Small Business Loans

A swift injection of capital can help small business loans for both new and existing companies. We can assist you in obtaining the business financing you require if you wish to grow your company, renovate your facilities, or buy more stock.

Although there are many different kinds of business loans on the market, Smart Funding Solutions can assist you in choosing the one that is best for your circumstances and growth goals.

What is a small business loan?

Small business loans are a form of commercial finance that assists in ensuring that businesses have enough capital to pay for ongoing operating expenses. You can easily and affordably finance your business operations with a small business loan. This kind of loan can be sought for practically any business need, including increasing cash flow, buying equipment, hiring personnel, and paying unforeseen expenses.

You can customise a small company loan from one of our alternative lenders or a government-backed programme to meet your unique needs.

Apply for a small business loan

Request a call back

How does it work?

Fill in our form​

A member of the team will be in touch to collect some basic information. This helps us understand the type of funding that would best suit your business.

We find the best funding for you

We use the information you provided to source the best funding options for you and your business using our panel of over 250 lenders.

We present your options

We’ll then present you will all of the funding options available to you and give you time to decide which one you would like to proceed with.

Unsecured or secured business loan?

For business owners in the UK, there are both secured business loans and unsecured business loans available. Unsecured loans frequently have lesser sums, greater costs, and shorter timeframes of payback. However, if you need a bigger loan, you might be able to get more money at a better rate by using an asset as collateral.

What are the different types of business loans?

Small business loans come in two basic varieties: secured and unsecured, as was already mentioned. For UK SMEs, there are numerous different kinds of loans and financing solutions available, we’ve listed some examples below:

With an unsecured business loan, you can take out a loan without having to pledge any of your company’s assets as collateral. Smaller companies which don’t have a lot of readily available collateral to use as security frequently use this to manage the day-to-day cash flow. Many businesses used the recovery loan scheme coronavirus business interruption loan, both of which were backed by the British business bank, to get themselves back on their feet after the covid-19 pandemic.

In contrast, businesses that take out secured loans do so with the understanding that if they fail to make their loan payments, the lender will have the right to seize the agreed-upon asset and hold it in reserve until the loan is repaid in full. The type of business loan you decided to apply for, will depend on your current requirements and circumstances.

What are the best small business loans?

There are several things to take into account while looking for the perfect funding for your business. There is no specific funding option that can be referred to as “the greatest” regardless of your need for the money or your capacity to return it.

However, you must ensure that the best small business loan you select will provide you with the appropriate amount of funding you require, competitive interest rates, and convenient repayment terms. At Smart Funding Solutions, we are dedicated to assisting businesses just like yours in locating the best financing for their operations.

Due to the number of lenders we work with, we can offer a finance option similar to business overdrafts, over a fixed term and in some cases, an interest-only loan repayment option. The loan amount is agreed with the funder, and you’re free to dip in and out of your credit line, as and when needed. We’ll do all the hard work for you, leaving you to do what you do best, running your business.

Fill out our indicative terms enquiry form below and one of our account managers will come back to you within 24 hours with a no obligation quote.

What’s the difference between a small business loan and a personal loan?

Business loans are only permitted for operations and commercial purchases. Some examples of this include using your loan to finance company growth or to purchase new products and equipment.

This is where a personal loan is different because it is for personal purposes alone. On personal loans, lenders typically place restrictions stating that they cannot be used for business purposes and vice versa.

How does a small business loan work?

Any other form of business financing is the same as a small business loan. The creditor provides you money upfront, and you repay it throughout an agreed-upon period, together with any applicable interest and fees.

A wide range of funding options, including unsecured business loans, secured business loans, merchant cash advances, revolving credit facilities, merchant cash advances, invoice financing, unsecured business loans and VAT loans are all referred to as “small company loans.”

Each form of funding option can have a different structure and method of repayment. Some, for instance, enable you to withdraw money as and when you require it. These are referred to as revolving credit facilities or lines of credit. They function much more like a business credit card and are considerably more flexible, charging interest only when you use them.

