Types of business loans in the UK compared
Pick the type of business loan by what the money is for. Equipment and vehicles usually suit asset finance, unpaid customer invoices suit invoice…
Knowledge Hub
Business finance, made clear.
124 plain-English guides, tools and answers to help you understand your options before you speak to a lender.
Featured guides
How do lenders assess business loan applications?
Affordability usually decides the outcome. An underwriter reads recent bank statements and accounts to see whether the business…
Management buyout finance: how to fund an MBO
An MBO is rarely funded by one loan. The management team normally puts in its own money, the seller agrees to take part of the…
Start from your need
What do you need to fund?
Each guide to a funding type explains how lenders structure it, what they look for and where it fits.
Reviewed by a director
Most useful right now
The questions business owners ask us most often before they apply.
Growth Guarantee Scheme: how it works and who can apply
Secured vs unsecured business loans: which should you choose?
What documents do lenders need for a business loan application?
How long does it take to get a business loan in the UK?
Funding fundamentals
35 guides
Business loans
Are business loans tax deductible in the UK?
Only the interest and finance fees on a business loan reduce your tax bill; the money you borrow is not income, and…
Business loans
Business loan interest rates: how they're set and how to compare them
There is no standard business loan interest rate in the UK. Each lender prices each case on risk: your credit…
- Growth Guarantee Scheme: how it works and who can apply
- Personal guarantees on business loans: what directors need to know
- Secured vs unsecured business loans: which should you choose?
- Types of business loans in the UK compared
- Bridging loan exit strategies: how a bridge is repaid
- Business buy now, pay later: how B2B BNPL works and when to spread a cost
- Business finance in a recession: funding your company through a downturn
All 35 guides in funding fundamentals +
- Business finance when a director is in an IVA
- Business grants in the UK vs business loans: which to pursue, and how to combine them
- Business loan mistakes to avoid: 10 common pitfalls
- Business loan myths debunked: what is actually true
- Business loans in Wales: finance options for Welsh businesses
- Debt service coverage ratio (DSCR) explained, with worked examples
- Debt vs equity funding: alternatives to selling shares in your business
- Director's loan account explained: tax, lender views and funding the company
- Finance for a company in a CVA: what lenders will consider
- Green business loans: how to fund sustainability projects
- How to apply for a business loan in the UK: a step-by-step guide
- How to manage business loan repayments, from first payment to last
- How to prepare a cash flow forecast for a business loan application
- How to refinance a business loan to raise capital
- How to use a business loan to fund marketing
- How to write a business plan for a loan that lenders will read
- Long term business loans: matching the term to your investment
- Overdraft vs business loan: which suits your business borrowing?
- Paying off a business loan early: when it saves money
- Pros and cons of business loans: is borrowing right for you?
- Senior debt vs subordinated debt: how the capital stack works
- Short term vs long term business loans: which fits your need?
- Sole trader loans with bad credit: options and rebuilding your credit
- The financial ratios lenders look at: EBITDA, leverage, gearing, interest cover and liquidity
- What is a debenture? Fixed and floating charges explained
- Your first sole trader loan: what to expect
Buying a business
15 guides
Acquisition finance
Buying out a director: how it works and how to fund it
To buy out a director, the remaining owners agree a price for the departing director's shares (usually after an…
Acquisition finance
Finance to buy a block of fees: a practical guide for accountants
Buying a block of fees is usually funded with a mix of your own cash, a business loan based on recurring fee income,…
- Management buyout finance: how to fund an MBO
- Deferred consideration explained: staged payments and earn-outs when buying a business
- Due diligence when buying a business: what to check and what lenders need
- Funding an employee ownership trust: how the sale is paid for
- Heads of terms for a business purchase: what to include and why lenders need them
- How much deposit do you need to buy a business?
- How to buy a business in the UK: a step-by-step guide
All 15 guides in buying a business +
- How to compare business acquisition lenders
- How to find a business to buy in the UK: sources, screening and funding
- How to value a business: a guide for UK SME buyers and sellers
- Loans to buy an accountancy practice: how to fund the purchase
- Should you take a loan to buy a business?
- Vendor finance and deferred consideration when buying a business
Managing cash flow
10 guides
Cash flow finance
How to calculate working capital: formula, ratios and cycle
To calculate working capital, add up current assets (cash, trade debtors, stock and prepayments) and subtract current…
Cash flow finance
Merchant cash advance pros and cons for small businesses
Whether a merchant cash advance makes sense comes down to cost against flexibility. It suits a card-taking business…
- Business credit card vs business loan: which suits your business?
- Business overdraft alternatives: what to do when your bank cuts your overdraft
- How much does invoice finance cost? Invoice finance costs explained
- How to chase late payments and get invoices paid
- How to compare invoice finance providers and quotes
- Import and export finance: how to fund the trade cycle
- Invoice factoring vs invoice discounting: the differences and how to choose
All 10 guides in managing cash flow +
For professional practices
16 guides
Professional practices
Aged debt funding for barristers and other professionals
Barristers and other fee-earning professionals can borrow against fees they have billed but not yet received. How…
Professional practices
Architectural equipment finance: options for UK practices
Match the finance to how long each item stays useful. Plotters, survey kit and furniture suit hire purchase because…
- Buying a pharmacy with a short lease: what lenders need
- Finance for NHS contracts: funding mobilisation and payment gaps
- Healthcare business loans: a guide for clinics and practices
- How much does it cost to set up a veterinary practice?
