Business Loans

The most important option of funding for any sized business including start-ups are business loans.

Young lady on her laptop researching a Business Loan

Business loans are a great way to fund a project for a start-up business, or for a business of any size to expand into a specific niche, product or area that they cannot currently fund. Here at Business Loans Options, we will be presenting business owners with many options for funding to allow you to take your business to the next level.

Business Loans Options will provide you with business loans from £5,000 – £5,000,000 dependent on many variables, including cash to credit based businesses, credit scores and secured vs unsecured business loans. The amount you can borrow should always be responsible. Only take a business loan if you are sure that the amount will be invested correctly, and you can pay the monthly payments with interest back. While it can be the saving grace of any company, it can also lead to complications when combined with poor financial sense, failed planning or poor execution.

The calculator we provide throughout our site, is key when considering and moving further with a business loan. While you need to make sure that the payment plan and interest payments work well for you, you should also consider the overall interest you will owe, the payment dates and the overall monthly payments if they are possible to you. One thing we always keep in mind for business owners is to be sure that they can pay their monthly payments with interest without additional payments from the business loan itself. Simply put, if you can afford the payments on the current income now, then it would be more plausible as an option.

Business Loans Guide

What we do as a business loans comparison guide is create what is essentially a “business loans guide”. While we make sure that we can provide our customers with a comprehensive and unique business loans comparison, we also want to make sure our customers are informed about their options and getting the correct business loans for them. The right business loan could mean that your business receives a boost that can change its profitability and scale. We will endeavour to make it as in-depth as possible and try to explain the process and how it works throughout our website.

Can I get a small business loan?

Small business loans are not uncommon for businesses around the United Kingdom in this millennium. As a business owner, you will be eligible for a loan despite the size and scale of your company. However, if you are a small business, you will be limited on the size of the business loans you are eligible for depending on finances.

Do I need a business account for a business loan?

This is dependent on the lender you decide to go with and the business loan that you choose. Some banks require their customers to have a business account to pay directly into and out of, while other companies are happy to work with customers personal accounts before offering business loans.

Do I need to be the owner of a company to get a business loan?

While it would help for the owner of the business to be the one to apply for a business loan, you can still apply and be eligible as a company director. This should help ease the process to ensure the business will still be eligible for a business loan.

Can I get a business loan with bad credit?

Yes, you still have the option to apply and be eligible for a business loan even with bad credit. However, there will be restrictions on the amount, length and payments of the loan depending on credit score.

Does my business have a credit record?

Yes, every business has a credit score. Like getting a business loan with a bad credit score, your business credit score will affect your eligibility for a business loan, and the restrictions that will be placed upon the business loans.

Can I get an Secured business loan?

Yes. You can secure any business loan you take against your business assets. These include machinery, property, stock and other assets that will be placed at risk if you fail to keep up with your business loan repayments.

Can I get an unsecured business loan?

Yes. Any business can get an unsecured loan, but there’s a lot of information to consider before deciding to accept an approved unsecured business loan.

Business loans interest rates

It’s key to understand the interest rate for your loan before accepting. While some companies provide an interest rate that is flat across their company, you could see a spike in your business loans interest rate versus the average. The simple reason for this is because the lender you will be lending from believes there to be a risk associated with your project or business loans.

This is not a negative towards your business, but rather a realistic outlook on your current profitability and your affordability to pay the business loans back. If you have a poor credit history, lenders may feel that you have a lower affordability than the average company, and to try to recoup their losses will have to charge a higher interest fee. This fee will be increased the longer you have to pay your loan back, so if you are confident in your profitability it may be worth lowering your overall term amount.

The good news is many lenders provide the option for you to pay your loan back early, minimizing the interest rate of your loan. The faster you can pay your loan back in full, the more you save on the interest rates. Make sure to check the terms and conditions of any loan before accepting, to ensure that early repayment is an option and penalty fees, termination costs or other hidden fees will not be an issue for you.

How to make sure you get the right amount of funding for your business loan

It’s important to make sure that you know the amount that you want to borrow before you decide to accept an approved loan, or even begin the process. The right planning must go into any business before a loan is applied for an accepted. You need to make sure that the loan will provide a steady and consistent boost in income that will either match or go above the monthly repayment rates, or you will be adding considerable debt into your business that will be more of a hinderance than a help.

