Business loans
Accelerate your access to business loans and a range of financing solutions up to £100m—fuel your growth with Growth Business Finance.
What is your cash goal?
Let’s fuel your growth
If you are a small-to-medium enterprise (SME), chances are your business will require additional capital at some stage to fuel expansion. Rather than relying on cash investors or banking on organic growth, quick and affordable business loans may offer a more efficient solution. From acquisitions and reducing debt to securing strong working capital, a loan tailored for your business can help you overcome slow cash flow or investor delays. Propel your company’s growth with financing designed to meet your specific business objectives.
Use the funds for...
Business expansion
Provide the cash injection needed to enable business growth
Scale your Marketing
Supercharge your Marketing
Improve cashflow
Maintain a healthy cashflow reserve by taking a loan and getting things under control
Purchase stock
Maintain sales growth by replenishing stock levels
Pay staff
Use funds for paying your staff
Property finance
Acess commercial mortgages, bridging and development finance via a network of lenders
Cover bills
For example HMRC debt
Debt refinance
Reduce your current rate, or find a better repayment structure for your business
Acquire a business
Enable growth and diversification by acquiring a new business or competitor
What is a business loan?
A business loan is a financial sum provided to a company rather than an individual. These loans come in various forms and can be utilized for a broad range of business-related purposes, such as buying inventory, real estate, or vehicles, covering tax obligations, paying employee wages, managing operating expenses, launching a new business, expanding operations, acquiring other companies, franchising, or refinancing costlier short-term debt. Repayment terms and interest rates differ based on the loan amount, the specific type of loan, and the financial standing of the borrower.
We’ve funded businesses from all industries
What types of business loans are available?
Business loans come in various forms. Some require the borrower to offer collateral (security) to lower the lender’s risk, while others don’t. Typically, loans without collateral come with smaller amounts and higher interest rates.
Popular types of business loans in the UK include:
- Bank loan: does what it says on the tin. A bank lends money for business purposes.
- Secured business loan: the borrower must provide a guarantee or collateral to protect the lender.
- Unsecured business loan: no collateral required. The loan is based on the borrower’s credit score.
- Merchant cash advance: short-term borrowing to cover everyday expenses. Suitable for businesses that take card payments from customers.
- Small business loan: loans for businesses with less than 25 employees.
- Invoice finance: Funds are lent against the value of the borrower’s accounts receivable.
- Startup loan: seed cash to get a new business off the ground. Government funds may be available for this type of loan.
- Franchise finance: loans to start a new franchise business or expand an existing one.
- VAT loans: funds to help businesses pay their VAT bill while they wait for customers to pay outstanding invoices.
- Revolving credit facility: much like a bank overdraft. The borrower can dip into an open credit facility as and when funds are needed. The borrowing is repaid from incoming business receipts.
- Business credit cards: credit cards for business use only. Often with higher credit limits and lower interest rates than cards for private individuals.
- Asset finance: large loans usually used to buy plants, machinery, and commercial property.
- Car finance: funds to buy a car or fleet of cars for business use.
- Van finance: funds to buy a car or fleet of cars for business use.
- Ecommerce finance: funds to power online businesses.
- Working capital loans: loans that pay everyday business expenses.
- Refinancing & debt consolidation: combine multiple loans into one, potentially saving on interest, admin fees, and other costs.
- Management buyout finance: the purchase of all or part of a company by its existing management team, usually with the help of external financing.
- SaaS finance: capital for growth that can be repaid in line with a Software as a Service companies’ future sales.
- Commercial mortgage: loans to purchase or refinance a property your business trades from, a single commercial investment property, or a portfolio of investment properties.
- Limited company loans: loans tailored to your business, if registered with Companies House.
- Short-term business loans: need a small amount of cash fast? Take a short-term loan and support your working capital.
What types of business loans are available?
There are many types of business loan. Some require the borrower to provide security (collateral) to reduce the lender’s risk, while some do not. Usually, the lump sum provided is lower and the interest rate is higher for loans where no security is provided.
Common UK business loans include:
- Bank loan: does what it says on the tin. A bank lends money for business purposes.
- Secured business loan: the borrower must provide a guarantee or collateral to protect the lender.
- Unsecured business loan: no collateral required. The loan is based on the borrower’s credit score.
- Merchant cash advance: short-term borrowing to cover everyday expenses. Suitable for businesses that take card payments from customers.
- Small business loan: loans for businesses with less than 25 employees.
- Invoice finance: Funds are lent against the value of the borrower’s accounts receivable.
- Startup loan: seed cash to get a new business off the ground. Government funds may be available for this type of loan.
- Franchise finance: loans to start a new franchise business or expand an existing one.
- VAT loans: funds to help businesses pay their VAT bill while they wait for customers to pay outstanding invoices.
