a commission on the click should skip past that.
A loan turns a cash problem into a fixed monthly obligation. That helps when the money buys something that earns or protects more than it costs. It makes things worse when the shortfall is structural. Before you apply, be honest about these:
- You would be borrowing to cover wages, rent or tax you already cannot meet from trading, rather than to fund something specific.
- You cannot say what the money buys, or you cannot show it earning or protecting more cash than the loan costs you in total.
- The repayment only works in your best-case month. Run it against a downside month instead, with a late payer and a quiet fortnight in it.
- The term outlives the thing you are funding, so you are still paying for equipment or stock long after it has stopped earning.
- You already have borrowing you are servicing with difficulty, or you would be taking a loan to repay one.
- Losing the personal guarantee, or the Start Up Loan you are personally liable for, would take savings or a home you cannot afford to lose.
Frequently Asked Questions
What is the easiest small business loan to get in the UK?
Two answers, and which is yours turns on how long you’ve traded. If you haven’t started trading yet, a Start Up Loan from the British Business Bank is among the most accessible: it lends to individuals from before trading up to five years in. If you’re an established limited company or LLP that needs a fast decision, iwoca often decides within hours. None of these lenders publishes a minimum credit score, so it turns mainly on how long you have traded and whether you can afford the repayments.
What is a good interest rate for a small business loan?
The Bank of England reported an effective rate of 6.36% on new bank lending to small and medium-sized businesses in June 2026, published on 29 July 2026. Read that as a market average rather than an offer: it covers secured and larger lending that a small unsecured application won’t reach, and every advertised rate on this page sits above it. On an unsecured small-business loan, a quote in single figures is a good outcome. Anything in the twenties or higher is buying you speed or acceptance rather than value.
What is the cheapest small business loan?
We don’t name one, and it isn’t caution talking. The rate column here mixes starting rates, fixed rates, representative APRs, a 30-day rate and a calculator output, and several banks price in bands so the figure shown is not the rate at every amount. Only one genuine like-for-like comparison exists on this page: HSBC and TSB both publish a £13,000 example over 60 months, and HSBC is £467.55 cheaper across the term. Compare total amount repayable with fees included, at the amount you actually want. That gives you a real answer for your own business, which a ranking of five different measures never could.
Can I get a business loan with bad credit?
None of the nine lenders on this page publishes a bad-credit policy, so we won’t claim one they don’t state. In practice, specialist lenders weigh trading performance and affordability alongside your credit file. Expect a higher rate and, in most cases, a personal guarantee. Ask each lender directly before applying, and see our guide to business loans for bad credit for the options compared.
How much can a small business borrow?
Anywhere from £500 to £1,000,000 across the lenders here, and the amount you want narrows the list faster than anything else. A Start Up Loan offers up to £25,000 per applicant (£100,000 per business across the owners). Among the banks, Barclays, HSBC and TSB lend up to £25,000 on their small-business products, Lloyds and Santander up to £50,000 and NatWest up to £100,000. Specialist lenders go further: Funding Circle up to £750,000 and iwoca up to £1,000,000. Read those as the ceilings of the named products rather than of the banks themselves: larger lending exists, but it is usually secured, priced case by case and not advertised with a rate.
How long does it take to get a business loan?
Separate two things here, because lenders advertise them interchangeably: how fast you get a decision, and how fast the money lands. Funding Circle publishes the quickest decision of the nine, in as little as an hour, then funds typically within 48 hours. iwoca gives many customers an instant decision and can fund the same or next business day, so it usually gets money to you soonest. NatWest can fund within 24 hours of approval, and Barclays and Lloyds within 48 hours of signing. TSB and Santander publish no timing for any stage. A Start Up Loan is the slowest, because it needs a business plan, a cash-flow forecast and mentor matching, and the timing depends on your paperwork and your delivery partner rather than a published service level. None of these is a guaranteed funding time: each assumes you are approved and your paperwork is clean.
Do I need a personal guarantee for a business loan?
