Borrow a fixed amount over an agreed term
A business loan is a straightforward concept. You borrow a fixed amount, repay it over an agreed term with regular payments, and the finance ends when the loan is repaid. What makes it more complicated in practice is that not every business loan is the same, and the product that looks simplest is not always the most suitable.
The amount, term, repayment structure, security requirements and lender criteria all vary significantly. Getting these right matters as much as the rate.
Secured and unsecured business loans
Business loans usually fall into two broad categories. The right option depends on the purpose, affordability, term, available security and how quickly the funding is needed.
Unsecured Business Loans
May suit you if:
You need funds relatively quickly
You do not want to offer property or an asset as security
You want to borrow without tying the loan to a specific asset
Your business has strong affordability and trading history
Important to Know:
No asset is usually required as security, but lenders may still ask for a Personal Guarantee from a Director.
Secured Business Loans
May suit you if:
You need a larger amount
You are comfortable offering security
You want to explore a longer payment term
You have property, land or other suitable assets available
Important to Know:
The process usually takes longer because the lender needs to value the security and carry out additional checks.
The right option depends on the full situation, not just the rate.
We'll explain the difference clearly before you decide.
Is a Business Loan the right Fit?
A business loan can be a powerful tool - when it matches the need.
When a Business Loan may be suitable
You need a defined amount for a specific purpose, such as expansion, equipment, stock, or a business acquisition
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You want a fixed repayment schedule so you can plan your cash flow with certainty
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You are refinancing existing debt at a more suitable rate or term
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You need to fund a one-off cost that the business cannot cover from its own reserves
When a Business Loan may not be the right answer
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A term loan is not always the most appropriate solution, even if it seems like the obvious one.​
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If the need is a short-term cash flow timing issue, a revolving facility or invoice finance may be more suitable
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If the business cannot demonstrate affordability, a loan is unlikely to be approved regardless of urgency
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If existing debt is already stretching the business, adding a further loan may increase rather than reduce the pressure.
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We will always look at the full picture before recommending this route
The right option depends on the full situation, not just the product.
We'll explain the options clearly before you decide.
What lenders look at
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Trading history (many lenders require at least 12 months, some prefer two years or more)
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Turnover and profitability
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Business bank statements, typically covering the last three to six months
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Filed or management accounts
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Details of existing borrowing and commitments
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The purpose of the loan and how it will be repaid
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Director and owner information, including credit history