Let's find the best business loan for you

What are the best business loans? Find the top providers, quick application info, docs required, and more – so you can find the best deal for you.

By Mat White on 01/10/2019

Small business loans can be used for growth. In this picture a small sapling is reflected in the mirror as a grown up tree.
Photo by Daniel Forero

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Business loans guide

Discover the best business loans for you

What are the best business loans? UK business loan providers include: iwoca, Funding Circle, Ultimate Finance, Spotcap, Capify, Fleximize, MarketInvoice and Satago. If it's types of loan you're after, then your business could benefit from a start-up loan, business credit-card, term loan, business overdraft, cash-flow finance, equity investment or merchant cash advance.

We looked at over 300 UK lenders, picking out the ones offering the best business loans for 2019. Hopefully this resource guide will let you compare between providers quick and simply.

Every care has been taken to provide accurate info on each business loan provider. They are ranked in order of their Trustpilot score. All facts and stats are right (according to the funders' public websites) as of 1 October 2019.

Comparison: which is the best business loan for me?

Business loan providerBusiness loan amountRep. APR
iwoca loans£25,000 - £250,00014.90%
Boost Capital£3,000 - £500,000Unknown
Capify£5,000 - £150,000N/A
Fleximize£5,000 - £250,00042.20%
Spotcap£50,000 - £250,00024.20%
MarketInvoiceDependant on invoice valueN/A
SatagoUp to 85% of invoice valueN/A%
Funding Circle£10,000 - £500,000N/A
Santander£2,000 - £25,0008.90%
Esme Loans£10,000 - £150,0009.50%

If you already know which provider you're interested in learning about, you can jump to their section using the links above. Or keep reading to digest the whole list.

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1. iwoca

Trustpilot score: 4.8/5 (3,982 customer reviews)

Small Business Loan

Description:

In our view, banks and traditional lenders don't get small businesses. That’s why iwoca is designed for business owners like you. No more long forms, long waits and unfair lending criteria. Instead, iwoca combines technology with an understanding of exactly what you need to unlock growth or plug cash flow gaps.

  • Amounts: £25,000 - £250,000
  • Terms (months): 1 - 60
  • Rep. APR: 14.9%
  • Finance calculator: Yes

Application criteria:

iwoca considers a wide range of businesses for its credit facility product. Think from new startups to companies with less than perfect credit ratings.

For the Small Business Loan product you must have a UK-based limited company. This needs to have been trading for at least two years, with a minimum turnover £150,000. It's not a secured business loan.

Fees and interest rates:

Interest rates start from 9.9% with a 6% set-up fee that's built into the loan repayments. There are no early repayment fees. Instead, customers are able to make overpayments at any time to reduce the interest they pay. You might also be interested in iwoca's credit facility if you're looking for shorter term funding or start up loans.

Security required:

Personal guarantee from business directors.

Application to receive funds

iwoca offers an entirely online application process. Open banking, cloud accounting integrations and advanced technologies quicken iwoca’s underwriting decisions. A typical application can be sorted and the funds released in 24 hours.

Director Tom Seaton explains how business finance has helped Crate Brewery

2. Boost Capital (new entry)

Trustpilot score: 4.9/5 - 454 reviews

Small Business loan

Description: Boost Captial says its business loans don’t have same stringent restrictions as normal bank loans, and are designed to give business owners flexibility.

Whether you need finance for inventory, marketing initiatives, new staff, company expansion, or just to manage cash flow, Boost Capital may be able to help.

  • Amounts: £3k - £500k
  • Terms (months): 4 - 18
  • Rep. APR: ??
  • Business Loan Calculator: Yes

Eligibility Criteria: Minimum 3 years trading and over £70,000 annual revenues.

As well as a Small Business loan, Boost Capital also offer a merchant cash advance for younger businesses.

Fees and interest rates: Boost Capital do not list their exact pricing on their website, but do show on their calculator that in place of interest rates they charge a ‘Factor Rate’ on borrowed amounts. This is the same way of pricing to a Merchant Cash Advance.

Security required: Personal Guarantee

Application to receiving funds: Businesses can be approved and receive funding in as little as two days.

