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Compare Business Credit Lines

Loans for businesses of every size and industry, from top UK lenders including:

2 providers

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    • iwoca logo

      iwoca

      • Flexible finance for small businesses from £1,000 to £1,000,000
      • No long-term commitments and flexible repayments to fit your business
      • Apply online in minutes for a quick decision (some may take up to 24 hours). Applying won’t affect your credit score
      • Minimum annual turnover
        £10,000
      • Available amounts
        £1,000 - £1,000,000
      • UK Available terms
        0 months - 2 years
      See Deal
    • 2 more from iwoca
  • Funding Xchange logo
    Broker

    Funding Xchange Credit Line

    • Discover personalised flexible credit line offers in just 3 minutes
    • Get access to a revolving line of credit that you can draw down when needed
    • It can be used to supplement cash flow and help expand your business
    • Minimum annual turnover
      £10,000
    • Available amounts
      £1,000 - £500,000
    • UK Available terms
      1 - 12 months
    See Deal

    • Suppliers that don't offer Business Credit Lines but may offer suitable alternatives:

    • Portman Asset Finance logo
      Broker

      Portman Finance Group

      • Loans for any business purpose, from cashflow to new equipment, vehicles or expansion
      • Term business loans, recovery loans, short-term and flexible funding, asset finance, vehicle finance
      • Dedicated account managers to guide you, understand your business and find solutions tailored to your needs
      • Minimum annual turnover
        £100,000
      • Available amounts
        £10,000 - £2,000,000
      • UK Available terms
        3 months - 6 years
      See Deal
      • Barclays logo

        Barclays

        • Flexible borrowing for your business - unsecured (up to £100,000) and secured loans available
        • Fixed interest rates available on all loans, plus variable interest rates for loans over £25,000
        • Subject to application, financial circumstances and borrowing history. Eligibility criteria applies
        • Minimum annual turnover
          No minimum
        • Available amounts
          £1,000 - £100,000
        • UK Available terms
          12 months - 25 years
        See Deal
      • 2 more from Barclays
    • 365 Finance logo

      365 Finance Merchant Cash Advance

      Credit/debit card sales required
      • Pay back via a small % of future card sales
      • No security or business plans required
      • One all-inclusive cost. No admin fees, APRs or extras
      • Minimum annual turnover
        £120,000
      • Available amounts
        £10,000 - £400,000
      • UK Available terms
        4 - 18 months
      See Deal
    • YouLend logo

      YouLend Cash Advance

      Credit/debit card sales required
      • Optimise your cash flow and make repayments in line with your sales
      • No interest rate is charged, just a one-time fixed fee
      • Minimum annual turnover
        £36,000
      • Available amounts
        £3,000 - £1,000,000
      • UK Available terms
        1 - 18 months
      See Deal
      • Capify logo

        Capify

        • Flexible, reliable business funding from £5,000 - £750,000
        • Same-day funding options available
        • Check your eligibility online in two minutes
        • Minimum annual turnover
          £120,000
        • Available amounts
          £5,000 - £750,000
        • UK Available terms
          3 months - 2 years
        See Deal
      • 2 more from Capify

Our comparison service features a selection of providers from whom we receive commission. This table is initially ordered according to our commercial arrangements. Use the sorting options at the top of the comparison table to order by other criteria.

Other comparisons

What is a business loan?

A business loan is a form of finance that can be used to help support and expand your organisation.

As with personal loans, you borrow a sum of money, and pay it back, with interest.

One of the most important differences between personal loans and business loans is that with a personal loan, you will be personally liable for repaying the amount you have borrowed.

With a business loan, as long as the appropriate company structure is in place, that responsibility falls to the business instead. This will not be the case, however, if you are a sole trader, or you have secured your business loan with a personal guarantee.

You can also typically borrow more through a business loan, while the interest payments on your business loan may be tax deductible unlike payments on a personal loan.

Types of business loan

Secured business loans

Secured business loans require that you put down an asset such as property as security. Secured loans often come with lower interest rates than unsecured loans as they represent less risk for the lender. They may also give you access to a larger loan amount over a longer term. However, secured loans come with the added risk that you could lose your assets if you miss the payments.

Compare secured business loans

Unsecured business loans

Unsecured business loans are a type of finance that does not require security. These types of loans tend to have higher interest rates because there is a greater risk of the lender losing money if you can't pay off what you owe. Unsecured business loans also require a good financial history and credit rating as evidence that the business will be able to repay the loan.

Compare unsecured business loans

Government loans

There may be government-backed business loans you can access. Examples include the Recovery Loan Scheme, introduced to help with the financial stresses caused by the Covid-19 pandemic, which has now been extended. What schemes are available can vary depending on government policy and changing economic circumstances across the country. So it can be useful to regularly check the Department for Business, Energy & Industrial Strategy's search tool for guidance on the business loan schemes available in your region.

