David Allan

Experly compared by David Allan

Products Updated May 28, 2018

Compare Business Loans

If you need finance for business use then our approved business lenders and finance brokers below can help. Commercial finance and loans can be arranged for all business types and sizes, from smaller sole trader businesses, the self employed and SME’s.

Our business finance experts can compare the market from over 70 approved lenders. From start up's to SME's we've got you covered:

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All credit types
Rated 5.0/ 5

Choice Loans Why?
Why?

This provider is our Expert’s Choice in its category as it won tops marks for the following.

  • TRUST
  • VALUE
  • EXPERTISE & KNOWLEDGE
  • CUSTOMER SERVICE

Learn more about how we review and assess the providers here on Lending Expert.

Loan Amount
£5,000 - £10,000,000

Representative APR
From 2.6%

Loan Term
1 - 35 years

Loan Type
Business Finance Broker

Status
Sole Trader & Limited Companies

Choice business loans can arrange a wide range of business finance solutions for business of all sizes. Services include business loans. Crowdfunded business Loans, Short term unsecured business loans, Merchant cash advance, Pension led business finance, Overdraft alternatives, Asset finance, Asset backed loans, Invoice finance, Commercial mortgages.

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All credit types
Rated 5.0/ 5

Funding Options

Loan Amount
£5,000 - £10,000,000

Representative APR
From 2.6%

Loan Term
1 - 35 years

Loan Type
Business Finance Broker

Status
Sole Trader & Limited Companies

Funding Options is a credit broker and not a lender. They match small businesses like yours to different loan providers every day. Whether it's business loans, commercial mortgages, invoice financing, asset leasing, growth finance or something else, they can help find you a great deal.

Learn More Available via broker only
All credit types
Rated 4/ 5

Funding Circle

Loan Amount
£5,000 - £1,000,000

Representative APR
From 3%

Loan Term
1 - 5 years

Loan Type
Business Use

Status
Sole Trader & Limited Companies

Funding Circle say yes to funding a business every 5 minutes. They offer fast, affordable finance to help your business grow. Unsecured loan up to £500,000.

Learn More Available via broker only
All credit types
Rated 4/ 5

Ferratum

Loan Amount
£2,000 - £50,000

Representative APRC
%

Loan Term
5 - 1.5 years

Loan Type
Working Capital

Status
Sole Trader & Limited Companies

Ferratum Business loans provides small business owners with the working capital they need when they need it. They use both state of the art technology and highly trained loan advisors to approve business loans faster and more often.

Learn More Available via broker only
All credit types
Rated 4/ 5

IWOCA

Loan Amount
£1,000 - £15,000

Representative APR
49%

Loan Term
0 - 1 years

Loan Type
Business
Cash Flow

Status
Sole Trader & Limited Companies

With iwoca you can register in a matter of minutes and its completely free to sign up. The amount you can borrow depends on your business income. They can typically lend up to one month’s revenue or up to £10K if you're a startup business.

Representative Example

Learn More Available via broker only
All credit types
Rated 4/ 5

Start Up Loans

Loan Amount
£500 - £25,000

Representative APRC
%

Loan Term
1 - 5 years

Loan Type
Start Up's

Status
Sole Trader & Limited Companies

Start Up Loans provides new businesses the finance they need with the help of a government-backed loan. A great alternative for entrepreneurs and businesses looking for business loans to fund their start up.

About Business Loans

Loans for business funding

Loans for business funding

There are roughly 5 million businesses in the UK, employing 213 million people. Moreover, even with this abundance of commercial based revenue, the country is still expanding to new businesses continually. However, starting a business, or sustaining a successful business often requires start-up or additional sustaining capital from an investor. Consequently, business loans are a popular option for obtaining the finance solution that businesses need.

What are business loans?

Business loans are loans of a certain sum of money which are allotted to qualified applicants seeking funds for his or her business. Funds can range from £1,000 to millions, depending upon the lender chosen. Business loans can cover short-term financial needs to more considerable long-term investments to help organisations in different ways. Some lenders will specialise with small business loan, start-up loans and growth and expansion loans.

Business loans much like personal loans will require repayment over a determined period with interest. The interest incurred from the loan depends upon the type of business loan applied for as well as factors including; credit rating, the amount borrowed and length of repayment terms.

What is the difference between secured and unsecured business loans?

There are two main types of business loans which are offered by financial institutions. These are secured and the unsecured business loan.

Unsecured loans are loans which allow a business to borrow capital without the risk of using your business assets as security for the loan.

Secured loans are oriented to minimising the risk for the financial lender/bank. These loans require that the applicant use assets as security for the loan. If the loan is not successfully paid back, the lender can seize the assets to get their money back.

What are the various types of business loans?

Many business loans exist, each catered to a specific target market. As such, it is essential to understand the various types of loans which are available and the primary purpose of these types of loans. These types of loans include:

Bank Loans

The most common loan for businesses which allow for a lump sum to be borrowed and paid over time. Usually, bank loans have the smallest accumulated interest but are often the most difficult to obtain.

Peer to peer

A social means of lending offered online. Capital gained from peer-to-peer loans have a higher interest rate and may require additional securities on the loan. Depending upon the peer to peer service used, the loan may or may not be regulated.

Short term

Smaller business loans which are paid back in a shorter time. Short term loans charge monthly rather than yearly interest. Generally, short-term loans have higher interest rates. Ensure that you can pay back the loan in the allotted time as short-term loans are notorious for high fees for extending beyond the contracted duration of the loan.

Asset-backed

Most loans require that securities be put in place to minimise the risk of loss for the lender. Asset-backed loans are those loans which use the value of assets within the business and weigh the benefit against the totality of the loan. Should the loan not be paid back in full, the lender can take the assets to recover any financial losses which would otherwise have been incurred.

What are the average cost, length, and term of a loan?

What are the rates and costs

What are the rates and costs

For most loans, the duration is between 12 months and 25 years. Some institutions do not allow for large loans with durations shorter than five years (for the bank to make a profit from the interest). There is no fixed duration for loans, and each lender will vary their repayment terms. It is worth bearing in mind that some lenders will also charge an early repayment fee, which needs to be considered.

Cost for loans varies upon the institution or investor lending the funds. However, the average APR for UK business loans in 2018 is around 4.66%. Of course, this is solely dependent upon the businesses’ credit line, the assets which are used as security, the history of the business to the lender, and other such factors. Some lenders, such as some online peer to peer or short-term business loan lenders have rates which reach over 100%. Check the details about APR and monthly interest before applying for your loan.

Fixed vs adjustable interest rates?

One of the main factors for business loans is the interest rate of the loans. Ensure that you understand the interest procedures. In most instances, the lender will offer the loans at a fixed rate. This means that the APR or the monthly interest rates will not increase over the duration of the loan. However, some lenders have an adjustable interest rate (or balloon rate) which can increase at specific points during the life of the loan.

Why would you need a business loan?

Business loans can be used for a variety of reasons although usually, the lender will ask you what you plan to use the money for, so it is best to prepare with your answer. Business loans are typically used for the acquisition of machinery, property, stock, land, staffing, paying off existing debts, expanding operations, opening a secondary base of operations, or moving the business’s premises.

 

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