The Fees That Sit on Top of the Rate
You pay more than interest on a business loan, and the extras decide the real cost your cash flow carries. Arrangement or completion fees, early-repayment charges, broker commission, and (on secured loans) valuation and legal fees all stack on top.
Read the APR first: it bakes in the compulsory fees, but the rest you have to hunt for.
Get the full fee schedule in writing before you sign. We read every lender’s published fee terms, and the gap between the headline rate and the schedule is where the cost hides. On a small high-street loan the fees can be nil; on a secured deal they run into thousands, payable even if it falls through.
Arrangement and Completion Fees
You’ll often pay nothing upfront on a high-street loan. Barclays, NatWest, HSBC, and Lloyds all charge a £0 arrangement fee on their small business loans, so the rate is the cost.
Alternative lenders charge instead of waiving it. Funding Circle adds a one-off completion fee to your loan balance at drawdown, repaid over the term, and the amount appears in your personalised quote rather than on its website.
A fee added to your balance earns interest too, so you pay for it twice.
Early Repayment Charges
Check the early-repayment clause before you sign, because settling early should free up your cash flow, not cost you. iwoca, Funding Circle, Barclays, and NatWest charge nothing to clear a loan early.
HSBC is the exception. Clear the loan early after a good quarter and it docks a month plus 28 days’ interest from the settlement. If your loan is a regulated credit agreement, the Consumer Credit (Early Settlement) Regulations 2004 let the lender charge interest for 28 days after your notice, plus one more month where the term runs over a year.
Secured loans bite you harder. A commercial mortgage or large fixed-rate loan usually sets an early-repayment or break charge in the agreement, so read that clause before you fix.
Alternative-Lender and Merchant Cash Advance Fees
A merchant cash advance stacks fees rather than charging one. Capify, for instance, adds origination and processing fees on top of the factor rate, and sets them out in writing before you sign.
You get no APR and no early-settlement saving on a factor rate. Advance £20,000 at 1.2 and you repay £24,000, fixed: clearing it fast just raises the effective rate.
With an advance, speed costs you; it never saves you.
Secured Loan Fees You Pay Even If It Falls Through
A secured loan brings third-party fees you don’t get back. A RICS valuation and the solicitor’s legal work are yours to cover, and they fall due even if the loan never completes.
A valuation can come in low after you’ve paid for it: the deal collapses, but the surveyor and solicitor still invoice you. Budget for those costs before you commit.
On a secured deal, you pay real fees before the loan is real.
Broker Fees and Commission
Ask a broker exactly how they’re paid. Most are paid a commission by the lender, built into your rate, but some charge you a fee directly as well.
Commission baked into the rate isn’t free; you carry it in every repayment. In motor finance, the FCA banned discretionary commission in January 2021, where a broker could inflate your rate to earn a bigger payout. We found no equivalent ban for business loan brokers, so ask any broker how they are paid.
Get the exact figure and how it affects your rate, in writing. A broker who won’t put their commission on paper is one to walk away from.
Default, Late-Payment, and Other Charges
You’ll trigger penalty fees if a repayment is missed: even the month a big supplier invoice and payroll land together. Lenders charge a flat late fee or a penalty rate on the overdue amount, and persistent misses bring collection costs.
A revolving facility can charge for money you don’t use. Some lenders levy a non-utilisation fee, charged as a yearly percentage of the undrawn part of your limit, to cover reserving the capital.
A missed payment costs more than the fee: it also marks your credit file.
How to Keep the Fees Down
You can cut the fees more than the rate. Favour a lender with no arrangement or early-repayment fee, settle early where it’s free, and read any completion fee into the total before you compare.
Avoid paying a broker upfront in cash. A legitimate broker is paid by the lender or bills you transparently: an upfront cash demand to “release” a loan is a fraud marker, not a fee.
A Start Up Loan charges no fees at all (no arrangement, no early-repayment) at a fixed 7.5%. We send eligible founders there before the fee-heavy alternatives.
Business Loan Fee FAQs
What fees does a business loan have besides interest?
The common ones are an arrangement or completion fee (nil on most high-street small loans; Funding Circle adds a one-off completion fee shown in your quote), an early-repayment charge (HSBC deducts a month plus 28 days’ interest, though many lenders charge nothing), and broker commission. Secured loans add a RICS valuation and legal fees, and merchant cash advances stack processing and origination fees on top of the factor rate. The APR already includes compulsory fees, so it is the fairest comparison once you have it.
Do high-street banks charge an arrangement fee?
Not on their small business loans. Barclays, NatWest, HSBC, and Lloyds all charge a £0 arrangement fee on their core small-business lending in 2026, so the interest rate is effectively the cost. Alternative lenders are different: Funding Circle, for example, charges a one-off completion fee, shown in your personalised quote. It is added to your loan balance at drawdown and repaid over the term rather than deducted from the advance.
Will I be charged for repaying a business loan early?
Not with most of the lenders we checked. iwoca, Funding Circle, Barclays, and NatWest let you settle early with no charge, so clearing the balance saves you the remaining interest. HSBC is the exception: it deducts one month plus 28 days’ interest. Secured loans and commercial mortgages are stricter: most set an early-repayment or break charge in the agreement, so read that clause before you sign.
How is a finance broker paid?
Usually by the lender, as a commission built into the rate you’re quoted, or directly by you as a fee. In motor finance, the FCA banned discretionary commission in January 2021, but we found no equivalent ban for business loan brokers. Ask any broker for the exact commission and how it affects your rate, in writing, and never pay an upfront cash fee to “release” a loan: that’s a fraud marker.
What fees does a merchant cash advance have?
A merchant cash advance is priced with a factor rate rather than an APR: advance £20,000 at a factor of 1.2 and you repay £24,000, fixed, with no saving for repaying early. On top of that, providers such as Capify add origination and processing fees, which Capify sets out in writing before you sign. Those layers add to the cost, which is why the total repayable is the number that matters, not the headline rate.
How we put this guide together
What we covered. This guide sets out the fees on a UK business loan in 2026, drawing on lender fee pages, the Consumer Credit (Early Settlement) Regulations, FCA rules on commission, and British Business Bank scheme terms. We do not rely on comparison-site summaries or aggregator data.
Data sources. Fees were checked against primary sources in October 2026: Barclays, NatWest, HSBC and Lloyds business-loan pages, Funding Circle, iwoca and the British Business Bank, and the Consumer Credit (Early Settlement) Regulations 2004 on legislation.gov.uk. Capify’s site refused our checks, so we describe its fees without figures.
How we handle conflicts. Where a lender does not publish a figure, such as the Funding Circle completion fee, we describe the fee and leave out any number we could not confirm at the source.
Update cadence. We re-verify this page regularly, and whenever a lender changes its fees. The verification date reflects the most recent full review. Some links on this page are affiliate links, see our editorial policy.
Regulatory note. This page is editorial content, not regulated financial advice. Credit products are subject to status and approval, and most business lending sits outside the FCA consumer-credit perimeter. Compare offers directly with providers before you apply.