Business loans for limited companies: borrow £1,000 - £500K
Help your limited company soar with transparent, flexible finance to spend on inventory, cash flow or anything else you need.
- Get a decision in 24 hours
- No fees for repaying early
- No impact on your credit score
Loved by over 90,000+ small businesses since 2012
How to get loan for a limited company
Apply in 5 minutes
We designed our loans with small businesses in mind. We'll just need the basics about yourself and your business to make a decision.
Get a decision in less than 24 hours
That's the biggest time we need.
Use your funds
Once approved, you then transfer as much as you need to your bank account, and the funds will typically be in your account in hours.
How do I qualify for a limited company loan?
At its most basic, to qualify for a limited company loan, you need to first be registered with Companies House as a limited company. Beyond that, requirements will vary from lender to lender, but common criteria you might come across include:
- A minimum trading history, often 6 months to 2 years
- Proof of a steady revenue stream and financial stability
- A clear business plan outlining the purpose of the loan
- Good credit history and credit score
- Submission of financial documents such as bank statements, profit and loss statements, and balance sheets
- Personal guarantees from directors or owners (especially if you’re applying for an unsecured business loan)
If you want a more detailed guide, check out our article on how to get a business loan with iwoca, have a read through it and feel free to apply. It won’t impact your credit score.
How much can I borrow as a limited company?
Every lender has a different approach to risk and lending. SMEs are highly diverse, so lenders will usually analyse key information about you to determine how much they can offer you.
- Risk appetite: Different lenders have varying thresholds for the amounts they're willing to loan out. If you have a rough idea of how much you’d like to get, pay attention to the range the lender advertises. For example, with iwoca you can borrow from £1,000 to £500,000.
- Your finances: A company with strong finances is able to take on more debt, and offer more confidence that it will be repaid. At iwoca, we usually have a look at your company's revenues, profits, and debt levels to assess their capability to repay the loan. Your credit score is also something we look at.
- Loan purpose: For instance, a loan for expansion or to invest in growth assets may be a more attractive lending proposition than, say, cash flow management capital.
What factors determine the interest rates for loans to limited companies?
Loans to limited companies have interest rates based on creditworthiness, loan term, and market rates. You can fix the interest rates or make them variable. If you fancy other types of repayments, have a look at some alternative funding options.
Limited company loan calculator
Want to find out how much your limited company could borrow? The calculator below can give you an idea of how much you could borrow and how the term of the loan affects your repayments.Remember, we’ll only charge interest on your outstanding balance for the days you’re using your business loan – no hidden fees, no long-term commitments. So you can repay any time without penalties and save on interest.
6 monthly repayments of £1,120
Total repayment of £31,685(3.33% interest rate per 30 days)
This loan calculator is only an example, your actual rate for your business loan will vary based on your circumstances. Here’s another example: if you borrowed £10,000 for 12 months at 49% representative APR, with an interest rate of 40% p.a. (variable), then, all in all, the total amount you’d repay would be £12,294.
Secured vs unsecured limited company loans
One important decision you'll face is choosing between a secured and an unsecured loan, since this will affect how much you can borrow and how much you’ll repay.
- Secured loans require you to provide an asset as collateral, such as property, equipment, or inventory. This reduces the lender's risk, often resulting in lower interest rates and higher borrowing limits. However, if you default on the loan, the lender can seize the collateral to recover their losses.
- Unsecured loans do not require collateral, which means the lender relies solely on your creditworthiness and financial history. These loans typically have higher interest rates and lower borrowing limits compared to secured loans, and may require a personal guarantee.
How does repaying a limited company loan work?
This very much depends on each lender’s policy. With iwoca, you apply for a loan amount and a repayment duration.
As part of our credit decision, we will consider both and agree upon the repayment schedule during the loan application process. Yet, once you get the money on your account, you’re free to repay early at no cost.
What documents do I need to apply for a loan?
Lenders usually ask for some basic information on you and your business. Once you get an offer, and if you want to move further with it, lenders might ask for documents. For example if you decide to apply for a business loan with us, the process is 100% online.
If we approve your application, here’s what you’d need to do:
- Add your bank details in your account: we’ll send the funds to this account
- Complete an online identity check
- Add details of your company’s directors and major shareholders (Name, date of birth and address)
- Link a debit card that we’ll use for the monthly repayments
- Read and sign the online Credit Agreement and Personal Guarantee.
- Other steps may be applicable depending on your business
Limited Company Loan FAQs
Yes, it is possible to get a limited company loan with bad credit, but it can be more challenging.
Lenders may set higher interest rates, stricter terms, or require collateral to reduce their risk. Some alternative lenders specialise in providing financing to businesses with poor credit histories, though they may ask for a personal guarantee.
Yes, start-ups can obtain limited company loans, although it may be more difficult due to the lack of trading history and financial performance. Start-ups often need to present a business plan, demonstrate market potential, and may need to provide personal guarantees or collateral. Some lenders offer specific start-up loans designed to support new businesses, and government-backed schemes may also be available.
The amount a private limited company can borrow varies widely based on several factors, including the company's financial health, revenue, creditworthiness, and the type of loan. Secured loans typically offer higher amounts compared to unsecured loans. Iwoca, for example, will usually lend up to one month’s revenue, up to £500,000.
While there is no specific credit score for a business loan, lenders do use your business credit score as an indicator of your history of handling debt and credit. Most lenders will require you to have a business credit score of at least 40 to 50, but some lenders will also use alternative metrics alongside your credit score to assess you.
Iwoca’s underwriting process includes looking at your trading history, outstanding debts and assets, as well as your personal credit score if you’re providing a personal guarantee.
Some lenders may need limited companies to provide collateral, such as property, equipment, or inventory, to secure the loan. This helps mitigate the lender's risk and provides assurance that the loan will be repaid. That is called a secured business loan. Other lenders offer unsecured loans, often backed by a Personal Guarantee.
Questions? We're here to help
Call us at 020 3778 0274 from Monday to Friday (9am - 6pm). We can take your business loan application over the phone, or answer your questions about applying online.
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