from start-ups to large corporations
The UK banking sector offers a wide range of loan facilities for businesses, from start-ups to large corporations, provided by major high-street banks, specialist challenger banks, and government-backed schemes.
Business loans in the UK are categorised by collateral requirements and purpose.
| Type of Loan | Description | Typical Use | Key Feature |
|---|---|---|---|
| Unsecured Business Loan | A fixed sum borrowed without collateral. | Working capital, purchasing stock, small equipment | Higher interest, lower amount, personal guarantee often required |
| Secured Business Loan | Borrowed with asset pledged as collateral. | Major expansion, large equipment purchases, commercial property | Lower interest, longer repayment term (up to 20 years) |
| Business Overdraft | Flexible borrowing attached to current account. | Managing day-to-day cash flow | Flexible but generally more expensive than term loan |
| Revolving Credit Facility (RCF) | Funds can be drawn, repaid, and re-borrowed up to a specific limit. | Ongoing investment, working capital, inventory financing | Blends overdraft flexibility with loan structure |
| Facility Type | Description | Best For |
|---|---|---|
| Asset Finance (Hire Purchase/Leasing) | Financing for equipment, machinery, or vehicles. Lender owns asset, business repays over time. | Purchasing fixed assets like production machinery or company vehicles |
| Invoice Finance (Factoring/Discounting) | Immediate cash access from outstanding invoices. Lender advances 80–90% value. | Businesses operating on credit terms needing quick cash flow |
| Commercial Mortgage | Long-term loan to purchase or refinance commercial property. Secured against property. | Buying offices, warehouses, retail units, or land |
Supports SMEs investing and growing. Borrow £25,001–£2 million with repayment 1–6 years. Government provides guarantee to lender.
Government-backed unsecured personal loans for businesses trading less than 36 months. Loans £500–£25,000 with fixed interest (currently 10% p.a.) and free mentoring.