Often, but not always. Funding Circle and iwoca both require a personal guarantee, and Lloyds and Santander require one from limited company and LLP applicants. Barclays, HSBC and NatWest may request one depending on the application, and TSB does not publish a policy on its product page. A Start Up Loan has no guarantee to give, because it is a personal loan to you rather than to the company, which means the debt is yours from the start and survives even if the business fails. A government-backed Growth Guarantee Scheme facility does not change this: guarantees can still be taken at the lender’s discretion, though your main home cannot be taken as security within that scheme.
Are business loans regulated by the FCA?
Mostly not, and the lender’s own authorisation is a poor guide. Most lending to limited companies and LLPs sits outside the FCA’s consumer-credit rules, even where a director signs a personal guarantee. Some borrowing by sole traders, small partnerships and other relevant recipients of credit may be regulated, depending on the amount and the agreement. Read the agreement itself rather than assuming that an FCA-authorised lender makes your particular loan a regulated one. Our business loan guide sets the regulatory position out in full.
How We Reviewed Small Business Loan Lenders
Product universe. We compare nine UK business loan products: British Business Bank Start Up Loans, Funding Circle, iwoca, TSB, Barclays, HSBC, NatWest, Lloyds and Santander.
This is a curated panel of lenders with active, checkable products, not a whole-of-market list. Many other banks and specialist lenders also operate here.
What we screened and left out, and why. Metro Bank publishes an attractive 9.6% typical fixed APR on £2,000 to £60,000 with no arrangement fee, and we screened it.
We left it out because its own page labels that rate correct as at May 2022, and because it tells applicants they need a Metro business account and that it will likely need some security.
A four-year-old rate label on a product that may be secured is not a figure we will put in a comparison table.
We would rather say that than quietly drop the lender. Fleximize and Capify recur on competitor shortlists and are candidates for the next review, but neither publishes terms we have verified directly yet.
Marketplaces and brokers are excluded from the panel by definition: they match you to lenders rather than lending themselves.
Ranking criteria. We assessed each lender on cost, eligibility, features and ease of access. Cost and eligibility carry the most weight, because they decide whether a loan is affordable and actually open to you.
How we award a category. Category picks are chosen for the named situation, not as a universal best-overall claim, and two rules bind them.
We give no “lowest” award across products that publish different measures, which is why the one rate badge names its universe: the lowest starting rate in this panel. The bank APRs are band-priced and cannot be ranked across amounts.
We give no “fastest” award at all, because application, decision and funding are separate stages, and different lenders lead on different ones.
How we checked the facts. We checked each lender’s published rates, loan sizes, terms, fees and eligibility against its own product page on 7 August 2026.
Bank Rate and the Monetary Policy Committee dates come from the Bank of England, and the Growth Guarantee Scheme terms from the British Business Bank.
We read two further sources on 19 August 2026: the Bank of England Money and Credit release for June 2026, for the SME lending benchmark, and the Financial Conduct Authority Handbook, for the £25,000 regulated-agreement line and for who can take a complaint to the Financial Ombudsman Service. Both carry their own date in the text, because they move on a different cycle from lender pricing.
We no longer convert those rates into a single hypothetical loan. Where a lender publishes a complete representative example we reproduce it at the amount and term the lender chose.
Where a lender only offers a calculator, we say so rather than generating a figure. We didn’t test any application first-hand.
Where lenders contradict themselves. When a provider’s own pages disagree, we record the conflict and tell you to confirm it, rather than picking the version that reads better. Funding Circle’s legal-structure eligibility is currently in that state.
Regulatory note. Most lending to limited companies and LLPs sits outside the FCA’s consumer-credit rules, even where a director gives a personal guarantee.
Some borrowing by sole traders, small partnerships and other relevant recipients may be regulated, depending on the amount and the agreement. Check the agreement rather than the lender’s authorisation.
This page is editorial content, not regulated financial advice, and credit is subject to status and approval.
Update cadence. We re-verify every lender whenever a provider changes pricing, eligibility or terms, and review the whole panel on a rolling basis.
Each figure carries the date we last checked it, so you can see for yourself how current it is. Some links here are affiliate links; see our editorial policy.