Top 10 UK Small Business Loan Providers (2025)
NatWest / RBS / Ulster Bank
Offers small business loans ranging from £1,000 to £50,000, with representative APRs around 11.6% fixed.
Repayment terms between 1–7 years (extendable up to 10 years upon request).
Provides flexible repayment options and no arrangement fees. forbes.com
British Business Bank (Start Up Loans)
Government-backed loans up to £25,000 per applicant (maximum £100,000 if four directors apply).
Fixed interest rate of 6% per annum.
Includes 12 months of free business mentoring and support. comparethemarket.com+1ukstartupnews.co.uk+1ukstartupnews.co.uk+1comparebanks.co.uk+1
HSBC UK
Offers Small Business Loans ranging from £1,000 to £25,000.
Fixed interest rates with options to defer payments for the first three months.
Provides both Small Business Loans and Flexible Business Loans tailored to SMEs. smallbusinessprices.co.uk
Barclays
Provides unsecured business loans from £1,000 up to £100,000.
Repayment terms up to 10 years with a representative APR of 7.9% on loans under £25,000.
Offers a 6-month repayment holiday at the beginning of the loan term. forbes.com+4businessfinancing.co.uk+4finder.com+4
Bank of Scotland
Offers loans from £1,000 to £1 million with variable and fixed interest rates.
Repayment periods range from 1 to 25 years, depending on the loan amount.
Provides additional services like overdrafts, asset finance, and commercial mortgages. businessfinancing.co.uk
Clydesdale Bank
Provides loans ranging from £25,001 to £10 million.
Flexible and fixed repayment options with terms up to 15 years.
Offers additional financial products like asset finance and invoice finance. businessfinancing.co.uk
Tide
A digital challenger bank offering various business loans, including working capital and invoice discounting.
Utilizes open banking for quick data analysis and loan approvals.
Provides a user-friendly app for managing finances. comparebanks.co.uk
Funding Options
Acts as a broker matching businesses with approved lenders.
Offers secured and unsecured loans ranging from £1,000 to £20 million.
Repayment terms vary between 1 month and 30 years. smallbusinessprices.co.uk+2finder.com+2businessfinancing.co.uk+2
Capify
Provides business loans from £5,000 to £500,000.
Repayment terms over 6 to 12 months with daily or weekly repayments.
Suitable for limited companies trading for at least 12 months. businessfinancing.co.uk+1smallbusinessprices.co.uk+1
iwoca
Offers loans between £1,000 and £200,000, typically limited to one month’s revenue or £10,000 for startups.
Loan terms up to 12 months with the option for early repayment to reduce interest.
Allows top-ups subject to credit limits.
FAQ05: Small Business Loans in the UK
1. What is a small business loan?
A small business loan is a financing option where a business borrows a fixed sum from a lender and repays it over time with interest. It helps businesses with cash flow, expansion, inventory, or equipment needs.
2. Who is eligible for a small business loan in the UK?
Eligibility generally depends on:
Business registration (sole trader, limited company, or partnership)
Time in operation (usually 6–12 months minimum)
Annual revenue
Personal and business credit history
3. What types of small business loans are available in the UK?
Unsecured loans – No collateral required
Secured loans – Backed by business or personal assets
Startup loans – For businesses under 2 years old (e.g., via British Business Bank)
Invoice financing – Based on outstanding invoices
Merchant cash advances – Repayments linked to card sales
4. How much can I borrow as a small business?
Loan amounts range from £1,000 to over £500,000, depending on your revenue, business age, credit score, and lender type.
5. Which UK banks offer the best small business loans?
Top lenders include:
NatWest / RBS
HSBC UK
Barclays
Lloyds
British Business Bank (Start Up Loans)
Tide, Zopa, and iwoca for fintech/digital loans
6. What interest rates apply to small business loans?
Typical APRs range from 6% to 15% depending on:
Business risk profile
Loan amount and duration
Secured vs unsecured
7. Are there government-backed loans in the UK?
Yes, the British Business Bank offers Start Up Loans with:
6% fixed APR
Up to £25,000 per applicant
Mentorship and business support
8. Can I get a loan with bad credit?
It’s possible. Some lenders (like Capify or iwoca) accept lower credit scores, but interest rates will be higher. Alternative funding like invoice finance may also help.
9. How long does loan approval take?
Traditional banks: 2–7 working days
Digital lenders: Same day to 48 hours
10. Can I repay my loan early?
Yes, most lenders allow early repayment. Some may charge an early settlement fee, while others (like NatWest) do not.