Nationwide Business Loans: Available Finance Solutions and Alternatives

Nationwide is a trusted name in UK banking, but there are actually two finance service providers, so be careful to differentiate between them. Whilst Nationwide Building Society doesn’t directly provide business loans, Nationwide Finance, a separate entity, offers a range of business finance products to UK businesses, including business loans for start-ups.

We explore the loans and funding solutions offered by Nationwide Finance, their features and benefits, details of the application process and alternatives to consider.

What are Nationwide business loans?

Nationwide Finance is a direct lender, not a finance broker, meaning there are no broker fees to pay for sourcing funding opportunities. This trusted UK lender mainly offers secured loans. However, it does have unsecured loan options, but these are only available to larger, more established entities, such as listed companies, FTSE 250 firms, charities, and other similar organisations.

The business loans offered by Nationwide Finance primarily cater to limited companies. They’re designed to support a range of business purposes, including managing working capital, investing in growth opportunities, expanding inventory and upgrading premises.

These loans require businesses to provide personal guarantees as part of the funding agreement. Also, depending on your circumstances, the amount borrowed and your credit status, you may incur a legal charge over your residential and/or business property.

Nationwide Finance’s business loans can also help start-ups kick-start growth, ease cash flow concerns and purchase key business assets. 

Key features of Nationwide Finance business loans

• Loan amounts: Nationwide Finance offers business loan amounts ranging from £6,000 to £10 million, making them suitable for a wide variety of business sizes and needs.
• Approval time: Funding decisions can take just 2-4 hours, with funds potentially available within 24 hours of approval.
• Security requirements: Secured loans require businesses to use assets, such as equipment, vehicles or property, as collateral, and all applicants must provide personal guarantees.
• Repayment terms: Nationwide’s business loan terms vary from 12 months to 6 years, with fixed monthly repayments and no early settlement penalties.
• Eligibility: Limited companies are eligible, but sole traders and other forms of business may need to incorporate to qualify.

Nationwide business loan security requirements

As Nationwide Finance's loans are typically secured, borrowers often need to provide business assets as collateral. This can be a stumbling block for some businesses, especially newer companies and start-ups without the necessary valuable assets to leverage.

Nationwide Finance also states that a fixed and floating charge over the assets of your company or any corporate guarantor (a debenture) will also be required. A security fee of 10% (based on future interest) will be charged to remove the security once the agreement is finished. 

Factor this in (and the need to provide a personal guarantee) when considering the risks and whether these loans are right for your business. So, read Nationwide Finance’s business loan terms carefully when exploring their solutions.

Does Nationwide Finance provide business loans for start-ups?

Yes. Nationwide Finance enables new businesses and start-ups to apply for its loans, so long as they’re registered as limited companies. While the conditions and funding amounts for start-up finance are not explicitly advertised differently from its overarching business loan facility, Nationwide Finance has a dedicated department that supports start-ups and tailors loans to their needs.

So, if you need capital to grow your start-up and ease cash flow pressures or you're an entrepreneur looking to purchase a new business, you may get approved for funding.

Benefits of Nationwide Finance business loans

We’ve outlined the key features and security requirements, so what value and advantages do Nationwide Finance’s business loans offer? Here are the key benefits to consider:

• Fast approval decisions.
• Potentially large borrowing amount available (based on your creditworthiness and other key factors).
• A range of repayment lengths to suit short-term and longer-term needs.
• Dedicated account management support
• Fixed monthly payments, meaning consistency of loan repayments.
• Broad access to funding (Nationwide Finance states that businesses of varying credit scores can apply), including start-ups.
• Discounted early settlements (a 10% discount on future interest on the remaining funds to be repaid).

How business loan applications work with Nationwide Finance

Every lender has its slightly different approaches when it comes to loan applications. While Nationwide Finance states that applications can be swift, with the potential for approvals and funds transferred within 24 hours, this depends on various boxes being ticked and all parties (including guarantors) responding promptly.

Here is a summary of the main steps involved when applying for a business loan with Nationwide Finance:

1. You can start your application online or via telephone.
2. Applicants receive an email outlining key terms, details of security requirements and guarantees, plus other limitations, such as confirmation that loans are for business use only.
3. A Nationwide Finance Account Manager will be in touch to explain the conditions, fees and key features of the loan, to establish suitability, before requesting key business and information. 
4. Details of guarantors and assets will be gathered before all parties can sign agreements.
5. An appointment will be arranged to confirm that everyone involved understands all the terms of the loan.
6. 24 hours later (once compliance checks and final confirmation about whether you and any guarantors are happy to proceed are complete), funds are released and a direct debit is set up for repayments.

There’s an online eligibility checker on the Nationwide Finance website, which will help you find out if you meet the criteria before starting an application.

Alternatives to Nationwide Finance business loans

While Nationwide Finance offers secured business loans with fast access to funding, the requirement for collateral and legal charges on assets may not suit everyone. Also, there are various business finance options available from numerous banks, financial institutions and alternative lenders to explore.

Here are some alternatives to Nationwide Finance business loans to consider, offering different levels of flexibility and suitability for businesses in certain industries:

Business overdrafts and lines of credit

For businesses with fluctuating revenue needing financial flexibility, a business overdraft can offer a flexible, on-demand financing option without the fixed structure of a traditional loan. A business line of credit works similarly, but offers a sum of capital (often larger amounts) that can be drawn down, as and when required, and repaid, with options to top up and increase limits ongoing. 

Invoice finance

Ideal for businesses heavily influenced by seasonality and long payment terms, like construction, manufacturing and hospitality, invoice finance helps businesses release cash tied up in unpaid invoices. This frees up immediate working capital without the need for taking on long-term debt.

There are various formats, such as factoring, discounting or selective invoice finance, and modern providers enable integrations with accounting software to make the process as smooth as possible.

Government-backed loans

Companies can explore the Growth Guarantee Scheme, which offers various business finance offerings through partnerships with UK banks, where the government provides a 70% guarantee against the loans to help eligible businesses access financial products. The British Business Bank (backed by the UK government) also offers start-up loans of up to £25,000. 

Merchant cash advances

This revenue-based funding is ideal for retail, hospitality and online businesses. Merchant cash advances provide access to working capital that is repaid as a percentage of future sales. As repayments vary with your sales volume, it eases financial pressure during slower periods.

Flexible small business loans

Many digital lenders like iwoca offer flexible business loans tailored to business needs, providing flexible repayment terms and access to finance for growing companies without many valuable assets to use as collateral. 

Iwoca’s Flexi-Loans are designed specifically for the needs of UK SMEs, helping businesses manage cash flow, expand operations and take advantage of new growth opportunities. These are unsecured loans, meaning you don’t need to provide business assets as security, but you will need a personal guarantee. 

Benefits of our flexible loans include:

• Borrow up to £1,000,000 for a few days or weeks, or as long as 60 months.
• Quick and easy online applications, without the usual heaps of paperwork.
• Fast approvals and access to funds – expect funding decisions within 24 hours, and finance available in a matter of hours after approval.
• We evaluate businesses based on performance and revenue potential rather than just credit scores.
• You only pay interest on what you use, with no charges for early repayment.

Learn how to apply for a business loan with iwoca and use our loan calculator to see your likely repayments.