- How to buy a funeral director business: due diligence and funding
- How to buy an architecture practice: valuation, structure and funding
- How to finance a dental practice: a guide for UK dentists
All 16 guides in for professional practices +
- How to sell a dental practice: price, process and buyer funding
- How to sell a funeral director business on the right terms
- How to sell a pharmacy: preparation, valuation and completion
- How to sell an accountancy practice: price, structure and steps
- How to sell an architecture practice
- How to start an architecture firm in the UK
- Refinancing a dental practice loan: when it pays and how it works
Equipment and asset finance
7 guides
Asset finance
Asset finance and capital allowances: who claims and when
With hire purchase, your business is treated as the owner, so it can usually claim capital allowances on the full…
Asset finance
Bad credit asset finance: how to get equipment funded with a weaker credit history
Yes, a weaker credit history does not automatically rule out equipment or vehicle finance. Lenders that consider…
- CNC machine finance for UK manufacturers and machine shops
- Electric van finance: what to check before you lease or buy
- Finance lease vs operating lease: which should your business choose?
- Hire purchase vs leasing: which is right for your business assets?
- Soft asset finance: funding software, IT systems and fit-outs
Sector insights
25 guides
Hospitality
Bed and breakfast loans: how to buy, set up and finance a B&B
Most people buy a trading B&B with a commercial or semi-commercial mortgage, because the owner lives on site and the…
Construction and property
Buying business premises through an SPV, LLP or SSAS pension
Business premises can be owned by the trading company, a separate property company (SPV), the partners or an LLP, or…
- Cafe business loans: how to finance a coffee shop
- Civil engineering funding for groundworks and infrastructure contractors
- Commercial kitchen equipment finance for UK hospitality
- Construction equipment finance: how to fund plant and machinery
- eBay seller loans: how funding for eBay businesses works
- Excavator and mini digger finance for UK businesses
- Gym equipment finance: leasing and hire purchase for UK gyms
All 25 guides in sector insights +
- How to buy a pub: ownership options, finance and opening steps
- How to finance a restaurant fit-out without draining cash flow
- How to get a loan to start a restaurant: a beginner's guide
- How to open a nursery: registration, costs and funding
- How to start a children's care home in England
- How to value a care home: methods, adjustments and selling
- McDonald's franchise finance: how UK franchisees fund a restaurant
- Pop-up food business finance: funding a street food stall or food truck
- Renewable energy business loans for solar, heat pumps and installers
- Shipping business finance for freight forwarders and maritime operators
- Sports business funding: loans, grants and finance for sports and leisure
- Subway franchise finance: how to fund a store in the UK
- Technology business loans: funding options for tech and media firms
- Telehandler finance: buying, leasing or refinancing a telescopic handler
- Tractor finance explained: hire purchase, leasing and hire
- Wedding business loans: funding for planners, stylists and event hire
Credit and applications
16 guides
Applying and credit
How do lenders assess business loan applications?
Affordability usually decides the outcome. An underwriter reads recent bank statements and accounts to see whether…
Applying and credit
How long does it take to get a business loan in the UK?
Expect anything from a few days for a straightforward unsecured loan to several weeks for a loan secured on property.…
- How to get a business loan with a CCJ
- The five Cs of credit: what lenders assess
- What documents do lenders need for a business loan application?
- What goes into a company credit report?
- Business borrowing: UK banks vs alternative lenders
- Funding Circle business loans and the alternatives to compare
- How to compare UK business loan providers
All 16 guides in credit and applications +
- How to consolidate an iwoca loan
- How to improve your credit score to secure a business loan
- Is a YouLend loan right for your business?
- Lloyds business loans: what replaced Lloyds TSB lending
- What happens in a business finance consultation?
- What is alternative finance for SMEs?
- Why use a business loan broker when borrowing money?
Tools and quick answers
Useful before you apply
Estimate repayments, costs and affordability, check the questions we are asked most, or see how real transactions were structured.
- Business loan calculatorMonthly repayments, total interest and total cost of a term loan.
- Commercial mortgage calculatorRepayments and loan to value on a commercial property purchase.
- Asset finance calculatorMonthly payments on equipment and vehicles, with deposit and balloon.
- Invoice finance calculatorCash your unpaid invoices could release, and the monthly cost.
- Merchant cash advance calculatorTotal repayable and repayment time from a share of card takings.
- DSCR calculatorHow comfortably your income covers existing and new loan repayments.
- VAT calculatorAdd or remove VAT at the current UK rates.
- All calculatorsEvery calculator in one place, with how each one works.
From reading to doing
Can’t find your question?
Every business is different, and a guide can only go so far. A short conversation with a broker will usually tell you which options are realistic before you approach a lender. There is no obligation, and it is free to enquire.