Fortunately, there are many ways to make sure that you do not over spend your loan budget, or over borrow and get your company into considerable or large debt. The first is to make sure that you have a clear strategy path to achieve your goals, but you know exactly how much it will cost. Proper planning of a budget and how much it will cost is the most important, as you will never need to overborrow or over extend. However, it is always smart to apply for 15% of the overall cost of the project.

Applying for 15% over the cost of the strategy and project you want completed means that if there are any technical issues or problems that are not caused by you that cannot be fixed, you have a surplus budget to ensure you can correct said problem. This could be something as small as ordering the wrong machinery for a product. If you cannot take the machinery back, you can at least fund for the correct machinery while you dispute said return or sell it elsewhere. The additional funds will always be useful as a safety net.

What term length you would like to pay the loan back

Making sure that you pay the loan back over a scheduled term that would be beneficial to you involves two factors. Firstly, you want to pay the loan back over an amount of time that would not put you under considerable pressure in terms of the amount you have to pay back a month, and you would not want to pay the loan back in a length of time that would make you feel personal pressure.  If you do not have a loan that is secured against your business, or a loan that counts as a personal loan, then it will provide a pressure on you month on month paying back the loan.

Business Loan Lenders

One of the key things to note before considering a business loan is the lender who is offering the loan. With the rising amount of businesses and lower number of lenders handing out said business loans, it can get a bit confusing when looking at the business loans on offer. There are different criteria to establish if you are eligible or not, and the application processes can vary wildly between those. The interest rates are also a defining factor of any loan, and the overall repayment per month. These are just some of the different factors you should consider through each lender.

We are one of the best business loan comparison sites, and we help businesses of any size find the loan that is right for them, and most importantly right for their expenses. We make sure that we do not only show you loan options from the largest banks, but also from small lenders who you may not have heard of before. Usually, these lenders are more flexible with both the repayment dates, but also the total interest paid because they need customers. We will give you all options and allow you to choose between them for which is right for you.

Are you eligible for the business loans? Do you fit the criteria?

It’s important to know if you fit the criteria for a business loan because that will be your biggest stumbling block on an application process. If you are not accepted for a business loan, there could be a few reasons why. On the other side, knowing what makes you eligible for a business loan will increase your chances to be accepted. That’s why in an initial consultation, you will be asked about a few different criteria:

Trading history

Payment history

Filed accounts

Bank statements

Turnover profit

Loan amount

These criteria may seem obvious at first, but they are very important to not and have prepared before any application. While not all of them may appear in your application process, most of them will so it will be wise to ensure they are accurate. Loan companies will not just try to sell you on a loan, they will also want to make sure you can pay the said loan back. So, they will not attempt to overcharge you.

For the most part, the loan amount (unless it is a start-up loan) will never be over 25% of your total annual turnover. They will also not loan you any amount unless your business is currently profitable. Part of a loan application also means they must ensure that your business does not have a history of late payments or any CCJ’s, and that it must be based in the United Kingdom. Businesses must generally be profitable before a company will offer a loan also. Many of these criteria ensure that as a company, you will not go into debt, but as a loan company they will be paid back.

When a lender considers how much they will lend you (not just if they would lend you any amount), they must keep all these factors into account. Most companies will want to ensure they are paid back, so they need you as someone who is lending to show that you can demonstrate affordability as a company. It will be difficult to get a loan if you are currently making a loan and have a short trading history, but that does not make it impossible. There are still options, even if you have bad credit.

Lenders are becoming more flexible when it comes to business affordability. They need to be flexible because they need additional customers, but they also need to allow companies that are not currently profitable but have a chance to be in the future a chance to be granted for a loan also. If you want to find out more about obtaining a loan with bad credit, low affordability or even bad credit, there are still options for you to consider.

Business Loans Options

You may be eligible for a business loan from £5,000 to £5,000,000 today. Before you get a business loan however, there is much information to consider before making the final step. We know that it can be confusing when considering all the options and multiple loan types.

