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Compare Start Up Business Loans

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

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Nationwide Finance Secured Start Up Finance

  • Nationwide Finance help 35,000 businesses get secured finance each year
  • Direct funder - not a broker
  • Same day decision, funds within 24 hours
Find out more
4 providers

Commission earned affects the table sort order. Other products may be available. Find out more

  • Nationwide Finance Limited logo

    Nationwide Finance Startup Loan

    • Nationwide Finance help 35,000 businesses get secured finance each year
    • Nationwide Finance are a Direct Funder
    • Eligibility checked - free, no obligation process
    • Unsecured options may be available to listed companies
    • Minimum annual turnover
      No minimum
    • Available amounts
      £6,000 - £10,000,000
    • UK Available terms
      12 months - 5 years
    See Deal
  • Barclays logo

    Barclays Unsecured Business Loans

    • A quick and straightforward way to finance your business
    • Fixed interest rates, so you'll always know what you'll be paying
    • Take a six-month repayment holiday at the start of the loan (interest will continue to accrue and will be included in your repayments). Only available on loans below £25,000
    • Minimum annual turnover
      No minimum
    • Available amounts
      £1,000 - £100,000
    • UK Available terms
      12 months - 10 years
    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
  • Funding Xchange logo
    Broker

    Funding Xchange Unsecured Business Loan

    • Find funding from a wide range of unsecured finance providers, business assets are not required
    • Can be used to support cash flow, stock or asset purchases and help grow your business
    • See personalised offers from multiple lenders in just 3 minutes, search won’t impact your credit rating
    • Minimum annual turnover
      £50,000
    • Available amounts
      £5,000 - £1,000,000
    • UK Available terms
      6 months - 6 years
    See Deal

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.

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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 start up loan?

Start up loans are a form of funding that can help get a business up and running or expand in its early stages. This can come in many different shapes and sizes. For example, a government start up loan is structured as a personal loan; other start up loans will take the form of business loans. It is important before borrowing that you are aware of the varying level of risk that comes with each of these products.

As with any loan, a start up business loan sees you borrow a set amount and pay it back, plus interest, over an agreed period of time. You can get a start up loan directly from a mainstream lender such as a bank, from an alternative online lender, through the government Start Up Loans scheme or through a broker. Ultimately, the exact way a business start up loan works will depend on the type of loan.

Whatever the loan type, you’ll need to prepare a clear business plan and cash flow forecast before applying.

What are the pros and cons of business start up loans?

Pros

  • Start up loans can be used for a wide range of purposes, from managing cash flow issues to purchasing equipment.
  • A traditional start up loan can provide funding without giving away equity to an investor.
  • Repaying your start up loan on time can help you build a good business credit score.
  • Some lenders will judge your application on your business plan and forecasts more so than your historical financial performance.

Cons

  • You are committing to making regular repayments which could restrict your business’s cash flow.
  • Certain types of borrowing, such as a secured loan, will require an asset as collateral, which you could lose if you fail to meet your repayments.
  • A personal guarantee can leave you as an individual liable for your business loan if the business defaults.
  • Failure to meet your repayments may have a negative effect on your business or personal credit score.

Types of start up business finance

There are other forms of financing available to new businesses that don’t take the form of government start up loans. These alternative options for borrowing can be more expensive and have additional risks attached such as assets used as security or personal guarantees.

It is therefore extremely important that you properly understand the risks attached before using them to fund your start up, and that you are confident in your ability to make repayments.

How to apply for a start up loan

  • To apply for a business loan, you’ll usually need to supply a business plan and financial projections, along with some personal details. This will help providers look at your affordability levels and the strength of your business plan.
  • The business plan must include how you’re planning to spend the money you borrow, and how you’ll make the repayments.
  • You may also need to provide business bank statements and your balance sheet to show assets and liabilities, so having that documentation ready will help prevent delays.
  • Then you will need to follow the specific application process of the loan or finance you are looking to secure, including going through the relevant eligibility checks.

Start Up Loans FAQs

What is a start up business loan?

Start up business loans are a form of lending designed to help you fund your new business. They come in all shapes and sizes, from government-backed start up loans that are structured as personal loans to business loans from traditional lenders. It is important to do your research and make sure you are comfortable with the terms of lending before applying for a start up business loan.

What is the difference between a start up business loan and a grant?

A small business grant is funding for business use that doesn’t have to be paid back. A grant is usually awarded by an individual or organisation for a specific purpose or project, such as training, expansion or research.

Start up loans must be repaid in full, plus interest and fees, over an agreed term.