Business loans for UK SMEs: compare & apply in minutes
Explore tailored business loans for UK companies. Compare lenders, check eligibility, and apply quickly with Funding Options by Tide - supporting 17,000+ SMEs and more than £1bn funded.
Last updated: October 2025, edited by Joe Morley, reviewed by Vivek Seda
Trusted by over 17,000 customers
Business loans: what they are and how they work
What is a business loan?
A business loan is a form of finance that provides a lump sum to your company, which you repay over time with interest. It can be secured (using an asset as collateral) or unsecured (based on your creditworthiness and trading history).
Business loans are commonly used by SMEs to fund growth, hire staff, buy stock, cover operating costs, or support new projects.
Key features
Loan amount: typically from £1,000 to £20 million
Repayment terms: usually 3 months to 5 years
Interest rates: fixed or variable, depending on lender and product
Repayment type: monthly instalments or flexible repayment schedules
Security: may be secured or unsecured
What can I use a business loan for?
Operational activities
Business loans are suitable for a range of purposes, including purchasing new equipment, leasing or buying a vehicle, and managing cash flow.
Property purchases
Business loans can be used to acquire new business premises or buy-to-let rentals properties, renovate existing buildings, and pay for property improvements.
Growth activation
From paying for a brand campaign to funding an outreach team, business loans can be used for financing marketing or account management activities.
How much can I borrow?
Unsecured loans
£1,000 – £500,000
Secured loans
Up to £20 million
Startup loans
Up to £25,000 (government-backed)
Repayment terms
3 months to 5 years
Estimate your costs today
If you're ready to take your business to the next level, use our business loans calculator to get an idea of what you can afford.
Want to understand the cost of your loan?
Use our business loan calculator below to find out how much you can borrow to take your business to the next level.
Calculations are indicative only and intended as a guide only. The figures calculated are not a statement of the actual repayments that will be charged on any actual loan and do not constitute a loan offer.
Monthly payments
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Monthly interest
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Total interest
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Length of loan
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Financial product information
Representative example*
• 9.7% APR Representative based on a loan of £50,000 repayable over 24 months.
• Monthly repayment of £2,291.56. The total amount payable is £54,997.44
*Some lenders may apply fees during the application process, please note that these are set and provided by these entities.
Annual Percentage Rates
Rates from 8.2% APR
Repayment period
1 month to 30 years terms
What types of business funding can I get?
Secured business loans
Also known as asset-backed lending, secured business loans require assets (e.g., property, vehicles, or equipment) as collateral. This reduces risk to the lender, often resulting in more affordable terms and cheap business loans.
Unsecured business loans
Ideal for new business loans or startups without significant assets, unsecured business loans typically charge higher interest rates. Lenders often ask for a personal guarantee. They can be arranged quickly, which makes them suitable if you need a fast business loan or quick business loans for urgent bills.
Working capital finance
Working capital finance is usually used to support a specific project or growth strategy. The amount you are eligible for is often calculated by subtracting your current liabilities from your current assets.
Asset finance
Let’s say your business needs an asset, such as new IT equipment or a vehicle. Opting for asset finance enables you to purchase the item today and pay for it in instalments. It’s important to remember that asset finance typically requires an upfront deposit and there is less flexibility with early repayments.
Bad credit business loans
If you have a low personal or business credit score, you might want to consider these types of loans. It’s important to be aware while bad credit business loans are generally more accessible, they’re also more expensive.
Start up loans
Start up loans are similar to business loans but they’re targeted directly at start ups, who can sometimes have a harder time getting loans given their limited financial history. The British Business Bank offers government backed start up loans of up to £25,000.
Invoice finance
If you’re currently owed payment on invoices, you can use those invoices as security to receive an invoice loan. This type of loan is great for helping with cash flow. Invoice finance is only as good as the strength of your debtors, customers often have to change the account they pay into, and this type of financing can be admin heavy. Leverage outstanding invoices as security to receive an online business loan. Great for boosting cash flow when payments are still pending.