3. Capify

Trustpilot score 4.7/5 (271 customer reviews)

Small Business Loan

Description:

Business owners can use Capify’s loan for whatever they need. So it's a great way to get a short term business loan, no matter the business plan.

  • Amounts: £5,000 - £150,000
  • Terms (months): 6 - 12
  • Rep. APR: N/A
  • Finance calculator: No

Application Criteria:

Applicants must run a UK-based business as a limited company. They must also process more than £10,000 a month through their business bank account. You will also need at least 12 months’ trading records.

Fees and interest rates:

We couldn't find the Capify interest rates on its website. However, the following fees are listed for their loan product:

  • Initial fee: 3%
  • Processing fee: £295
  • Monthly service fee: £25

Security required:

N.A

Application to receiving funds:

N.A

4. Fleximize

Trustpilot score 4.8/5 (279 customer reviews)

Unsecured Business Loan

Description:

Fleximize is a UK-based business lender and web platform. It aims to provide a suite of flexi funding options. The Fleximize application is mostly done online with additional phone support from a dedicated relationship manager.

  • Amounts: £5,000 - £250,000
  • Terms (months): 1 - 24
  • Rep. APR: 42.20%
  • Finance calculator: Yes

Application criteria:

Fleximize funds UK registered limited companies and LLPs. Sole traders or partnerships can apply for finance of over £25,000. A minimum trading history of six months and a minimum turnover of £60,000 is needed.

Fees and interest rates:

Fleximize charge a monthly interest rate on outstanding capital. There are no early settlement fees. Borrowers are instead able to repay early at any time.

Security required:

Personal guarantee.

Application to receiving funds:

Fleximize advertises that the application takes 10 minutes and that funds are deposited within 48 hours of submitting a full application.

busines loans UKChoosing the right finance for you business can be a hassle. But it needn't be.

5. Spotcap

Trustpilot score 4.9/5 (83 customer reviews)

Business Loan

Description:

Spotcap is a provider of business financing in the UK, mainland Europe and Australia. It uses a simple online application to determine your business's financial health. From that, it'll let you know pronto the loan amount you can access.

  • Amounts: £50,000 - £250,000
  • Terms (months): 1 - 24
  • Rep. APR: 24.2%
  • Finance calculator: Yes

Application criteria:

Spotcap asks that your business be based in the UK and has been trading for a minimum of 24 months. You also have to have a UK business bank account and a yearly turnover of at least £500,000.

Fees and interest rates:

Spotcap charge a 2% arrangement fee for their business loan credit line.

Security required:

None.

Application to receiving funds:

The application decision take a day. Funds are deposited within 24 hours of the request.

6. MarketInvoice

Trustpilot score 4.5/5 (232 customer reviews)

Invoice Discounting

Description:

Up one place from 2018, MarketInvoice has been helping UK companies with selective invoice finance since 2011. It brings businesses together with investors willing to advance a proportion of an invoice's worth up front. In return, they receive a cut of the invoice's value.

  • Amounts: Dependant on invoice value
  • Terms (months): Spot financing, contract or ongoing
  • Rep. APR: N/A
  • Finance calculator: No

Application criteria:

MarketInvoice requires that you have a limited or LLP company based in the UK or Ireland. It needs to have a minimum turnover of £100,000. You must sell goods or services to other businesses on credit terms and have traded for at least six months.

Fees and interest rates:

MarketInvoice fees vary dependant on the specific facility used. Typically a fee of 1 - 3% is charged on the invoice value. There might also be monthly admin fee.

Security required:

None.

Application to receiving funds

MarketInvoice offers an entirely online application process that takes minutes to complete. Once approved to sell your invoices, it can take up to 24 hours to get acceptance on new creditors. When agreed, funds are normally deposited into your account within 24 hours.

7. Satago

Trustpilot score 4.6/5 (44 customer reviews)

Invoice Finance

Description:

Satago offers a technically advanced invoice finance system. Its online platform sends automated reminders to customers in relation to unpaid invoices. It also lets suppliers know about outstanding invoices and provides credit reports on the risk levels of customers too.