How long can I take a small business loan out for?

Depending on the particular funding option you select for your company, the period of your small business loan will vary. Small business loans are often obtained for a shorter duration, although they can also be spread over a long term. Factors that dictate the length of the agreement:

What are the fees and rates for a small business loan?

Rates and costs for small business loans will vary widely based on the lender and the sort of financial package they provide. Your business activity, including past performance, industry sector, and credit rating, might also have an impact on the rates.

Even while interest rates are often constant, they are sometimes variable, which means they can change at any point throughout the loan’s tenure. At the beginning of the loan, all fees, charges, and payback terms will be explained and agreed upon so that you are aware of the whole cost.

Our selection of loans provides all business owners with security by offering reasonable interest rates and flexible repayment schedules, even for businesses with short trading history.

Is a small business loan right for my company?

If your business hasn’t been around for a while or you have a poor credit history, it may be difficult to obtain a loan from a standard high street bank.

It’s important to know that banks aren’t your only choice if you’re having problems like these. Small business owners can obtain SME loans from a variety of alternative finance providers and non-bank lenders.

You might have some flexibility if you take out a short-term company loan, particularly if you’re dealing with unforeseen circumstances or seasonal changes.

The procedure of trying to get money from a high street bank can be laborious and irritating. A short-term small business loan might be approved with our panels of lenders in under 24 hours, and the money could be deposited into your account a few hours afterwards.

Can I get a small business loan with bad credit?

If you have a poor credit history, a small business loan from one of our reputable alternative finance providers is a great choice.

To meet certain needs, many lenders have modified their products. Even while you will pay more in interest if you have a poor credit score, you can minimise your expenditures by repaying the loan quickly.

We can identify the ideal product for you regardless of your credit history, even if your credit score is less than ideal.

Do I have to supply a personal guarantee?

You should be prepared to sign a personal guarantee when asking for a small business loan the majority of the time. This legally-binding commitment essentially acknowledges that, if your business is unable to make payments, you, the business owner or company director, will shoulder personal responsibility for doing so.

When you are searching for an unsecured loan product or if you have terrible credit and the lender needs more assurance before agreeing to let you borrow, personal guarantees are typically requested.

If you have concerns about supplying a lender with a personal guarantee, we’ve partnered with a provider that offers personal guarantee insurance.

Do I need a certain credit score for a small business loan?

There is no specific credit rating or business credit score that will ensure that a small business loan application is approved. Your business’s credit score is frequently just one factor that lenders consider when deciding whether or not to lend money because each lender has different requirements.

Smaller business loans are, as was already noted, simpler to apply for with bad credit. This is due to the lender’s lower risk of loss when funding lesser amounts. You should keep in mind, too, that loans with lower credit scores typically come with higher interest rates and require that you provide a personal guarantee.

Can I get a small business loan if I’ve been unsuccessful in the past?

If your company has previously been turned down for a business loan, it’s critical to evaluate your financial status and make sure that funding is the best course of action for your company. There are actions you may do after being refused to raise your credit score and guarantee that any outstanding bills are settled.

You should be in a better position to apply for a small business loan after the financials of your company are in better condition. When applying for finance, if you have any questions concerning your company, please get in touch with our staff at Smart Funding Solutions.

As lenders have a different set of criteria to qualify for any of the funding options they offer, it could be beneficial to use a credit broker like Smart Funding Solutions. We can quickly narrow down the options best suited to your business, depending on your current requirements and history.

What can I use a small business loan for?

Almost any business need can be met with a small business loan. You might require extra funds to increase your stock levels, renovate or expand your workspace, hire more staff, or buy the newest technology.

They can also be used to offset unforeseen expenses like unanticipated expenditures and seasonal variations in the economy. Essentially, you can use a small business loan for any business rationale.