Start up business loans

The Start Up Loan Scheme is a government-backed fund that currently offers personal loans of up to £25,000 to UK businesses owners that have been fully trading for less than 36 months or those looking to start a business. You can apply for free, and there are no early repayment charges. If your application is successful, you'll also get up to 12 months of free mentoring. Government Start Up Loans have a fixed annual interest rate of 6% and must be repaid over a period of one to five years.

Compare start up business loans

Small business loans

Small business loans are for start ups and small businesses to access funding. They can be used for a variety of purposes from hiring new staff to managing cash flow. As with all loans, small business loans are repaid over an agreed time period with interest. Large business loans tend to be cheaper than small business loans because there is less perceived risk with lending to a bigger company.

Compare small business loans

What is a credit line?

A business credit line, also known as a ‘line of credit’, allows companies to borrow money up to an agreed limit. For example, it can take a lump sum and draw down smaller amounts from the pot when needed.

Business lines of credit fall into two categories:

  • Secured credit lines: a secured business line of credit requires the borrower to use their assets as collateral against the loan. The lender will take the collateral if the business fails to pay back what they borrow.
  • Unsecured credit lines: an unsecured business line of credit doesn’t require the borrower to use their assets as collateral against the loan. Unsecured lines of credit tend to have lower credit limits and higher rates of interest.

How does a business line of credit work in the UK?

A business line of credit offers flexible repayments, unlike a business loan or business credit card. When you borrow money with a business line of credit, you and the lender will agree on a date when it must be repaid.

The repayments are not fixed into monthly instalments, but you must repay by the date specified in your agreement. That means that you could pay off your line of credit early without having to pay early repayment charges.

As well as this, you only have to pay interest on the money that you draw down.

For example, if you have a business line of credit from a lender for £20,000 and you only draw down £5,000 to restock inventory, you will only be charged interest on the £5,000.

There are two types of credit line agreements for businesses:

  • Revolving business credit lines: allow you to keep drawing down money up to your credit limit and once it’s repaid your balance tops up again and you can borrow more money from the same account.
  • Non-revolving business credit lines: allows you to draw down money up to your credit limit but once you’ve used your quota, you can’t have anymore – even when you’ve paid it back.

Common uses for a business line of credit include financing:

  • new assets or equipment
  • business expansion
  • start up costs
  • cash-flow problems

Pros and cons of a business line of credit

Pros

Business credit lines can open up new funding opportunities for companies. The benefits of a business credit line include:

  • Flexible repayments: A business line of credit can be paid off early without incurring any early repayment fees.
  • Speedy application: You can apply for a business line of credit quickly online and some lenders will decide within 24 hours.
  • Improve cash flow: A line of credit can help to keep your business running if you have a short-term cash flow issue such as invoices taking longer to be paid.

Cons

There are some disadvantages of a business line of credit that are worth considering before applying. These include:

  • Fixed commitment period: Lines of credit are open for an agreed period of time only, after which the account will be closed. You will have to reapply if you need to borrow more money, even if you haven’t used any funds.
  • Higher interest rates: Business credit lines may have more expensive interest rates than loans or credit cards.
  • Short-term financing: Business lines of credit are short-term funding solutions, so you may need to consider alternative forms of business finance if your business needs long-term funding.

How is a business line of credit different from a business credit card?

A business line of credit tends to be a secured type of borrowing, unlike a business credit card which is a form of unsecured lending. However, unsecured borrowing may be possible with a business line of credit, but this is less common.

Secured borrowing is when you have to use a physical asset, such as property, down as collateral as part of your credit agreement.

Unsecured borrowing doesn’t require an asset but tends to come with higher interest rates.

Business Credit Lines FAQs

Does a business line of credit affect your credit score?

When you apply for a business line of credit, most lenders will do a soft credit check to verify the identity of your business, which won’t affect your credit score. Some lenders may request a hard credit check when you are negotiating the credit agreement, which will leave a visible mark on your business credit report and may affect your credit score.

What are draw and repayment periods?

Draw and repayment periods are the durations of time that you can draw down money from your line of credit and repay what you use. During a draw period, you will be using money from your line of credit. During a repayment period, you will be expected to repay the interest and principal of the loan.

Do credit lines have closing costs?

Most of the time there are no charges to close your business credit line account so long as you keep up with the repayments. Some credit lines will have closing costs and It's important to factor these fees into your considerations when you are evaluating which lenders and financial products are right for you. If there are no closing costs, once your agreement ends, your account will close automatically without any fees. You may have to pay additional fees

How to build/increase your business line of credit?

Some providers let you apply for a credit line increase through your online account. They will usually give you a decision within a few hours of your application. It is important to check that a lender offers the opportunity to increase your loan before applying for a line of credit if you think you will need to borrow more money.

How is a business credit line repaid?

If you borrow money using a business line of credit, you and the lender will agree on a date when it must be repaid. The repayments are not set monthly instalments, but you must repay by the date specified in your agreement. That means that you could pay off your line of credit early without having to pay early repayment charges. It is always worth checking before entering into any agreement, to see if your lender has any early repayment charges.