Bridging loans
Bridging loans help bridge funding gaps between purchases and further funding. For example, bridging loans are often used to purchase property while the borrower awaits the sale of their previous home, office building, or storefront.
Business overdrafts
Business overdrafts are a fast business loans alternative that provides quick access to funds for short-term needs without a long application process.
Business loans vs other finance options
Business loans vs other funding types
Feature | Business loan | Revolving credit | Invoice finance |
Access to funds | One-off lump sum | Flexible drawdown | Against unpaid invoices |
Interest | On full amount | On used balance | On advanced invoice value |
Reusability | No | Yes | Per invoice basis |
Ideal for | Growth, equipment | Cash flow flexibility | B2B firms with long terms |
What affects eligibility and rates?
Credit score: personal and business creditworthiness
Annual turnover: most lenders have a minimum threshold
Trading history: lenders often prefer 12+ months of operation
Profitability: strong margins can help secure better terms
Security: assets or guarantees can reduce risk and interest rates
Alternatives to business loans
Revolving credit facilities
Revolving credit facilities is a flexible access to credit, only pay interest on what you use
Invoice finance
Invoice finance releases funds tied up in unpaid invoice
Asset finance
Asset finance spreads the cost of essential equipment or vehicles
Overdrafts
Overdrafts manages short-term cash flow gaps through your bank
Equity investment
Equity investment raises funds from investors in exchange for shares
How does Funding Options work?
Tell us how much you need
We’ll ask a few questions about your business and the reason for your loan.
Get quotes instantly
Our smart technology will compare quotes from up to 80+ lenders to help you find the ideal business loan.
Apply for a Business Loan 🎉
We'll be there to guide you through every step of the process.
Why choose Funding Options by Tide?
Funding Options by Tide helps UK SMEs find fast, tailored business finance by connecting them with over 80 trusted lenders. Backed by Tide and FCA-regulated, the service is free and easy to use.
Compare 80+ UK lenders in minutes
We scan the market so you don’t have to, finding the right option for your business.
Trusted by 17,000+ UK businesses
From startups to established SMEs, we’ve already helped secure over £1bn in funding.
FCA-regulated and Tide-backed
We operate as a credit broker, not a lender, giving impartial access to multiple finance products.
Excellent customer experience
Our Trustpilot rating is 4.8 out of 5, based on 1,300+ independent reviews.
Personalised support
Our team can guide you through the process and help you choose the finance that fits your needs.
How to apply with Funding Options by Tide
No fees for comparing and no obligation to proceed.
Tell us about your business and the funding you need.
Compare tailored offers from 80+ UK lenders.
Provide documents for underwriting.
Finalise your facility and receive funds quickly.
Want to know more about business loans?
What’s the difference between secured and unsecured loans?
Secured loans use assets as collateral, often with lower rates. Unsecured loans don’t require assets but may need a personal guarantee.
How much can I borrow?
Loan amounts vary depending on turnover, credit history and security. Larger amounts are usually available with secured loans.
Can startups apply?
Yes. Some lenders specialise in business loans for new businesses.
Can I get a loan with bad credit?
Yes, but options may be more limited. Learn more about bad credit business loans.
What can I use a business loan for?
Common uses include stock, payroll, marketing, premises, or expansion costs.
Will bad credit affect my application?
Your credit rating greatly impacts your eligibility for a business loan.
Lenders use your credit rating as an indicator of how likely you are to repay your business loan. If your credit is bad, this can mark you as a high-risk borrower, leading to stricter lending terms. In some cases, traditional lenders may even be unwilling to work with you.
To improve your chances of getting a business loans with good terms, follow these steps:
Check your credit: Lenders will always check your credit history when you apply for a business loan. Get a head start by obtaining a copy of your credit report and ensuring it accurately reflects your recent transactions and lending history.
Organise your finances: Before applying for a loan, aim to settle existing debts and establish a strong cash flow. A demonstrable cash flow indicates a growing business, making lenders more likely to work with you when they review your accounts.
