Interest free business loans

Looking for additional finance? We don't provide interest free business loans anymore but you might want to have a look at our Flexi-Loan instead.

  • Apply in minutes
  • No impact on your credit score
  • Get the money on the same day
  • Only pay interest for the days you borrow funds
Apply nowSee how much you could get

Applying won't affect your credit score

wedge coral iwoca
toys shaking hands on top of human mug

Loved by over 90,000+ small businesses since 2012

light blue circle
red circle iwoca

What is an interest free business loan?

Interest free business loans allow you to borrow money without paying added interest on your repayments. These types of loans can work in a variety of ways.

Interest free repayments: where a loan provider allows you to pay back your instalments without added interest. The interest free period may only last for a fixed period of time, and then you may need to make any additional repayments with interest included.

Revenue-based loans: this is a type of loan where you pay back a percentage of the amount borrowed based on your monthly revenue. These loans work on a fixed fee basis rather than interest, so you know exactly how much you’ll be paying before you agree to take out the loan.

When should you consider an interest free business loan?

Interest free business loans, or revenue based finance, can be a good borrowing option for businesses depending on their circumstances. They can be especially suitable for:

  • seasonal businesses: if you’re a seasonal business, you can pay back a higher amount during your busiest months and a smaller amount when your business is off-peak, without being hit by high interest rates
  • new businesses: sales forecasting can sometimes be challenging for newer businesses with limited historical data. Taking out a revenue-based loan provides you with a safety blanket if you don’t quite meet your sales target for one month - and you only need to have been trading for 3+ months
  • growing businesses: revenue-based loans can be a good solution for growing businesses with increasing sales because you can repay the balance quicker than some traditional loans that have a fixed period with an early repayment fee
  • cash flow management: an interest-free loan can help with cash flow management since you’ll make repayments based on your monthly income.
red iwoca piggy bank

With iwoca's Flexi-Loan you can:

  • Borrow from £1,000 to £500,000
  • Get a decision in 1 working day
  • Repay early with no fees

Fund your future with a Flexi-Loan

red circle iwoca

How to get an interest free business loan

You’ll first need to decide how much money you want to borrow and conduct research on the most suitable type of interest-free loan for your business.

The lender will usually want to see your credit score and trading history, such as monthly sales income. They may also ask you to share extra information such as your payment history and personal credit score, business and personal tax returns, current bank statements and legal documents about the company ownership.

The pros and cons of interest free business loans

The benefits of interest free small business loans

  • No interest: you’ll pay a fixed repayment fee, with no monthly interest added
  • Flexible repayments: your repayments are based on sales, meaning that you won’t be in a position where a loan repayment causes you to suffer from cash flow problems
  • Suitable for all: with low requirement criteria, an interest-free loan is suitable for both new and established businesses

The drawbacks of interest free small business loans

  • Sales forecasts: if you’re expecting a decline in sales, then it might end up taking longer to repay an interest-free loan than a traditional loan, such as our Flexi-Loan
  • Your bank account provider:  you may need to have a business bank account with a specific bank to be eligible to apply. 
  • Minimum performance requirements: while you’re able to make repayments based on your monthly income, you’ll still need to meet a minimum performance requirement during the duration of your borrowing period.

Is an interest free loan right for your business?

Interest free loans can be a great choice for businesses that need money fast. But before you make a decision, it’s important to consider how you’d like to make repayments. Some business owners prefer the flexibility of income-based repayments and others might prefer a traditional loan with fixed repayment fees. Looking at both your sales and cash flow projections can help to determine which option might work best for you.

The iwoca story

Over the past eleven years iwoca has grown from an ambitious fintech start-up to one of the fastest-growing and biggest business lenders in Europe. Now we're a team of around 400 in London, Leeds and Frankfurt working towards the goal of funding one million small businesses.

Learn more
picture of the iwoca founders on a red couch
customer success advisor

Questions? We're here to help

Call us at 020 3397 3375 from Monday to Friday (9am - 6pm). We can take your business loan application over the phone, or answer your questions about applying online.

£3 billion+

approved small business loans

90,000+

businesses approved

bbc logo
financial times logo
the telegraph logo
business insider logo
bloomberg logo
evening standard logo

Let’s get started

Applying won’t affect your credit score

Need help? Call us:

Get approved in 24 hours

Applying won’t affect your credit score

What's next?

  • Apply in 5 minutes
  • Meet your account manager
  • Get money in the bank in hours

Need help? Call us:

close cross