  • Amounts: Up to 85% of invoice value
  • Terms (months): Ongoing
  • Rep. APR: N/A
  • Finance calculator: No

Application criteria:

Satago clients must have goods or services that are paid on credit terms. They also need a minimum trading history of 12 months and operate as a limited company.

Fees and interest rates:

Satago charges fees from 1% a month on the invoice value being factored. This is then charged once clients settle the balance of the invoice. There are no other set up or admin fees advertised.

Security required:

None.

Application to receiving funds

Satago offers ongoing invoice finance facilities for its customers, with an online application process that takes minutes to set up. Once arranged, a customer's invoices can be submitted and following acceptance funds can be accessed in a matter of hours.

8. Funding Circle

Trustpilot score 3.9/5 (5,638 customer reviews)

Unsecured Business Loan

Description:

Down two places from 2018, peer to peer platform Funding Circle enables investors to lending directly to businesses. Meanwhile, business owners get fast, easy access to funds, helping them grow or cover shortfalls in cash flow.

  • Amounts: £10,000 - £500,000
  • Terms (months): 12 - 60
  • Rep. APR: N/A
  • Finance calculator: No

Application criteria:

Funding Circle applicants must be UK residents with UK registered office and have been trading for over two years. Tenants are limited to £50,000 for unsecured loans. Directors and shareholders must have no connections to any liquidated businesses, or have any CCJs registered in the last 12 months.

Fees and interest rates:

Funding Circle’s rates start from 1.9%. Arrangement fees range from 1.5 - 10%, depending on the method of application (direct or introducer led). There are no fees for early repayments.

Security required:

Personal guarantees from all majority shareholders.

Application to receiving funds

Funding Circle’s application can take as little as 20 minutes to complete. The platform's credit assessment team will review your complete application and get back to you within two working days. Businesses that pass the credit assessment will then be listed on the marketplace for up to 14 days.

9. Santander

Trustpilot score 1.5/5 (1,709 customer reviews)

Small Business Loan

Description:

Santander UK is a large retail and commercial bank registered in England, Wales and Scotland. It is a wholly owned part of the major global bank, Banco Santander.

  • Amounts: £2,000 - £25,000
  • Terms (months): 12 - 60
  • Rep. APR: 8.9%
  • Finance calculator: Yes

Application criteria:

To be eligible for Santander's loan you must also be a Santander Business Current Account holder. All applicants must be 18 or over, and all shareholders and directors must be UK residents.

The business must be UK registered and have a healthy credit score.

Fees and interest rates:

Santander’s interest rates range from 4.9 - 24.9%. They do not charge any arrangement fees, however, early settlement fees may apply. Borrowers are able to repay their loan at any time in full, but monthly overpayments don't seem to be accepted.

Security required:

It's tough to find the exact security required by Santander. However, their terms of service advises that, if you don't make repayments, overdue balances will be claimed from your Santander account.

Application to receiving funds

Santander is unclear on the application reviewal period. However, once approved, contracts are sent out to be signed. Once returned and accepted, funds are released to the borrower.

10. Esme Loans

Trustpilot score N/A (1 customer review)

Small Business Loan

Description:

Esme – owned by NatWest – provides unsecured business finance that can be used for a range of business purposes. This includes working capital, expansion capital and asset buying.

  • Amounts: £10,000 - £150,000
  • Terms (months): 12 - 60
  • Rep. APR: 9.51%
  • Finance calculator: Yes

Application criteria:

Esme applicants must be over 18 years old and be a director of a UK limited company. They also need to have been actively trading for at least 18 months. Finally you'll need to be turning over more than £15,000 per year.

Fees and interest rates:

Esme interest rates range from 3.84% - 26.4%. Borrowers can make early repayments with no fees. You can also make overpayments at any time to reduce the interest you'll pay on the outstanding balance.

Security required:

Personal guarantee.

Application to receiving funds:

From the information available online, it’s unclear how long it takes for Esme to make decisions on applications. But once approved, the money will be sent to your account within an hour. This means you should receive your funds on the same day – if your bank account can receive faster payments.

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The big business loans guide

Business loans are an information minefield. Should you get a loan, how do you know which is the best provider for you, how will your business qualify for a loan, should you take out business loan insurance? To help business owners navigate these waters, we’ve put together this guide to business loans: simply find the topic you’d like to know more about below and use the links to find out more.

