How to Get a Business Loan in the UK: Rates, Eligibility and Tips

A business loan is one of the most common ways UK companies fund growth, equipment, hiring or working capital. But approval rates and terms vary hugely depending on how you apply and who you apply to. This guide covers the essentials.

How business loans work

A business loan provides a lump sum repaid in fixed instalments over an agreed term, with interest. Loans can be secured (backed by an asset such as property) or unsecured (based on your business's strength and trading history). Terms typically range from one to several years.

What lenders look at

• Trading history and turnover: how long you've traded and your revenue.
• Profitability and affordability: whether cash flow comfortably covers repayments.
• Credit profile: both business and, for smaller firms, the directors' personal credit.
• Security or guarantees: assets or personal guarantees offered.

Typical rates

Rates depend on the loan type, term, security and your business profile. Secured loans generally price lower than unsecured because the lender's risk is reduced. Always compare the total cost of borrowing, including any arrangement fees, not just the headline rate.

How to improve your chances

• Keep management accounts and bank statements up to date.
• Have a clear, specific purpose for the funds.
• Show how the loan will generate a return or protect cash flow.
• Apply to lenders whose criteria genuinely fit your business.

How we help

A cold application to the wrong lender wastes time and can dent your credit profile. We know which of the 300+ UK lenders suit your sector and circumstances, and structure the application for approval. At Sadi's Commercial Finance, founded by a former banker, we place deals with the right funder from the start.

Need a business loan? See our business loans service or speak to a specialist.