What are the Advantages and Disadvantages of small business loans?

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Advantages

It’s important to think over every detail of the loan agreement before borrowing money. Some general benefits of small company loans are listed below.
Accelerate your potential – Funds are required to take your company to the next level, and a small, short-term business loan provides a quick and affordable approach to achieving your objectives.
Collateral security is not necessary – As most loans are unsecured. Usually lenders, though, might provide you with the freedom to utilise your company’s assets as collateral for the loan if you wish to do so, to benefit some a better rate.
Maintain a steady cash flow – Managing cash flow can be challenging. You might be able to get the breathing room you need with the help of a short-term business loan.

Disadvantages of franchising:

Disadvantages

Here are some significant drawbacks to take into account when applying for a small business loan.
The cost of obtaining finance – Although some small business loans have low-interest rates, both the cost and the capital still need to be repaid. This expense can be reduced by making an effort to maintain the payback terms as brief as possible.
Higher interest rates – The cost of borrowing will be higher if you have a low credit score since you represent a bigger risk to the lender. Applying for a loan when you can afford to pay it back could be advantageous because doing so could help you raise your credit score.

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How much would I borrow?

You might be eligible for a quick, short-term loan from one of our reputable lenders for as little as £1000 or as much as £500,000 with a small business loan.

Depending on how much you need, a lender can ask you to put up assets as security for the loan. The typical repayment period for small business loans is between six months and three years.

You may not anticipate any problems paying back the loan, but you cannot control the future. You must confirm that you are willing to bear the risk of having your asset secured against the financing arrangement.

Can I repay my loan early?

The majority of the lenders we work with do not impose any additional fees for paying off your business loan early, even though some lenders opt to do so. It’s best to check before you commit to any form of financial agreement, having the option to repay early with no penalty is advantageous.

How does it work?

You must be a business registered in England and Wales, Scotland or Northern Ireland to be eligible for a small business loan. A limited company, partnership or sole trader that has been in business for more than two years are often financed by lenders. However, financing will also be considered for start-ups, small businesses, and people with bad credit.

You must tick the following boxes to be eligible:

To find out which finance option might be best for your business, apply online now via our indicative terms portal and one of our account managers will be in touch.

Smart Funding Solutions are authorised and regulated by the financial conduct authority, FRN: 972740

Frequently Asked Questions

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A Small Business Loan is a type of funding ideally suited to micro, small and medium enterprises (SMEs). It provides necessary capital for a broad range of business purposes such as starting a business, expanding operations, buying equipment or managing cash flow.

After approval, the lender provides a lump sum of money which you repay, along with the interest, over an agreed term.

Generally, if you own a small or medium-size business and meet the lender’s eligibility criteria, including having a sound business plan and stable financial history, you can apply for a Small Business Loan.

The amount you can borrow generally depends on the lender’s assessment of your business’s financial stability and your capacity to repay the loan. Amounts can range from a few thousand pounds up to several hundred thousand.

Depending on the lender and the specifics of your application, it can take anywhere from less than 24 hours to a couple of days to secure a Small Business Loan.

The interest rates vary depending on the lender, your business credit score and other factors. It’s advisable to compare rates from different lenders to get the best deal.

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Most lenders offer online applications for Small Business Loans. You’ll typically need to submit bank statements, business accounts, and personal details.

Repayment periods can vary widely, from a few months to a few years, depending on the terms of your specific loan.

Yes, besides the interest, lenders may charge origination fees, processing fees, and potentially early repayment fees. Confirm these details with your lender before committing.

Often, yes. However, some lenders might charge an early repayment fee. Be sure to know the specific terms of your agreement.

If you can’t make your repayments, you could be charged a late payment fee and it may negatively affect your business credit score. Persistent non-payment can even result in legal action.

The decision to get a Small Business Loan should be considered carefully, based on your business need, your ability to repay, and the terms of the loan. If you’re unsure, consider seeking independent financial advice.

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