Best Startup Business Loans UK: Rates and Lenders Compared

Tide Funding Options

Tide Funding Options connects UK businesses with lenders across business loans, invoice finance, bridging, merchant cash advances and commercial mortgages.

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Overview Card details Eligibility Pros & Cons Key Features

Best for: Businesses wanting to compare multiple funding types in one place

Watch out: Rates and terms vary by lender; always check the final offer directly with the matched provider

Not ideal if: Businesses with a strong existing bank relationship who have already secured competitive terms

Products CoveredLoans, bridging, invoice finance, MCA, commercial mortgages

Minimum AmountFrom £1,000 (varies by product)

Eligibility: UK businesses; eligibility criteria depend on the specific funding product and matched lender

Not ideal if: Businesses with a strong existing bank relationship who have already secured competitive terms

Watch out: Rates and terms vary by lender; always check the final offer directly with the matched provider

Multiple funding types covered: loans, bridging, invoice finance, MCA and more

Compare options without committing to a single lender

Backed by Tide’s SME network

Not a direct lender: you are matched to third-party providers

Final rates and terms depend on the matched lender, not Tide

Product availability may vary by business type and trading history

Business loans, bridging loans, invoice finance, merchant cash advances, and commercial mortgages

Single entry point to compare multiple funding options

Available to Tide members and non-members

British Business Bank Start Up Loans

The government Start Up Loans scheme, run by the British Business Bank, is the standout route for a true startup: a fixed 7.

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Overview Card details Eligibility Pros & Cons Key Features

Best for: Pre-revenue and early-stage founders wanting affordable, government-backed finance

Watch out: The cap is £25,000 per founder, and you need a business plan and forecast; it takes four weeks

Not ideal if: Established businesses needing more than £25,000 each, or anyone in active bankruptcy, a DRO or an IVA

Fixed APR7.5%

Per founder£500 to £25,000

Eligibility: UK business not yet trading or trading up to 5 years (60 months), applicant aged 18+, viable business plan; ineligible during active bankruptcy, a DRO or an IVA

Not ideal if: Established businesses needing more than £25,000 each, or anyone in active bankruptcy, a DRO or an IVA

Watch out: The cap is £25,000 per founder, and you need a business plan and forecast; it takes four weeks

Fixed 7.5% APR, the same for every applicant

No collateral and no personal guarantee required

Includes 12 months of free mentoring and business support

Capped at £25,000 per founder (up to £100,000 across a team)

Application takes four weeks and needs a business plan

Assessed on your personal credit, so adverse credit can still count against you

Government-backed scheme delivered by the British Business Bank

Fixed 7.5% APR with no guarantee, £500 to £25,000 per founder

Free 12-month mentoring, templates and provider discounts

Barclays Business Loan

Barclays is the strongest high-street option here for unsecured borrowing: up to £100,000, terms to 10 years, no arrangement fee and no early repayment charge.

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Representative APR8.5% to 14.9%

Overview Card details Eligibility Pros & Cons Key Features

Best for: Established firms and startups wanting a high-street rate with a long term

Watch out: Pricing above £25,000 is agreed case by case, and approval is slower than the specialist lenders

Not ideal if: Businesses needing funds the same day, or without a Barclays business account

Representative APR8.5% to 14.9%

Arrangement feeNone

Eligibility: UK-registered business, typically a Barclays business current account; startups accepted on forecasts

Not ideal if: Businesses needing funds the same day, or without a Barclays business account

Watch out: Pricing above £25,000 is agreed case by case, and approval is slower than the specialist lenders

Up to £100,000 unsecured, one of the higher high-street ceilings

No arrangement fee and no early repayment charge

Accepts startups on forecast figures; optional six-month repayment holiday

Approval can take days rather than hours

In practice needs a Barclays business current account

Pricing above £25,000 is bespoke and not published

Fixed rate for the full term with predictable repayments

Optional six-month repayment holiday at the start (interest still accrues)

Up to £100,000 unsecured over terms to 10 years

iwoca Business Loan

iwoca’s Flexi-Loan lets you draw, repay and redraw without reapplying, and you only pay interest for the days you use the money, which suits lumpy cash flow.

