Take your business further with a small business loan

Borrow £1000-£500,000 with flexible repayments. Our small business loans can be used to buy new stock, invest in growth plans, or just keep your cash flow smooth.

  • 24 hours to get a decision
  • Repay early with no fees
  • From 1 day to 24 months
Apply nowSee how much you could get

Applying won't affect your credit score

wedge coral iwoca
red iwoca piggy bank

Loved by over 90,000+ small businesses since 2012

light blue circle
red circle iwoca

How do small business loans work

Small business loans can vary widely depending on the type, provider and sums involved. The general principle is that a lender offers either a set sum of money or a flexible line of credit (an agreed amount you can draw from) to use for whatever you need it for. 

You then repay the amount you borrow over time, plus interest. Banks, credit unions and online lenders offer a wide variety of business loans, so it’s important to choose the right loan for your needs.

line arc

What kind of small business loans are available?

Given the huge number of businesses in the UK, there is a wide variety of small business loans available. The right option will depend on how much you want to borrow, how long for and what you’re planning to use it for.

Term Loans

plus sign

Term loans are your basic form of lending – these are traditional loans with a fixed repayment schedule and a predetermined end date. They’re best suited for long term projects where you’re confident in your ability to meet the payments every month.

Short-Term Loans

plus sign

As you would expect, short term loans are designed for immediate needs. ‘Short term’ in this scenario means they have a term of a year or less and are quick to fund. One important thing to consider is that interest rates for short term business loans will usually be higher, as you’re likely to pay more for the speed and flexibility of the product.

Lines of Credit

plus sign

Lines of credit are built around flexibility – they allow businesses to draw funds as needed up to a set limit. Once you reach that limit, the arrangement ends. These can be useful when you’re not sure how much you need and want to stay in control of how much you borrow and when.

Equipment Financing

plus sign

As the name suggests, equipment financing is meant for purchasing business equipment. That’s because these loans use the equipment itself as collateral. This can be ideal when you need to use equipment to generate revenue, which helps repay the loan.

Invoice Financing

plus sign

Invoice financing allows businesses to borrow against the amounts due from customers, providing immediate cash flow. This can be useful if you have a large number of unpaid invoices, providing short term relief and flexibility.

Merchant Cash Advances

plus sign

Similar to invoice financing, but more theoretical, merchant cash advances are based on future sales. Here, the lender provides funds in exchange for a portion of daily credit card sales, repaid on a flexible term until the sum and interest are repaid.


plus sign

Typically aimed at startups and smaller businesses, microloans offer smaller amounts of funding. At early stages, these can be a route to financing key activities to keep your business moving without the risk of taking on large amounts of debt.

How to apply for a small business loan?

offer stage iwoca
  1. Apply in minutes

    It takes five minutes from start to finish. We're designed with small businesses in mind, so we'll just need the basics about your business to make a decision.

  2. Use your funds

    We'll approve you based on your business performance. You then transfer as much as you need to your bank account, and the funds will typically be in your account in hours.

  3. Repay or top up

    We don't charge early repayment fees: we only charge interest for the days you have the money. If you need more funds, applying for a top up is easy. As your business grows your credit limit will too.

Apply now

Applying won't affect your credit score

line arc

Small business loan FAQs

Here are some questions you could ask yourself about small business loans eligibility. If there’s anything we haven’t covered here, check our FAQ

How much is a small business loan?

plus sign

The cost of a small business loan in the UK can vary significantly based on the type of loan, the loan amount, the term length, and the interest rate. For instance, our Flexi-Loan goes from 2% per month.

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

plus sign

Unfortunately, your credit score alone is usually insufficient to determine your eligibility for a business loan. Most lenders consider many factors, including creditworthiness and interest rates.

The main thing to know is if your business is healthy. This includes checking if it has defaulted on debt, has any outstanding County Court Judgments (CCJ), and has a solid customer base with steady revenue. For those looking to learn more on the topic, we’ve put together a business health check tool.

How to get a small business loan with bad credit?

plus sign

Securing a small business loan with bad credit can be challenging but not impossible. Here's how you can improve your chances:

  • Understand your credit score: before applying for a loan, understand your credit score and what factors led to it. This insight can help you plan on how to improve it
  • Improve your business’s financials: showing that your business is profitable or improvement in its financial health can make you a more attractive loan candidate
  • Consider alternative lenders: if traditional banks have turned you down, consider alternative lenders. they often have more flexible requirements and are more willing to work with businesses that have poor credit
  • Provide collateral: if you have assets that can be used as collateral, this can increase your chances of securing a loan
  • Seek a co-signer: if you can find someone with a strong credit score to co-sign the loan, lenders may be more willing to approve your application. However, this can be risky as the co-signer is equally responsible for repaying the loan.

