Business loans
A fixed sum lent to the business and repaid over an agreed term from trading income, either unsecured against the covenant or secured on property or assets.
The question that shapes everything here is not how much you want, but what you are comfortable securing it on. Unsecured is quicker and costs a little more; secured is cheaper and takes a little longer. Which one suits you depends on your timescale and what you have behind you, and it is worth ten minutes of conversation before you apply anywhere.
The parameters
Where this product sits.
Ranges across the market, so you can sanity-check any quote — ours or anyone else’s — before you take it seriously.
- Unsecured
- £10k–£500k
- Larger is possible on a strong covenant. Almost always with personal guarantees from the directors.
- Secured
- £25k–£10m+
- Against property or a debenture. Lower rate, longer term, slower to complete.
- Term
- 1–5 years
- Secured facilities run to 15 or 20 years where the security supports it.
- Trading history
- 12–24 months
- Under 12 months narrows the panel sharply. Under 6 months usually rules out term debt entirely.
- Arrangement fee
- 1–5%
- Often deducted from the advance rather than paid separately, so you receive less than the headline.
These are indicative market ranges rather than a quotation — they are here so you can sanity-check any offer you are shown. Your own terms will be priced on the asset, the borrowing entity, your trading history and the exit, and we will put real figures in front of you on the first call.
Typical cases
What it is used for.
Working capital
Bridging a seasonal trough, funding a large order, or replacing an overdraft that has been withdrawn. Term debt is a poor substitute for a genuine cash flow facility, so we will ask whether invoice finance fits better first.
Expansion and fit-out
New premises, a second site, a shopfit. Where the spend creates an asset that lasts, matching the term to the asset's life matters more than the rate.
Refinancing existing debt
Consolidating several facilities — a merchant advance, a couple of asset agreements, a director's loan — into one payment on a longer term.
Tax and VAT bills
Spreading a corporation tax or VAT liability rather than paying HMRC penalties. Specific short-term facilities exist for this and are usually cheaper than a general business loan.
In detail
How it works in practice.
What a lender is actually assessing
Three things, in order: whether the business generates enough surplus to service the payment, whether it has done so consistently, and what happens if it stops. The first two come from your filed accounts and your business bank statements — most unsecured lenders now read the statements directly through open banking rather than waiting for accounts.
Affordability is calculated on adjusted profit, not headline profit. Directors' remuneration, dividends, pension contributions, depreciation and genuine one-off costs are added back. A business showing £18,000 of profit after paying its two directors £60,000 each is not an £18,000 business as far as a competent underwriter is concerned.
The third question is where security comes in. An unsecured lender's recovery route is the personal guarantee and the courts, which is priced accordingly. A secured lender has an asset, and charges perhaps a third as much for the privilege.
Personal guarantees, and what they actually mean
On unsecured business lending to a limited company, a personal guarantee from the directors is close to universal. It removes the protection of limited liability for that debt: if the company cannot pay, the lender pursues you personally, and that can reach your home.
What is negotiable is scope. Guarantees can be capped at a percentage of the facility rather than the whole of it, limited to certain directors, or supported by guarantee insurance — a product that covers a proportion of your exposure for an annual premium. Few brokers raise any of this, because it is easier not to.
Take independent legal advice before signing one. Not because it is unusual, but because the difference between an uncapped all-monies guarantee and a capped one is, in a bad year, the difference between a difficult conversation and losing the house.
When a business loan is the wrong answer
If the problem is that customers pay in 60 days and suppliers want 30, a term loan treats the symptom for a year and then leaves you with the same gap plus a repayment. Invoice finance addresses the actual mismatch and costs less.
If the money is for a specific piece of equipment, asset finance secured on that equipment will almost always beat an unsecured loan on rate, and preserves your unsecured capacity for something a lender cannot take security over.
If the business is loss-making and the loan is intended to cover the losses while something changes, be honest with yourself about what that change is and when it lands. Debt does not fix a business that does not work; it sets a deadline.
Before you sign
Four things worth checking.
Factor rates dressed as interest
Some unsecured lenders quote a total cost rather than an APR. A '1.3 factor' on a 12-month facility is not 30% a year — with amortising repayments it is closer to 55%. Ask for the APR.
Daily and weekly repayments
Common on fast unsecured lending, and hard going for a business with lumpy receipts. Monthly repayments are usually worth paying slightly more for.
Early settlement terms
Some facilities charge the full contracted interest regardless of when you repay, which removes any benefit from settling early.
Stacked facilities
Taking a second or third unsecured loan on top of existing ones is visible to every subsequent lender and is treated as a distress signal. Refinance rather than stack.
As a rough working figure, one month of turnover, sometimes reaching two on a strong and consistent trading record. A business turning over £1.2m a year would be looking at £100,000 to £200,000 without security.
That is a starting point, not a rule. Consistency matters more than size — a business with steady monthly receipts will out-borrow a lumpier business on the same annual turnover.
It narrows the panel considerably but does not close it. Some lenders will consider from six months where the receipts are strong and the directors have relevant track record; a start-up loan scheme may be the better route below that.
Expect to be asked for a personal guarantee and to pay materially more. If there is an asset involved, asset finance is often available earlier than unsecured term debt.
A hard search will, and several in a short window will do real damage — it reads as someone shopping in difficulty. This is the single strongest argument for going through one broker rather than applying to four lenders directly.
We work from soft criteria checks until you have seen terms and told us to proceed. Only then does anyone search your file.
On rate, almost always — often by two thirds. On total cost, not necessarily: security means a valuation, both sets of legal fees and several more weeks, which can add thousands and lose you the opportunity you were borrowing for.
For a five-year facility the security is usually worth it. For nine months, frequently not.
For unsecured: identification, six to twelve months of business bank statements, and your last filed accounts. Many lenders take the statements through open banking, which takes minutes.
For secured: add current management accounts, an up-to-date profit forecast, details of the security property and existing charges over it, and a short statement of what the money is for.
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Related facilities
Asset finance
Funding for equipment, vehicles, plant and machinery.
Acquisition finance
Funding the purchase of a business, or a buy-out of shareholders.