- Revolving credit facility: much like a bank overdraft. The borrower can dip into an open credit facility as and when funds are needed. The borrowing is repaid from incoming business receipts.
- Business credit cards: credit cards for business use only. Often with higher credit limits and lower interest rates than cards for private individuals.
- Asset finance: large loans usually used to buy plants, machinery, and commercial property.
- Car finance: funds to buy a car or fleet of cars for business use.
- Van finance: funds to buy a car or fleet of cars for business use.
- Ecommerce finance: funds to power online businesses.
- Working capital loans: loans that pay everyday business expenses.
- Supply chain finance: provides unsecured cash advances to the supplier(s) in a supply chain. It gets them paid early.
- Refinancing & debt consolidation: combine multiple loans into one, potentially saving on interest, admin fees, and other costs.
- Management buyout finance: the purchase of all or part of a company by its existing management team, usually with the help of external financing.
- SaaS finance: capital for growth that can be repaid in line with a Software as a Service companies’ future sales.
- Mezzanine finance: often associated with acquisitions and buyouts, this is a hybrid business loan that can be converted to equity should the borrower default.
- Commercial mortgage: loans to purchase or refinance a property your business trades from, a single commercial investment property, or a portfolio of investment properties.
- Islamic business loans: shared profit and loss loans, zero interest charges, and a commitment to supporting non-harmful enterprises.
- Match funding: loans to ‘match’ the amount of funding available when applying for a business grant.
- Grant advances: has your business been awarded a grant and is waiting for the funding to come through? There’s a good chance you’re eligible to get a loan to receive the funds quicker.
- Limited company loans: loans tailored to your business, if registered with Companies House.
- Short-term business loans: need a small amount of cash fast? Take a short-term loan and support your working capital.
- Business loans for women: are you a female founder and need capital to grow your business? There’s a loan tailored specific to your needs; let Swoop help you find it.
Business loan calculator – how much can you afford to borrow?
A business loan calculator is an excellent tool to help you estimate the costs of your loan. Use our free calculator below to determine your average monthly interest payments, total monthly repayments, overall interest paid, and the full cost of the loan. It’s a simple way to gain insight into your financial commitment.
Business loan calculator – how much can you afford to borrow?
Your loan details
Your Results
Monthly payments
£0,000
Avg. monthly interest
£00
Total interest
£000
Total cost of finance
£0,000
How does a business loan work?
Business loans can range from as little as £1,000 to several million pounds.
Repayment terms vary, with some loans requiring repayment in just a few months, while others, particularly for plant, machinery, or property purchases, can extend over many years.
Interest rates and fees depend on the loan type and the borrower’s financial situation. Some loans, like Merchant Cash Advances, can be approved in just a day or two, whereas options like Asset Finance may take longer to finalize.
Despite the variety of loans, the fundamental process for obtaining a business loan typically follows the same steps:
- The borrower completes an application. This will usually ask for basic business information and business, bank, and tax records. The lender may also run a credit check on the business and its owners or directors.
- If collateral is required, the borrower will need to provide evidence of its value.
- If the lender is satisfied with the due diligence, they will make an offer, which sets out how much they will lend, the time-period for repayment, and what the interest rates and fees will be.
- If the borrower accepts these terms, an agreement is drawn up and after signing, the funds are either paid into the borrower’s bank account or to a third party if the funds are for something like a commercial property purchase.
How do I repay a business loan?
Repayment terms differ based on the loan type. Short-term loans like Invoice Financing or Merchant Cash Advances are often repaid directly from incoming business revenue, making the repayment process quick and automatic. On the other hand, loans such as Commercial Mortgages typically extend over several years, with borrowers making regular monthly or quarterly payments that include both principal and interest.
Are there any risks involved?
Lenders typically offer loans to businesses that demonstrate a strong ability to repay, minimizing risk for the borrower. However, loans that extend over several years carry the potential for changing business conditions, which could introduce risks to the borrower.
Common risks include:
01
Personal liability
Many loans require security in the form of collateral or a personal guarantee by the business owner or directors. In such cases, loan default could see the owners or directors lose their personal assets.
02
Interest rate fluctuation
Some business loans come with variable interest rates. A sudden spike in rates could affect the borrower’s ability to repay.
03
Loan default
Put simply, the borrower cannot repay the loan – an issue usually caused by a decline in business cashflow. In the event of default, the lender may recover their losses by making claim on collateral and personal guarantees.
04
Too much debt
Most businesses need to borrow, and it is often productive to do so. However, sometimes, businesses can borrow too much. This can put strain on their cashflow and cause some or all of their loans to go into default.
How do I apply for a business loan?
Before you apply for a business loan, make sure you have the necessary paperwork in order:
- Most recent three-years bank and tax records.
- Cashflow forecast.
- Profit and loss statement and recent balance sheet.
- Details of any existing debt.
- List of major customers and suppliers (if B2B).
- List of any assets, such as property or inventory.