Dave Beard

Expertly compared by Dave Beard

Products Updated May 27, 2018

Small Business Loans

If you own one of the hundreds of thousands of small business owners here in the UK and need a loan or funding then our finance experts and lenders can help. Low rate finance options available for sole traders, companies and the self employed.

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:

2 providers expertly compared:

Choice Loans

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

Rated 5.0/ 5

All credit types

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.

2 providers expertly compared:

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

Rated 5.0/ 5

All credit types

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.

Read our customer and visitor reviews for this product:

Rating: 5 / 5 with 1 votes

Good service and got back to me quickly

by Stephen B

Good service and got back to me quickly on a couple of points.

Small Business Loans

The right type of loans for your small business

The right type of loans for your small business

Businesses come in all shapes and sizes, and the size of an organisation will determine the level of financing available. With the growing number of start-ups and small to medium-sized enterprises in the UK, small business loans are becoming increasingly popular. There are a number of small business loan options that can provide quick cash to businesses that do not have the available collateral or financial backing of larger firms.

Knowing how long you will need to repay is essential to determine before you decide on which loan is best for your business needs.

What are small business loans?

Small business loans are designed to give businesses that have been in business for less than two years a leg up while they establish their clientele and make a name for themselves in their respective industry. A small business loan can help expand the company and grow the business all while creating credit for future financial needs.

There are many different types of small business loans;

Short-term loans – to pay for significant expenses, unexpected costs and to ease cash flow difficulties.

Medium and long-term loans – will usually last for over five years and will help companies who need to repay the money more slowly. This can help small business to grow, such as setting up an office.

Unsecured loans – For small businesses that do not yet have assets to use as security for a secured loan, an unsecured business loan may be a more realistic option. However, the interest rate will usually be higher, and you may have to use a personal guarantee for security.

What can they be used for?

  • Stock purchases
  • Equipment purchases
  • Operations expansion
  • Debt payoff
  • Improve cash flow
  • Research and development
  • Hiring new staff
  • Buying out a partner
  • Moving expenses.

What to know

Depending on the type of business loan and the financial institution used, business owners can get unsecured financing for up to £25,000 with payback options from one to five years. APR ranges for small business loans can be found from between 4.9% and 24.9%. As added support, many lenders will offer small business loans that come with zero fees and good credit score may be required.

Requirements typically include,

  • Proof of identity
  • Proof of address
  • Bank statements
  • Profit and loss statements
  • Business trading history
  • Personal credit history
  • Proof of residence
  • Two years tax returns.

Positives of small business loans

Small business loans have proven to assist business owners in getting out of financial crunches and providing necessary funds to pay additional workers during increased business times. With many outlets offering support for small businesses, many lenders provide flexible options so that you have a loan with repayment terms that best suit your business.

Often there are no, or small, set up fees to start with, and many lenders will provide fixed interest rates and repayments to help businesses get to grips with their finances. The fact that there are many different lenders available means the market can be competitive which can help you to find a better deal.

An additional benefit is that many small business loans are usually quick to process. As long as you have all of the necessary information prepared, a loan can be transferred into your account in just a few days.

Negatives of small business loans

As with all loan types, there are some negatives to consider when getting a small business loan. Some loan options will charge high fees, which can be unsustainable for many businesses who don’t have structured income in place as yet.

The other major negative is that banks have come to know that most businesses fail. Most small businesses do not last longer than five years. Small business loans also require that specific size requirements be met, in terms of the number of employees as well as revenue. Some lenders will ask directors to take personal responsibility for the loan. If times get hard for the business, then it may affect people and their families as well as the business itself.

Conclusion

Small businesses can greatly benefit from small business loans as they allow for immediate financing and many institutions offer finances within 24 hours. For business owners who maintain a high level of credit, a small business loan is usually straightforward to apply for. For a company that has been established for less than two years, a loan can be an ideal option for necessary financing for expanding the business or getting out of tight financial situations.

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