Quick question links

What is a business loan?
• How does a business loan work?
Should I get a business loan?
• How do I qualify for a business loan?
What documents do I need to apply?
Can I get a business loan to buy a business?
• What is a good credit score to get a business loan?
• Should I get insurance for business loans?
• Comparison: what are the different types of business finance?
• FAQ

What is a business loan?

A business loan is a form of finance to be used for business activities. As with most loans, it requires creating debt, which is then repaid with interest.

How does a business loan work?

A business loan works as an assessment by a lender of a borrower’s creditworthiness which, if successful, is followed by releasing funding into your business bank account. You will then be expected to repay the loan – often in monthly installments – plus interest.

The exact percentage of interest the lender charges on the money received by the borrower is the ‘interest rate’ of the loan and is often expressed as an annual percentage rate (APR). This rate will vary based on your business’ circumstances and between different lenders, based on their risk appetite and the perceived level of risk involved in lending to your business.

Should I get a business loan?

Whether you should or shouldn't take out business loans is a matter of your personal attitude towards debt. To explore the topic further, we asked Alexander X. Douglas – lecturer in philosophy at the University of St. Andrews – to outline the history and philosophy of debt, including arguments on both sides of the fence.

On a more practical level, it’s useful if business owners have a robust idea of the health of their business before looking into finance options. To this end, we’ve put together a health check tool you can use if you’d like to look into your business’ health further.

empower you business (1) A business loan is a form of finance used to power business activities.

How do I qualify for a business loan?

How exactly you qualify for a business loan will vary dramatically depending on the lender you approach, the type of finance you’re trying to access, and the amount of money you’re requesting. However, as a rule of thumb, loan providers often consider more than 10 factors relating to you, your business and its performance. It’s also worth bearing in mind that – generally speaking – many lenders aren’t keen to loan more than 20% of your business’ annual turnover.

We’ve listed out the remaining qualifying factors below:

Area of interestFurther information
The business’ previous financial performanceHow well your business has been doing historically, usually within the past year, but sometimes up to five years.
Your experience in business directorshipFor example, if you’ve been a director of the business for a decade, this is a positive signal that you could be a reliable recipient of finance.
Your personal credit scoreYour personal credit score gives lenders an insight into your individual financial situation, as well as highlighting any areas of potential concern, such as overdue personal debts.
Your personal payment historySimilar to a personal credit score, your own payment history may help lenders learn about your attitude toward repayments.
The business’ credit scoreBusiness credit scores are an assessment of your business’ creditworthiness, as conducted by credit reference agencies.
The business’ payment historyFor example, has the business not paid off debts in the past? Have there been any County Court Judgments against it?
Your business planParticularly relevant to start-ups and new businesses, lenders often ask to see that you’ve thought through how you’ll use the money to generate repayments.
Any previous history of business directorshipsIf you’ve run businesses in the past, this may offer lenders clues about how you manage a company. For example, lengthy spells in a string of successful businesses could be taken as a positive sign.
Performance of connected businessesIf you are a director of multiple businesses then their performance can also be taken into account when applying for financing.
The supply chain of the businessA business’ supply chain can be an area of interest to lenders. As an example, if you sell Product Y but the news is reporting a global shortage of that product, then this might be taken into account when deciding whether to approve an application.
Your market segmentThe sector your business is in can play a part in some lenders’ assessment criteria, especially if that market segment is widely reported as doing well or poorly.
Customer reviewsIf a lender looks up your small business online and sees a string of repeated poor reviews, this could be perceived negatively for your application.
Quality of assetsIf you are taking out a secured business loan, then the quality of the asset you’re putting up as collateral or ‘security’ may also be considered. This is because this equipment or building will be what’s recovered should the business default on the debt.

What documents do I need to apply?

Some lenders (like us) want to keep business loan requirements as simple as they can when you’re applying for financing. That’s why we specifically only ask for a few docs from you, namely:

bank statements
VAT returns
or company accounts

Then, if we think you're eligible, we'll approve you for up to £200,000. Simple.

Can I get a business loan to buy a business?

