The best business loans in the UK come from both high-street banks and specialist lenders – with rates from 6% to 60%+ APR depending on your business profile, loan size, and repayment term. This guide compares the top-rated UK business loan providers for 2026, covering eligibility, rates, fees, and what each lender is best suited for.
- Business loan rates range from 6% to 60%+ APR - depending on your business credit score, trading history & loan amount
- High-street banks offer the cheapest rates at 6-12% APR - but require 2+ years trading history & strong financials
- Specialist lenders approve 73% more applications than banks - but charge higher rates of 15-60% APR for flexibility
- Unsecured loans cap at £500,000 maximum - while secured business loans can reach £5 million+ with property collateral
- Revenue-based financing costs 20-40% annually - but repayments flex with your monthly sales, unlike fixed bank loans
Best UK Business Loan Providers 2026
Funding Circle offers the broadest range of SME loans (£10K–£500K, 6–60 months) with rates from 6.9% APR. For fast access without a business account requirement, iwoca and Capify approve within 24 hours. High-street banks (Barclays, HSBC, NatWest) offer the lowest rates but require stronger financials and take 1–4 weeks. Revenue-based finance (Liberis) suits businesses with strong card turnover but irregular cash flow.
| Provider | Loan Range | Typical APR | Decision Time | Best For |
|---|---|---|---|---|
| Funding Circle | £10K–£500K | From 6.9% APR | 1–3 days | Established SMEs, longer terms |
| Liberis | £2.5K–£300K | Factor rates (not APR) | 24 hours | Card-based businesses, flexible repayment |
| Capify | £5K–£500K | 47.9–67.89% APR (examples) | 24 hours | Bad credit, fast access |
| Think Business Loans | £5K–£1M+ | Varies (broker) | 24–48 hours | Complex cases, broker access to 200+ lenders |
| Barclays | £1K–£100K+ (standard) | ~7–15% APR | 1–4 weeks | Barclays customers, lower rates |
| HSBC | Up to £10M | ~7–15% APR | 1–4 weeks | HSBC customers, large facilities |
| NatWest | £1K–£50K (standard) | ~8–16% APR | 1–4 weeks | NatWest customers, SME-focused |
How to Choose the Right Business Loan
Choose a bank if you have 2+ years of accounts, a clean credit history, and can wait 2–4 weeks. Choose a specialist lender (Funding Circle, Capify, iwoca) if you need speed, have had credit issues, or your bank has declined you. Use a broker (Think Business Loans) if your case is complex – they access 200+ lenders and structure deals banks won’t touch.
The right lender depends on five factors: how quickly you need funds, your credit profile, whether you have security to offer, how long you’ve been trading, and your annual revenue. Fast lenders (Capify, iwoca, Liberis) approve within 24 hours but charge significantly higher rates. Banks charge less but require stronger financials and take weeks to decide.
For most established SMEs (2+ years trading, £100K+ turnover, clean credit), Funding Circle offers the best combination of competitive rates and fast decision-making outside of the high street. For businesses with irregular cash flow or card-based revenue, Liberis’s revenue-based model – where repayments flex with your sales – can be more suitable than fixed monthly instalments.
Business Loan Eligibility: What Lenders Look For
Most UK business loan providers require at minimum: 6–12 months trading history, £50K+ annual turnover, and a UK-registered business. High-street banks typically require 2+ years of filed accounts and a personal credit score above 650. Alternative lenders accept newer businesses and impaired credit but charge significantly higher rates to compensate for elevated risk.
| Requirement | High-Street Banks | Alternative Lenders | Revenue-Based (Liberis) |
|---|---|---|---|
| Min. trading history | 2 years | 6–12 months | 6 months |
| Min. annual revenue | £100K+ | £50K+ | £5K+/month card turnover |
| Credit history | Strong required | Impaired accepted | Minimal credit check |
| Personal guarantee | Often required | Often required | Not always |
| Business plan required | Usually | Rarely | No |
Types of Business Loan Available in the UK
The main types of UK business loan are: unsecured term loans (no collateral required, faster but higher rates), secured term loans (use assets as collateral, lower rates), revenue-based finance (repayments tied to sales – no fixed term), and merchant cash advances (advance against card turnover, repaid as a percentage of daily card sales). Invoice finance and asset finance are related products that serve specific cash flow or asset-acquisition needs.