Check your business accounts: You need recent financial accounts to provide to lenders during the application process. Most lenders want up-to-date accounts, meaning you should have accounts filed less than two years ago, including a detailed profit and loss report and a balance sheet.
Create a plan: Lenders want to know how you intend to spend their funds. When applying for a business loan, make sure you have a clear business plan and an explanation for why you need these funds.
Do business loans affect my credit score?
Yes, they can impact your business and personal credit score both positively and negatively. Consistent repayments and low utilisation can result in a positive impact whereas missed payments or a default can have a severe impact on your business’s credit score. If the lender carries out a hard search, the application itself can have a negative, albeit temporary effect on your score.
When it comes to personal scores, even if you apply as a limited company, your lender may ask you to make a personal guarantee. Personal guarantees are legally binding agreements that make you personally liable for the loan amount if your business is unable to meet its repayment obligations. If you agree to a personal guarantee, this can show up as a record of a loan on your personal credit.
Who offers business loans?
There are a number of places you can find business loans, including high street banks, challenger banks, alternative lenders, online P2P platforms, and even the government. Deciding which one to go for is a matter of personal taste and your unique circumstances.
What are the application timelines?
A loan can take anywhere between a few hours to a few weeks to set up. The time it takes to get a business loan depends on factors such as the type of loan and the lender. For instance, secured loans tend to take longer to set up than unsecured loans.
How do I get a business loan if I live in the UK?
Depending on the institution, UK lenders may offer business financing options to UK-based businesses. In terms of how to get a business loan in the UK, the steps are the same as those listed above – find a lender, decide what type of loan you want, and submit an application.
You must be 18 years or older and meet the lender’s credit requirements to be eligible for a business loan.
We provide UK SMEs with access to fair business loans, matching our lending quotes to your specific financial needs and business scenario. Through Funding Options by Tide, you can match with 120+ lenders for loans from £1,000 to £20M.
Plus, our experts are on standby to help you through the entire process!
Am I eligible for a business loan?
Eligibility depends on several factors. You’ll usually need to be a UK resident or business based in the UK, over the age of 18, and the loan must be used for business purposes.
You’ll likely need to prove that you have the funds to meet the agreed repayment schedule. Beyond that, if your business was founded within the last year, it may help you to apply for start up business loans as traditional business loans may need to see a longer financial history.
We can’t speak for exactly how much you could be eligible for as every business is unique, but we help facilitate loans ranging from £1,000 to £20M.
What is the average interest rate for a business loan?
Business loan interest rates can vary from approximately 5% up to 25%. The interest rate offered depends on the lender, their services and risk appetite, your circumstances as a business, and the specific terms of the loan. For instance, an established mid-sized business applying for a secured loan may receive a lower interest rate when compared to a start up business applying for a short-term unsecured loan.
Please note that the information above is not intended to be financial advice. You should seek independent financial advice before making any decisions about your financial future.
It’s important to remember that all loans and credit agreements come with risks. These risks include non-payment and late-payment of the agreed repayment plan, which could affect your business credit score and impact your ability to find future funding. Always read the terms and conditions of every loan or credit agreement before you proceed. Contact us for support if you ever face difficulties making your repayments.
Funding Options, now part of Tide, helps UK firms access business finance, working directly with businesses and their trusted advisors. Funding Options are a credit broker and do not provide loans directly. All finance and quotes are subject to status and income. Applicants must be aged 18 and over and terms and conditions apply. Guarantees and Indemnities may be required. Funding Options can introduce applicants to a number of providers based on the applicants' circumstances and creditworthiness. Funding Options will receive a commission or finder’s fee for effecting such finance introductions.
Joe Morley
Business Finance Lead
Joe has been helping UK businesses secure the funding they need since 2015. Over the years, he’s supported hundreds of SMEs in accessing millions of pounds for everything from purchasing essential assets to unlocking working capital for day-to-day operations. As Head of Sales at Funding Options, Joe leads a large team of expert Business Finance Specialists dedicated to finding the right solution for every customer. His goal is simple - to make securing finance straightforward, stress free, and tailored to each business’s needs.