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Representative APR49% APR

Overview Card details Eligibility Pros & Cons Key Features

Best for: SMEs needing fast, flexible credit without fixed monthly repayments

Watch out: The 49% representative APR is expensive; judge it on total cost for short borrowing, not the headline

Not ideal if: Sole traders, who are not eligible, or anyone wanting the lowest possible rate

Representative APR49% APR

Arrangement feeNone

Eligibility: From 3 to 6 months trading, UK limited company, LLP or registered partnership (not sole traders), UK business bank account, Open Banking, personal guarantee required

Not ideal if: Sole traders, who are not eligible, or anyone wanting the lowest possible rate

Watch out: The 49% representative APR is expensive; judge it on total cost for short borrowing, not the headline

Same-day decision common, funds often within 24 hours

Flexi-Loan: draw, repay and redraw without reapplying

Interest charged only for the days the money is used; no early repayment fees

49% representative APR is expensive versus high-street lenders

Personal guarantee required from all borrowers

Does not lend to sole traders

Revolving Flexi-Loan: borrow, repay and borrow again without reapplying

No early repayment charges on any product

Open Banking underwriting; funds same or next business day

Fleximize Business Loan

Fleximize sits between the high-street banks and the rapid fintechs: rates from 0.

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Overview Card details Eligibility Pros & Cons Key Features

Best for: Established businesses wanting fast, FCA-regulated lending with penalty-free early repayment

Watch out: The rate is quoted per deal rather than published, and you need 12 months trading and a £10,000 minimum

Not ideal if: Businesses under 12 months old, or anyone needing same-day funds

From rate0.9% per month

Early repayment feeNone

Eligibility: 12 or more months trading, UK limited company or LLP, minimum £10,000 loan, personal guarantee required

Not ideal if: Businesses under 12 months old, or anyone needing same-day funds

Watch out: The rate is quoted per deal rather than published, and you need 12 months trading and a £10,000 minimum

No early repayment penalty, so you save interest by settling early

FCA-regulated with Financial Ombudsman access

Funds within 48 hours of a complete application

Rate is quoted per deal rather than published upfront

12-month minimum trading excludes early-stage businesses

Minimum loan of £10,000

Rates from 0.9% per month with no early repayment charges

FCA-regulated lender with Financial Ombudsman access

Funding within 48 hours of a complete application

Capify Business Loan

Capify takes cases most lenders decline, weighing card turnover and cash flow rather than a clean credit file, and it can fund the same day.

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Overview Card details Eligibility Pros & Cons Key Features

Best for: Businesses with adverse credit or CCJs needing fast funding

Watch out: A processing fee (£249 to £749) and monthly service fee stack on top of the factor rate, so the total cost is high

Not ideal if: Businesses that qualify for a bank or Funding Circle rate, where borrowing is far cheaper

PricingFactor rate

Adverse creditConsidered

Eligibility: 12 or more months trading, at least £10,000 monthly turnover (MCA needs £20,000 monthly card sales), UK limited company, sole trader or partnership; adverse credit considered

Not ideal if: Businesses that qualify for a bank or Funding Circle rate, where borrowing is far cheaper

Watch out: A processing fee (£249 to £749) and monthly service fee stack on top of the factor rate, so the total cost is high

Considers adverse credit and CCJs where most lenders decline

Same-day decision; funds often within 24 hours

No early repayment charges

Factor-rate pricing means a high effective cost, often above 50% APR

Processing and monthly service fees add to the total

Short term (3 to 12 months) limits it to working capital, not large projects

Open to businesses with poor or adverse credit history

Factor-rate pricing rather than a fixed APR

Flexible daily, weekly or monthly repayments

How Startup Business Loans Work

Loan Amounts, Terms and Who Lends to Startups

Your options depend on how long you’ve traded: a pre-revenue startup leans on the Start Up Loans scheme or Barclays, both of which lend on your business plan and your cash flow, not on accounts.

Amounts run from £500 to £25,000 per founder on the scheme, up to £100,000 from Barclays, with terms of one to five years.

No trading history doesn’t shut you out. That’s what the scheme exists for.

Why Start Up Loans Carry No Personal Guarantee

The government scheme is unusual: it takes no security and no personal guarantee, because the loan is made to you personally for the business.

Commercial lenders are different; Barclays, iwoca and Capify will usually want a director’s personal guarantee once you borrow through a limited company.

