How to compare UK business loan providers

There is no single best business loan provider in the UK, so the useful question is how to compare them. The right lender depends on what you need the money for, how long you have traded, your credit profile, whether you can offer security and how quickly you need funds. This guide sets out the four main types of provider, the factors to compare them on and a simple method for putting two offers side by side. Smart Funding Solutions compares lenders across all four types as a broker, but the method works whether or not you use one.

01How do I compare business loans from lots of lenders at once?

The quickest way to compare business loans from lots of lenders at once is to use a whole-of-market broker or matching tool that checks your details against many lenders' criteria before any full application. Smart Funding Solutions, a whole-of-market commercial finance broker, runs Instant Quotes against its panel of 300+ lenders with no credit check, then compares the offers on total cost.

How to compare many lenders in one go

1. Gather your numbers: amount, purpose, annual turnover, trading history, whether you own property and any credit issues.
2. Run a soft comparison: Instant Quotes matches your answers against the lending criteria of our panel and shows which lenders fit, without a credit search.
3. Shortlist on total cost: compare the total repayable, fees, term, early repayment terms and guarantees, as set out earlier in this guide.
4. Apply once through one adviser: a broker presents one prepared application to the lenders most likely to approve, rather than you applying to each.
5. Compare written offers: check what you receive after deductions and the full repayment schedule. The business loan calculator helps.

What to watch

• Price comparison sites list products but do not prepare or present your case.
• Each full application can leave a hard search on your file. See does a business loan affect personal credit.
• Check how any broker is paid; Smart Funding Solutions may charge a fee and lenders typically pay commission, disclosed before you proceed.

The British Business Bank's Finance Finder explains the main types of finance, and our business finance rate index shows typical ranges from our panel. For the trade-offs of using a broker, read why use a business loan broker.

02The four main types of business loan provider

High street and challenger banks

The large UK banks, including Barclays, HSBC, Lloyds, NatWest and Santander, along with challengers such as Metro Bank, offer term loans, overdrafts, asset finance, invoice finance and commercial mortgages. Many businesses start with the bank that holds their current account because it already sees their transaction history.

Strengths: competitive pricing for established, profitable businesses; a wide product range. Limitations: stricter criteria and slower decisions; newer businesses or those with credit issues are often declined. See our guides to Barclays business loans and Lloyds business loans.

Online and alternative lenders

Online lenders use technology and open banking data to assess applications, which can mean shorter forms and faster decisions. Examples include Funding Circle and iwoca. Products range from fixed-term unsecured loans to flexible credit lines and revenue-based finance.

Strengths: speed, simpler applications and appetite for businesses banks may turn down. Limitations: costs can be higher, terms are often shorter and personal guarantees are common. Our guide to banks vs alternative lenders compares the two in detail.

Specialist lenders

Specialist lenders focus on particular products or sectors: asset finance for machinery and vehicles, invoice finance, property and bridging finance, or industries such as healthcare, hospitality and construction. Because they understand the asset or sector, they can sometimes lend where a generalist would not, or structure repayments around how the business earns.

Government-backed schemes

The British Business Bank supports lending through schemes delivered by accredited lenders. The Start Up Loans programme offers personal loans for business purposes to people starting or in the early years of running a business. The Growth Guarantee Scheme, available since 1 July 2024, gives lenders a government guarantee on part of eligible loans; the borrower remains fully liable for the debt. Check the British Business Bank for current availability.

03Ten business loan providers compared

The table sets ten well-known providers from our panel side by side: two high street banks, two challenger banks, three online lenders and three specialists. Loan sizes, terms and starting rates come from the rate cards these lenders give us as a broker. The lowest rates go to established, profitable businesses with strong credit; the rate you are offered depends on your business, the amount, the term and the lender's own assessment.