Business loans can refer to many different products such as:

Secured Loans

Unsecured Loans

Peer to peer Loans

Bank Loans

Short Term Loans

Invoice Finance

Cash advance Loans

Government Start-up Loans


Credit Loans

The key would be to ensure that you apply for and secure the correct loan from you. Smaller financing companies can even provide business loans specific to cash businesses. Companies and businesses operate differently, so ensuring you receive the correct loan for you especially in terms of the loan structure must be considered before accepting a loan also. When you are a cash-based business, having your eligibility for a business loan focused around your cash earnings will be perfect to ensure not falling into debt or owed credit.

There are a few different loans you could apply for. Depending on your business or your business situation, it could be useful to consult with these various loan options to figure out which may be right for you.

Do I need a business loan?

Applying for a business loan comes down to two main factors: is there a specific product or service that you wish to invest in that you know will become profitable, and can I afford to pay the business loan back with profits made from said project? There are a few other deciding factors such as needing a product or service to launch at a specific time, an innovation product that you feel you could release to become a cash cow, or you need to make a large bulk purchase that you know will become very profitable in the future. Ultimately, if you are confident in not only your own business but your product or service that you wish to invest in using the business loans, then a business loan will be right for you.

If you feel that a business loan of a specific amount is the only realistic path to achieve your goals, then it is important to maintain realistic goals and always bearing in mind the possibility that the business loan will not provide the benefit you are looking for. It is always wise to ensure that you plan correctly and always leave space for delays, issues or any other potential hinderance that could stop your business from maximising potential profits from an investment. As a business loans comparison website, we cannot urge business owners enough to ensure that once a business loan is taken out, it is correctly utilized.

Personal loan or business loan?

A key question many potential customers ask is whether it is better to take out a personal loan, or a business loan. There are pros and cons to both, but the key aspect to a business loan is that it can still be placed within the balance sheet at the end of the year. It is also good to keep it within business accounts so that when you make a purchase or investment that may not be strictly related to a product such as training programmes or seminars, you can put business loans down as a business expense rather than a personal expense.

Personal loans can be a better option if your business account has a bad credit rating, however. It will allow you to lend a higher amount, with lower interest rates and with some lenders will allow you additional length to pay back the loan. Factors like this may make a personal loan more suitable for you, especially if you are a start-up company with little funding. It could ease your way through the initial stages of your business development.

Small lenders or large lenders for business loans?

When it comes to a business loan, the key aspect should not be that you recognise the name of the lender. If a company is registered and legally allowed to lend money to a business, then the most important aspects should be whether the business loans details match your business needs. That is why we at Business Loans Options direct customers to both big and small lenders, allowing you to find and focus on applying for only the best business loans for you.

There are a few different lenders, who provide different benefits however:

Challenger banks 

Challenger banks are beneficial to some companies because they are more flexible with business loan options than high-street banks are willing to be. They are willing to stretch further on their business loans repayment dates and offer lower interest rates. They are also known for being open to many business ideas rather than catering to b2b, product or service sales in only recognized markets. This is part of why challenger banks also have faster application processes for business loans too.

High-street banks 

High-street banks are the well-known banking companies that you have heard of such as Natwest, Bank of Scotland, Barclays, etc for business loans. While they are more established than other companies that you might come across during a comparison, they are no longer lending like they used to. Businesses have a lower acceptance rate for a business loan than they did 10 years ago. They are also more stringent on the businesses that they approve for business loans. However, they offer competitive rates for business loans between £5,000 – £25,000 so they would still be worth considering.

Smaller loan companies 

If you are looking for an alternative funding source, smaller specialists could be an option for you. Judging and approving business loans on a variety of ways financially, they may match your needs better than others will. There are some companies that will offer business loans strictly for businesses that handle cash and take a percentage out monthly until you have paid off your loan. With smaller lenders, you could also typically find a lender that operates and lends to your specific industry or niche for business loans. They also have a different criterion for approving businesses, instead meeting face to face and discussing whether your business or project is viable before making any decision.

Independent loan companies 

The largest benefit of independent loan companies is the amount they are willing to finance a company with their business loans. These can range from £5,000 – £5,000,000 dependent on a variety of factors. They are just as large and established as high-street banks too but lack the restrictions and criteria you would expect. Like smaller business loans companies, they are willing to invest in companies from an emerging sector or niche if you could provide viability. Some applications can also be approved within days rather than weeks, speeding the process.

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