Picture your accountant emailing the cash-flow forecast and survival budget to your adviser on a Friday while you wait on a decision.

How Startup Funding Reaches You

Speed varies a lot: the scheme takes four weeks with an adviser, Barclays funds in days, and iwoca can decide the same day once you’ve a few months of trading.

That month with an adviser buys you mentoring and the cheapest rate, so the wait is often worth it for a startup.

Startup Business Loan Costs and Fees

Interest Rates and Representative APR

You’ll pay a fixed 7.5% on a Start Up Loan, 8.5% to 14.9% from Barclays by amount, and far more from the fast specialists, where iwoca’s representative APR is 49%.

The Bank of England base rate is 3.75%, with its next decision on 18 June 2026, but the scheme’s 7.5% is fixed whatever happens.

We rate the scheme cheapest for a genuine startup, with Barclays close behind for larger sums.

Cheap, fixed and unsecured is hard to beat. That’s why we rank the scheme first.

Fees and the Total Cost of a Startup Loan

Your headline rate isn’t the only cost, but the startup routes are clean: the scheme charges no setup or early repayment fees, and Barclays waives arrangement fees too.

Fast specialists fold their cost into the rate or a factor rate instead, so check the total against your cash flow before you sign.

Early Repayment on a Startup Loan

If you might clear the loan early, the scheme and Barclays let you do it penalty-free, while some bank fixed-rate loans charge an exit fee.

Penalty-free early repayment quietly saves you money. That’s worth checking before you sign.

Eligibility for Startup Business Loans

Trading History and Your Stage

Your stage decides the door: pre-revenue founders use the scheme or Barclays, three-to-six-month traders can add iwoca, and only 12-month businesses reach Capify or Fleximize.

True pre-revenue startups are shut out of the fast lenders, so don’t waste a hard search on iwoca or Capify before you’ve actually traded.

Picture your accountant exporting the first months of bank statements through Open Banking while you wait on a same-day reply.

Personal Credit and Your Business Plan

With no trading record, your personal credit file does the heavy lifting, alongside a business plan, a cash-flow forecast and a personal survival budget.

A clean file opens the scheme and Barclays, and the assessment is on you, the founder, not the company.

Startup Loans and Bad Credit

If your credit is poor, a CDFI is often your best route: the not-for-profit lenders we rate weigh your story and plan over a score, and the average startup loan is £12,594.

The scheme considers minor blips case by case, but an active bankruptcy, DRO or IVA rules you out outright.

How to Compare Startup Business Loan Lenders

Comparing Startup Lenders by Cost

If cost matters most, the fixed 7.5% scheme beats almost everything for a startup, so compare other offers against it on what they cost your cash flow, not just the headline APR.

We rate Barclays next for larger sums, with the fast specialists justified only when you genuinely need the speed.

Comparing Startup Lenders by Speed

If you need money quickly, Barclays funds in days and iwoca often the same day, while the scheme’s adviser process takes four weeks.

That month buys you mentoring and the cheapest rate, so the wait is usually worth it for a pre-revenue founder.

Comparing Startup Lenders by Stage and Amount

Match the lender to your stage and sum: the scheme up to £25,000 a founder, Barclays to £100,000, iwoca for early trading, and a CDFI when the banks say no.

The right lender fits your stage, not the biggest name. That’s the call that saves you money.

Who Startup Business Loans Are Best For

Best for Pre-Revenue Startup Founders

If you haven’t traded yet, the Start Up Loans scheme is usually your cheapest route, and Barclays is the main bank that will look at your forecast rather than your accounts.

We rate the scheme first here because it asks no guarantee and adds 12 months of mentoring.

Best for Early-Stage Trading Startups

If you’ve traded a few months and need cash fast, iwoca lends from three months, though under six months it caps you at £10,000.

Once you pass a year, Fleximize and Capify, the lenders we rate for trading startups, open up, trading a higher rate for speed and flexibility on your cash flow.

When Another Route Beats a Startup Loan

If you’re high-growth and burning cash, equity or a grant may beat debt, because there are no monthly repayments to choke your cash flow.

A CDFI suits founders the banks decline, and a grant beats any loan because you never repay it.

Frequently Asked Questions