Unsecured business loans are the most common type for SMEs seeking under £250K. No collateral is required, but lenders mitigate risk through personal guarantees and higher interest rates. Most online lenders operate in this space. Typical terms: 3–60 months, £5K–£250K, APR 8–50%.
Secured business loans use commercial property, equipment, or other assets as collateral. This allows larger loan amounts (up to several million pounds), longer terms (up to 20 years), and significantly lower interest rates. The trade-off: if you default, the lender can seize the asset. Suitable for capital investment in assets you own outright or part-own.
Revenue-based finance (Liberis, YouLend) is not technically a loan – it’s a cash advance repaid through a fixed percentage of your daily card or online sales. There is no fixed term, no monthly repayment schedule, and repayments slow automatically when sales dip. The effective cost is expressed as a factor rate (e.g. 1.25× means you repay £1.25 for every £1 advanced) rather than APR.
Business Loan Rates in the UK (2026)
UK business loan rates range from approximately 6% APR (secured bank loans for strong businesses) to 60%+ APR (fast-access alternative lenders for higher-risk borrowers). With the Bank of England base rate at 4.75% (March 2026), most high-street bank business loan rates cluster between 7–15% APR. Alternative lenders typically charge 20–50% APR; revenue-based finance products use factor rates rather than APR, typically 1.15–1.45×.
Business loan rates are not publicly advertised in the same way as personal loan rates – most lenders quote based on your business risk profile after an application. The rate you receive depends on: trading history, turnover, credit profile, loan amount, term length, whether you offer security, and sector. The only way to know your actual rate is to apply or use a broker who can give indicative terms without a hard credit check.
Representative APR figures shown on lender websites apply to the majority of approved applicants – in practice, higher-risk businesses will pay above the representative rate. Always compare the total cost of borrowing (principal + all fees + total interest), not just the headline rate.
How to Apply for a Business Loan UK
To apply for a UK business loan you will typically need: 6–12 months of business bank statements, last 2 years of filed accounts (or management accounts for younger businesses), proof of identity and address, and details of the loan purpose. Online lenders process applications in 24–72 hours with Open Banking data access. Banks take 1–4 weeks and require more documentation. Using a broker (Think Business Loans, Swoop) gives access to multiple lenders via a single application.
- Know your numbers – loan amount needed, what it’s for, how you’ll repay it. Lenders ask for a repayment plan even for short applications.
- Check your credit profile – both personal (director) and business. A CCJ, default, or missed payment in the last 12 months will limit your options to specialist bad-credit lenders at higher rates.
- Gather your documents – 6 months of bank statements minimum (12 preferred), Companies House details if limited company, most recent filed accounts or management accounts.
- Compare lenders or use a broker – comparing directly gives you full control; a broker (Think Business Loans, Swoop, Funding Xchange) submits to multiple lenders at once and finds the best deal without multiple hard credit searches.
- Review the offer carefully – check APR, total repayable, arrangement fees, early repayment charges, and whether a personal guarantee is required before signing.
Related Business Finance Guides
Explore the full range of business finance options to find the right structure for your business’s needs and stage.
- Business Loan Costs & Rates UK 2026 – understand APR, fees, and total cost of borrowing
- Secured Business Loans UK – use assets to unlock lower rates
- Unsecured Business Loans UK – no collateral required options
- Business Loans for Bad Credit – lenders that accept impaired credit history
- Short-Term Business Loans – 3–18 month working capital solutions
- Best Invoice Factoring Companies – unlock cash from unpaid invoices
- Self-Employed Business Loans UK – borrowing options for sole traders and contractors
- Business Consolidation Loans UK – combine multiple debts into one repayment
- Merchant Cash Advance UK – revenue-based financing for card-processing businesses