Remember, obtaining a loan with bad credit can come with higher interest rates. It's essential to weigh your options carefully to avoid further financial strain.

Do I need to take insurance on a small business loan?

plus sign

Business loan insurance is not a legal requirement, but some owners consider taking it out to help give them peace of mind. If the business owner dies or becomes seriously ill, any outstanding loans can have a significant impact on the business and its employees.

Some insurance providers offer a lump sum payment when a director dies or 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 small 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.

When do I need to start repaying my small business loan?

plus sign

Minimum repayments must be made either weekly or monthly, depending on the repayment schedule you agree to when requesting funds. With a monthly repayment schedule you will repay the first month 30 days after drawing down.

How do I get a small business loan from the government?

plus sign

Securing a small business loan from the government can be a beneficial way to boost your business's financial health. To get such a loan, you'll need to follow several steps:

  • Find the appropriate government loan: the UK government has different loan programs for businesses. For new businesses, there is the Start Up Loans scheme. For more established businesses, there is the Enterprise Finance Guarantee. Understand the eligibility criteria and terms for each before choosing.
  • Government-backed lenders usually need a detailed business plan that explains your business model, financial projections, and how you'll use the loan money.
  • Fill out the application: once you've identified the right loan and prepared your business plan, you'll need to fill out the application form. This typically includes details about your business, financial information, and your personal information.
  • Wait for approval: after submitting your application, the lender will review it. This process can take several weeks, and if approved, you'll receive the loan agreement to sign. After the loan agreement is signed and returned, the funds are typically deposited into your bank account.

Government-backed loans have lower interest rates and flexible terms, but they must be repaid. Defaulting can have serious consequences. It's crucial to understand the terms and conditions fully before committing to such a loan.

What documents are needed for a small business loan?

plus sign

The process will very much vary from one lender to another. If you’re interested in taking a loan with us, have a read through how to get a business loan with iwoca. We tried to make the process as transparent and hassle-free as possible.

How to get a small business loan without collateral?

plus sign

That’s a good question and the answer is simple: look for an unsecured business loan.

red circle iwoca

Where to get a small business loan

Different loan providers offer different products, conditions and user experiences. This is why it’s important to select a lender that understands your business needs.

High Street Banks

Traditional banks remain a common source for small business loans, offering a range of products like term loans and lines of credit. However, according to recent research, high street lending as a proportion of all loans is falling.

Alternative Lenders

For those requiring quick funding, alternative or online lender offer a faster, more customer-centric experience. Accordingly, the share of lending to SMEs from alternative lenders has now surpassed the high street, with alternative lenders responsible for 59% of small business loans in 2023. Their streamlined application processes and faster approval times are ideal for businesses that need immediate capital. However, these advantages may come at the cost of higher interest rates. Compare the total cost of borrowing, including fees, to assess whether an online lender meets your needs.

Government-Backed Loans and Grants

The UK government offers several schemes to support small businesses, especially post-Brexit and following the COVID-19 pandemic. The British Business Bank administers programs like the Start Up Loans Company, which provides government-backed personal loans for business purposes.

line arc

What you need to know about small business loans from iwoca

Wondering if an online small business loan from iwoca could be good for your business? Check out the answers below.

What are the criteria to apply to a small business loan?

plus sign

We're happy to consider a wide range of businesses ranging from new startups to established companies. However you must have a UK-based business and operate as a limited company or a partnership. Startup businesses are limited to a maximum credit limit of £10,000.

How long do I have to repay?

plus sign

Our maximum term is for up to 24 months but you can always repay early if you don't need the funding for that long. We only charge interest for each day you have the funding so making early repayments is a great way to reduce the total amount of interest you will pay.

If I apply to a small business loan, are there any commitments to take the funds?

plus sign

No. It’s free to get a quote - you only choose whether to go ahead once you have received an offer. Even then if you want to repay early, you can with no extra fee, you'll only pay interest for the time you have the funds.

Can I take a new loan once my first loan has finished?

plus sign

Of course. We will renew your offer once your loan has ended, assuming your circumstances have not changed. If your business has grown we may even be able to increase your credit limit or reduce your interest rate. Then it’s just a matter of logging in to your account to withdraw the funds.

coral wedge iwoca

We keep our prices simple

We’ll only charge interest on your outstanding balance for the days you’re using your business loan – no early repayment fees, no long-term commitments. Our business loan rates start at 2% a month for a Flexi-Loan, depending on your business.

6 monthly repayments of £1,120

Total repayment of £31,685(3.33% interest rate per 30 days)

Borrow up to £500,000
For up to 24 months

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.

Down chevron to scoll to the next section

Fund your future with a small business loan

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 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.

£3 billion+

approved small business loans


businesses approved

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