Provider	Finance on our panel	Loan terms	Rates from
HSBC High street bank	Unsecured loans £50k to £300k Invoice finance £100k to £10m	Up to 10 years	9.6%
NatWest High street bank	Unsecured loans £25k to £50k Invoice finance £25k to £20m	Up to 7 years	8.2%
Allica Bank Challenger bank	Unsecured loans £25k to £150k Asset finance £20k to £2.5m Asset refinance £50k to £2.5m Revolving credit £25k to £2m	Up to 8 years	9.9%
OakNorth Bank Challenger bank	Unsecured loans £1m to £20m Revolving credit £1m to £20m	Up to 5 years	6.75%
Funding Circle Online lender	Unsecured loans £10k to £750k Revolving credit £10k to £250k	Up to 6 years	6.9%
iwoca Online lender	Unsecured loans £10k to £1m	Up to 5 years	18%
Fleximize Online lender	Unsecured loans £10k to £1m Secured loans £26k to £500k	Up to 5 years	10.8%
Close Brothers Specialist: equipment and invoices	Asset finance £10k to £20m Asset refinance £25k to £1m Invoice finance £50k to £10m	Up to 10 years	8.5%
Bibby Financial Services Specialist: invoices and equipment	Asset finance £10k to £2m Asset refinance £20k to £1.5m Invoice finance £50k to £10m	Up to 10 years	9%
Braemar Finance Specialist: professional firms	Unsecured loans £10k to £500k VAT and tax loans £25k to £500k	Up to 5 years	11.17%

Our lenders' rates and criteria change, so treat the table as a starting point rather than an offer. These ten are a selection: our wider panel covers 300+ lenders, and the best fit for a particular business is often a lender it has never heard of.

04What to compare between providers

• Total cost: interest, arrangement fees, early repayment charges and any other costs over the full term. Our guide to business loan interest rates explains how lenders price risk.
• Fixed or variable rate: fixed rates give predictable repayments; variable rates can move with the market.
• Repayment structure: monthly, weekly or daily; whether you can overpay, repay early or match repayments to seasonal income.
• Speed: how long the lender takes to decide and release funds once it has everything it needs.
• Eligibility: trading history, turnover and credit requirements, and whether a personal guarantee or security is needed. Our guide to how lenders assess business loan applications explains what each lender checks.
• Sector knowledge: some lenders understand particular industries, assets or business models better than others.
• Transparency and service: clear terms, no hidden charges and a responsive contact if things change.

05How to compare two loan offers side by side

1. Work out the total repayable for each offer: add up every scheduled repayment over the term, then add any arrangement, broker or other fees.
2. Subtract the amount you actually receive. If a fee is deducted from the advance, you receive less than the headline loan, so the true cost is higher than it looks.
3. Compare the repayment pattern with your cash flow. A cheaper loan with weekly collections may strain a business paid monthly by its customers.
4. Check the exit terms: what it costs to settle early, and whether interest is rebated if you do.
5. Weigh the security: a personal guarantee or charge over property is part of the price, even if it is not a cash cost.

A loan with a lower rate but a large fee and a long term can cost more in total than a shorter loan at a higher rate, which is why the total repayable matters more than the headline figure.

06A worked example: two offers for £50,000

Here we run the method on two illustrative offers for the same £50,000. The figures are examples to show the arithmetic, not quotes.

	Offer A	Offer B
Interest rate	9% a year	12% a year
Term	3 years	2 years
Arrangement fee	3% (£1,500), taken from the loan	None
Amount you receive	£48,500	£50,000
Monthly repayment	£1,590	£2,354
Total repaid	£57,240	£56,488
Total cost of borrowing	£8,740	£6,488

Offer A has the lower headline rate, yet it costs £2,252 more in total because of the fee and the longer term, and you receive £1,500 less. Offer B is cheaper overall but asks for £764 more each month, so it only suits a business whose cash flow can carry the higher repayment comfortably. That trade-off between total cost and monthly affordability is the decision most borrowers actually face. Our business loan calculator runs the same sums on your own figures.

07Which type of provider suits your situation?

