Barclays business loans: applying and what to do if you're declined

Barclays is one of the UK's largest high-street banks and offers business lending such as loans and overdrafts. Many business owners start with their own bank. This page is for owners considering a Barclays business loan, or who have been declined, and want to know how banks assess applications and what else is available.

Smart Funding Solutions is an independent commercial finance broker. We are not affiliated with, endorsed by or acting for Barclays, and we don't lend. We compare options across a panel of 300+ lenders, including specialist and alternative lenders. For current Barclays products, rates and eligibility, check directly with Barclays.

01What banks look for in a business loan application

High-street banks tend to have more rigid criteria than specialist lenders. Our guide to how lenders assess business loan applications goes into more detail, but most banks will look at:

• Trading history: how long the business has been running and how stable its revenue is.
• Affordability: whether cash flow comfortably covers the repayments.
• Credit record: the payment history of the business and, often, its directors.
• Purpose: what the money is for and how it will benefit the business.
• Security: whether assets or a personal guarantee are needed to support the loan.
• Existing relationship: banks often favour businesses that already bank with them.

02Documents to prepare

Having your paperwork ready is the easiest way to speed up any application, whether to Barclays or another lender.

Our guide to documents lenders need for a business loan covers this in more detail.

03How to compare loan terms

Whichever lender you use, compare offers on the total cost and fit, not just the headline rate.

• Interest rate: whether it is fixed or variable, and how it is calculated.
• Loan amount: enough to meet the need without stretching your cash flow.
• Repayment schedule: whether payment dates fit your revenue cycle.
• Fees: arrangement, processing and early repayment charges.
• Term length: a longer term lowers monthly payments but usually increases total interest.
• Security: whether collateral or a personal guarantee is required, and what that means for you.

Our comparison of UK banks and alternative lenders explains how their approaches and costs tend to differ.

£50,000A transaction we arrangedHistoric loss. Improving numbers. £50K secured for dental growth.Several lenders focused on the previous year's numbers. We focused on what had changed.

04Alternatives if the bank says no

A decline from one bank doesn't mean no lender will support you. Banks often decline because of short trading history, limited security, a past credit issue or simply because the request falls outside their policy. Specialist and alternative lenders assess applications differently and may consider cases a bank will not.

• Unsecured business loans, which don't require property as security.
• Working capital loans for day-to-day costs.
• Asset and equipment finance, secured on the item you are buying.
• Invoice finance, which releases cash tied up in unpaid invoices.
• Revolving credit facilities, which let you draw and repay as needed.
• Merchant cash advances, repaid as a share of future card sales.
• Commercial mortgages, for buying or refinancing business property.

Some businesses also consider equity routes such as angel investors, venture capital or crowdfunding, which involve giving up a share of ownership rather than taking on debt.

05How to improve your chances of approval

See how to improve your credit score before applying for practical steps.

06How a broker can help after a bank decline