Compare Business Loans & Business Funding in the UK
Find the right business loan for your company. We've compared rates, terms, and eligibility from the UK's leading lenders — including an in-depth look at Funding Circle, one of the UK's largest small business lending platforms.
Recommended ProviderFunding Circle — The UK's Leading Small Business Lending Platform
Funding Circle has lent over £15 billion to small businesses since 2010, making them one of the most established alternative lenders in the UK. They offer fixed-term business loans from £10,000 to £750,000 with competitive rates starting from 6.9% per year. Apply online in 7 minutes, get a decision in as little as 1 hour, and receive funds within 48 hours.
6.9%
Rates From
£750K
Max Loan
1 Hour
Decision
4.6/5
Trustpilot
Eligibility Requirements
- • UK limited company only (no sole traders)
- • Minimum 2 years of trading history
- • Annual revenue thresholds apply
- • Personal guarantee required from directors
Potential Drawbacks
- • Not available to sole traders or partnerships
- • Requires at least 2 years of trading history
- • Personal guarantee required from company directors
- • Maximum loan amount of £750,000
Types of Business Loan
Different loan types suit different needs. Understanding your options helps you choose the right structure and avoid paying more than you need to.
Fixed-Term Business Loans
Borrow a lump sum and repay in equal monthly instalments over a fixed term — typically 6 months to 6 years. Rates are agreed upfront so you know exactly what you'll pay each month. Funding Circle offers fixed-term loans from £10,000 to £750,000.
Best for: Established businesses needing capital for growth, expansion, hiring, or large purchases.
- Predictable fixed monthly repayments for easy budgeting
- Competitive rates from 6.9% per year
- No early repayment fees — settle ahead of schedule at no extra cost
- Funding Circle decisions in as little as 1 hour
Revolving Credit Facilities
A flexible credit line you can draw from as needed — similar to an overdraft but often with better rates. Only pay for what you use. Funding Circle's FlexiPay offers up to £250,000 with a flat fee from 1.99% per use.
Best for: Businesses needing ongoing access to working capital for stock, suppliers, or cash flow gaps.
- Draw down funds only when you need them
- Flat fee from 1.99% per use — no compounding interest
- Pay early and waive remaining instalment fees
- Multiple payment methods: virtual card, bank transfer, or direct to account
Start-Up Loans
Government-backed loans of up to £25,000 for new businesses under 3 years old. Fixed interest rate of 6% per year with free mentoring included. Delivered through the British Business Bank's Start Up Loans programme.
Best for: New businesses and entrepreneurs in their first 3 years of trading.
- Borrow £500 to £25,000 per founder
- Fixed 6% per year interest rate
- Free business mentoring for 12 months
- No arrangement fees or early repayment charges
- Alternative: a startup-friendly business credit card (see our /business-credit-cards/startups guide)
Commercial Mortgages
Long-term secured loans for purchasing business premises, commercial property, or land. Terms of 15–25 years with competitive rates. Typically requires a 25%+ deposit and strong trading history.
Best for: Businesses looking to buy their own premises instead of renting.
- Terms up to 25 years for affordable monthly payments
- Fixed or variable rate options available
- Build equity in your own commercial property
- Potential tax benefits through capital allowances
What to Consider Before Applying
Total Cost of Borrowing
Don't just compare interest rates — look at the total amount repayable. Factor in arrangement fees, monthly service charges, and any early repayment penalties. Funding Circle stands out here with no early repayment fees, meaning you can save on interest by settling early.
Speed vs Cost
Faster funding often comes at a higher price. High-street banks offer the lowest rates but take weeks to decide. Funding Circle balances both — decisions in 1 hour, funds in 48 hours, with rates from 6.9%. Alternative lenders offer same-day funding but at higher rates.
Personal Guarantee Risk
Most business loans require a personal guarantee (PG), which means you're personally liable if the business can't repay. Understand the extent of the PG before signing. If you want to avoid personal risk, consider revenue-based finance or merchant cash advances instead.