Your situation	Often worth considering
Established, profitable, strong credit	High street and challenger banks
Need funds quickly for a short-term need	Online lenders, short-term loans, revolving credit
Buying equipment or vehicles	Asset finance providers
Cash tied up in unpaid invoices	Invoice finance providers
New business or limited trading history	Start-up lenders and government-backed schemes
Imperfect credit history	Specialist and alternative lenders

Two offers many businesses meet first are sales-linked funding inside a platform they already use and a fast online credit limit. Our guides to YouLend loans and iwoca loans show what each costs in pounds.

£234,000A transaction we arrangedOne business. Three facilities. £234K arranged.Rather than letting one lender dictate the result, we built the funding requirement across three separate £78,000 facilities.

08Using a broker to compare lenders

09Compare business loan types side by side

Comparing lenders only helps once you know which kind of finance fits the need. The same £50,000 can cost very different amounts as a term loan, a revolving facility or a sales-linked advance.

Type of finance	How you repay	Often suits
Unsecured business loan	Fixed monthly instalments over an agreed term	A one-off cost, with no property offered as security
Secured business loan	Monthly instalments, secured on property or other assets	Larger amounts or longer terms
Revolving credit facility	Interest on what you draw; repay and redraw within a limit	Uneven or seasonal cash needs
Asset finance	Monthly payments, secured on the equipment or vehicle	Machinery, vehicles and kit
Invoice finance	Repaid as your customers pay their invoices	Businesses waiting on customer payments
Merchant cash advance	A share of future card sales	Businesses with steady card takings

When you compare business loan offers, compare like with like: two term loans for the same amount and term, rather than a term loan against a merchant cash advance on headline price alone.

10Comparing smaller business loans, such as £10,000

On a smaller loan, fees make up a bigger share of the total cost. A fixed arrangement fee that looks small on a large loan can add noticeably to the cost of a £10,000 loan, so work out the total repayable for each offer using the method above. Speed and simplicity often matter more at this size, and online lenders, revolving credit and some asset finance providers handle small amounts that some banks will not. Our business loan calculator shows the monthly cost and total repayable on your own figures.

Comparing lenders only helps once you know which kind of finance fits the need.

11APR and protection: what differs when you compare business loans

Business loans are not compared the same way as personal loans. In written evidence to Parliament, the Financial Conduct Authority explains that loans to limited companies are unregulated, that lending to sole traders and small partnerships is regulated only up to £25,000, and that lending above £25,000 is unregulated if it is wholly or mainly for business purposes.

That means many business loan offers do not have to show a standard APR, and some products price with a fixed fee or factor rate rather than interest. The total amount repayable is the figure that lets you compare every offer fairly.

12If your bank turns you down

A decline from one bank is not the end of the search. Under the government's Bank Referral Scheme, a business refused finance by one of nine participating banks, including Barclays, HSBC, Lloyds Bank, RBS and Santander, is offered a referral to a designated finance platform. The British Business Bank says the scheme applies to businesses with a turnover under £25 million.

Alternatively, a broker can search the wider market for you. We look at why the bank declined and approach lenders whose criteria fit, rather than sending the same application to every lender. Our guide to banks vs alternative lenders covers the options after a decline.

13Comparing government-backed business loans

The Growth Guarantee Scheme gives accredited lenders a 70% government-backed guarantee on facilities of up to £2 million, for smaller businesses with a turnover of up to £45 million. The British Business Bank announced in July 2026 that the turnover limit will rise to £54 million and that terms of up to ten years will be supported for term loans and asset finance, with the changes being introduced through lenders. The guarantee is for the lender: you remain fully liable for the debt, and lenders can still ask for a personal guarantee.

Compare a scheme-backed offer in the same way as any other: on the total repayable, the security and the terms.

14Compare business loan quotes in minutes

The quickest way to compare business loans is to start with the lenders likely to say yes. Instant Quotes shows which lenders on our panel fit your business, with no credit check, and we then search the market and set the offers out on the total you repay. Any broker fee depends on the lender, with nothing to pay upfront. You can also start an enquiry online.