If you do not already own a business, it’s very unlikely that you’ll be able to take out a business loan to acquire a company. If, however, you’re a business owner looking to buy another business entirely, some lenders may consider lending to you, if you can demonstrate that buying the business will not negatively impact your ability to repay the funds.

Some lenders will also allow a business owner to take an unsecured loan to help buy out a co-owner. Sometimes such lenders will want to see a Share Purchase Agreement (SPA) drawn up, to demonstrate you are serious about the move. If you’re in doubt, contact your preferred lender directly and ask them what situations they’re willing to cover.

What is a good credit score to get a business loan?

Unfortunately a credit score on its own usually isn’t enough help to know whether or not you’ll be eligible for a business loan, as most business lenders use a lot of additional criteria before making any assessment of creditworthiness, or what interest rate they’ll charge you.

Instead, the main thing to know is whether or not your business is healthy, for example whether it’s defaulted on debt in the past, has any outstanding County Court Judgments (CCJ) against it, as well as whether it has a solid customer base and a steady revenue stream. For those looking to learn more on the topic, we’ve put together a business health check tool.

Should I get insurance for business loans?

Business loan insurance is not a legal requirement, but some owners consider taking it out to help give them peace of mind. This is because, if any loans are outstanding and the business owner dies or falls seriously ill, the impact on that business (and its employees) can be very serious.

As a result, some insurance providers offer cover in the form of a lump sum that is paid out when a specified director passes away or – in more comprehensive policies – if that person falls critically ill. The insurance lump sum will usually be the same amount of money as what’s outstanding on the loan. In return for this, you’ll be expected to pay regular premium payments to the insurance provider.

Whether you do or do not take out business loan insurance is entirely down to you, although as there’s a regular cost, most owners will discuss the decision with the other business directors before taking out such insurance.

Comparison: different types of business loan

Type of business loanWhat's it used for?Further reading
Unsecured business loanAccessing finance without requiring security, although a personal guarantee may still be asked foriwoca's credit facility, explained
Secured business loanBorrowing large sums of funding, secured against a valuable asset, such as a homeSecured loans and unsecured business loans; what's the difference?
Peer-to-peer loansOnline matching of borrowers & lenders, helping businesses avoid traditional overhead costsWhat is peer to peer lending?
Start-up fundingA small loan or grant, often backed by the Government, to get a business up & runningStart-up funding options in 2019
Merchant cash advanceReceiving monetary advances in return for a set amount of your debit and credit card salesWhat's a merchant cash advance?
Asset financeCredit to specifically buy or lease an asset, product or tool you'll use to run your businessWhat is asset finance?
Invoice financeReceiving an advance ahead of an invoice payment date, in return for a feeWhat is invoice financing?
Business credit cardsQuick access to small amounts of finance. Interest is charged on a monthly basis, based on the outstanding balanceBusiness credit cards: what do I need to know?
Business overdraftsShort-term and relatively cheap finance, where you pay interest on the balance borrowedWhat is a business overdraft?
Investment financeSecuring often significant funding in return for giving up a share of your business to the investor(s)Start-up funding options in 2019
CrowdfundingRaising money from many people, who all contribute a small amount in return for a small equity stakeStart-up funding options in 2019
Specialist financeGetting financial backing for a niche business through specialist lendersAuction finance, Building loans and construction finance, Farm loans and agricultural finance, Pub loans
Trade creditLetting you buy stock or goods without paying the supplier for them upfrontTrade credit, what you need to know

FAQ

Do you have further questions about business loans? If so, why not give us a ring on 02037780274, email us on contact@iwoca.co.uk or you can click the blue icon on the bottom right of the screen to chat with one of our advisors. And of course, if you’d like to apply for one of our loans, you can check your eligibility and make an application using the “apply” button at the top of the screen.


Mat White is our accountant relationships manager at iwoca and co-host of 9 to when?, our new podcast. He moved to iwoca from one of the UK’s top commercial finance brokerages and, along with his background in the finance and accounting professions, has experience in everything from farming to civil engineering, spending time in the Army and even running a bar in the French Alps. He describes himself as a great shot, terrible golfer and decent cook.

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