Business Loan Providers Compared
| Provider | Loan Amount | Rates From | Decision Speed | Early Repayment |
|---|---|---|---|---|
| Funding Circle | £10K–£750K | 6.9% p.a. | 1 hour | No fees |
| Funding Circle FlexiPay | Up to £250K | 1.99% per use | 3 minutes | Waive remaining fees |
| Start Up Loans | £500–£25K | 6.0% fixed | 2–4 weeks | No fees |
| NatWest | £1K–£10M | From 4.5% | 1–3 weeks | May apply |
| Lloyds Bank | £1K–£5M | From 4.9% | 1–2 weeks | May apply |
| Barclays | £1K–£3M | From 5.0% | 1–3 weeks | May apply |
| iwoca | £1K–£500K | From 2% /month | 24 hours | No fees |
| Tide (80+ lenders) | £1K–£20M | Varies | Minutes (eligibility) | Varies |
Rates are indicative and may vary based on business profile, turnover, and risk assessment. Last updated January 2026.
Frequently Asked Questions
How much can I borrow with a business loan?
It depends on the lender and your business profile. Funding Circle offers fixed-term loans from £10,000 to £750,000. Start-up loans go up to £25,000. For larger amounts, commercial mortgages and asset-backed lending can reach into the millions. The amount you qualify for depends on your annual revenue, trading history, credit profile, and the purpose of the loan.
What interest rates can I expect on a business loan?
Rates vary significantly by lender, loan type, and risk profile. Funding Circle offers rates from 6.9% per year for established businesses with strong financials. Government-backed Start Up Loans are fixed at 6% per year. High-street banks typically offer 5–12% depending on security and relationship. Alternative lenders may charge higher rates but offer faster decisions and more flexible eligibility criteria.
How quickly can I get a business loan?
Funding Circle can give you a decision in as little as 1 hour, with funds typically arriving within 48 hours. Some alternative lenders offer same-day funding. Traditional bank loans usually take 2–6 weeks from application to funds landing. The speed depends on the complexity of your application and the amount you're borrowing.
Do I need a personal guarantee for a business loan?
Most business loans from traditional lenders and Funding Circle require a personal guarantee (PG). This means you're personally liable if the business can't repay. The PG is usually limited to a percentage of the outstanding balance. Some revenue-based finance providers like YouLend don't require personal guarantees — but they use your card sales as security instead.
Can I get a business loan with bad credit?
It's harder but not impossible. Traditional banks typically require a good credit score. Alternative lenders are more flexible — they may focus on your business performance and card turnover rather than personal credit history. Revenue-based finance and merchant cash advances are often accessible to businesses with imperfect credit, as they're secured against future sales rather than credit scores.
What can I use a business loan for?
Most business loans can be used for any legitimate business purpose. Common uses include purchasing stock or equipment, hiring staff, marketing and advertising, expanding into new premises, refurbishing existing locations, managing seasonal cash flow, or consolidating existing business debt. Some loans (like Start Up Loans) may require you to outline your intended use in a business plan.
What's the difference between a secured and unsecured business loan?
A secured loan requires collateral — such as property, equipment, or invoices — which the lender can claim if you default. Secured loans typically offer lower interest rates and higher borrowing limits. An unsecured loan doesn't require specific assets as security, but usually requires a personal guarantee. Unsecured loans are faster to arrange but tend to have higher rates and lower limits.
Is Funding Circle a good option for business loans?
Funding Circle is one of the UK's most established business lending platforms, having lent over £15 billion to small businesses since 2010. They're accredited by the British Business Bank and part of the Growth Guarantee Scheme. Rates start from 6.9%, decisions come in as little as 1 hour, and there are no early repayment fees. They have over 16,700 Trustpilot reviews with an 'Excellent' rating. The main limitation is they only lend to limited companies with at least 2 years of trading history.
Speak to Someone Today
Fill in your details and one of our team will be in touch to help you find the best business loan for your needs.
Disclosure: Merchant Insight may receive a referral fee if you apply through our links. This does not affect our editorial independence or the rates you receive. Funding Circle is authorised and regulated by the FCA (FRN 722513). All provider statistics, rates, and Trustpilot scores were believed accurate at time of writing and are sourced from publicly available information. Please verify current figures directly with the provider.