Access the Right Business Loan, Faster

What Are Business Loans and How Do They Work in the UK?

A business loan is a fixed or flexible sum of capital borrowed by a company and repaid over an agreed period with interest. Unlike personal loans, business loans are assessed primarily on the financial health of the company — including turnover, profitability, trading history, existing debt, and the purpose of the borrowing.

In the UK, business loans are available through high street banks, challenger lenders, peer-to-peer platforms, government-backed schemes (such as those administered under the British Business Bank), and a wide range of specialist finance providers. The right option depends on the size of the loan, the term required, assets available, and the overall credit profile of the business.

Secured vs. Unsecured Business Loans

The most fundamental distinction in business lending is between secured and unsecured facilities. An unsecured business loan requires no collateral — the lender relies on the creditworthiness and trading history of the business. The amount available varies depending on your financials; strong businesses can access significant unsecured facilities. These are typically faster to arrange (often within days).

A secured business loan requires the borrower to pledge assets as security — most commonly commercial property, but also plant and machinery, vehicles, or receivables. In exchange, lenders offer larger amounts, lower interest rates, and longer repayment terms — making them the preferred option for significant capital investment or acquisition finance.

Business Loan Interest Rates: What to Expect

Business loan interest rates vary considerably based on the loan type, amount, term, security provided, and the risk profile of the borrower. Rates typically range from around 6% per annum for well-secured, lower-risk facilities up to 18%+ for short-term unsecured products or more complex situations.

Most lenders also charge an arrangement fee — typically 1%–3% of the loan amount — payable on completion. At GBF, we factor total cost of finance (rate plus fees) into our advice, not just the headline interest rate.

What Can a Business Loan Be Used For?

• Funding growth and expansion into new markets, premises, or territories
• Purchasing equipment, vehicles, plant, or machinery
• Managing working capital and bridging seasonal cash flow gaps
• Acquiring another business or funding a management buyout
• Hiring staff and covering payroll during a growth phase
• Refinancing existing, more expensive or short-term debt
• Paying VAT, HMRC tax bills, or business rates
• Purchasing stock ahead of peak trading periods

How Long Does It Take to Get a Business Loan?

Speed varies significantly by loan type. Merchant cash advances and short-term unsecured loans can be approved and funded within 24–48 hours. Larger secured facilities or structured growth finance typically require 1–3 weeks from application to drawdown, depending on the complexity of the deal and due diligence requirements.

Working through a broker like GBF significantly accelerates the process. We know which lenders are most active and fastest at any given time — and we reduce the back-and-forth that comes with approaching lenders directly, often by weeks.

What Documents Do I Need to Apply?

Requirements vary by lender and loan type, but most business loan applications will require: 2–24 months of business bank statements, recent accounts or management information, a brief overview of the business and purpose of the borrowing, and details of any existing debt or security available. We guide you through exactly what's needed for your specific application.