How To Get A Small Business Loan + What To Know

With an unsecured business loan, you can borrow money without putting up your business assets as security for the loan. This tends to be popular with smaller businesses that don’t have lots of collateral readily available to offer as security. Some business loans require security in the form of assets or personal guarantees. A business that doesn’t have assets of sufficient value or can’t provide a personal guarantee may be refused finance.

You must have been in business for at least three years, and you can borrow anything between £50,000 and £500,000. Plus, there’s no upfront fee or repayments to be made in the first 12 months. Small unsecured business loans tend to have higher interest rates and often require a director’s personal guarantee. This guarantee is a legally binding document that makes the business owner personally liable to pay the loan repayments if the business defaults on a payment. The HSBC Small Business Loan – For loans of between £1,000 and £25,000, HSBC offers a variety of funding options.

Our £15bn lending fund could be the cash boost to help you realise your ambitions. Iwoca’s funding allowed us to get on with the job, when otherwise we would have run into a brick wall. For those looking to learn more on the topic, we’ve put together a business health check tool. We’re designed with small businesses in mind, so we’ll just need the basics about your business to make a decision. The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes. You might be thinking about ways you can improve your business’s daily operations for performance and productivity.

If you’ve been trading for over a year, lenders will take into account your business credit score as well as your personal one. Traditional lenders tend to place more onus on the business credit score side of things. Your loan provider should be upfront and honest about all the fees you might encounter as a part of your application. For example, broker fees are charged by brokers for aggregating multiple different offers to your application.

In this case it’s worth considering other funding options like friends and family, crowdfunding, incubators, venture capital, small business grants or switching your business bank account. Check out our rundown of the best business bank accounts open to UK SMEs. Fredericks Foundation Loans – The Fredericks Foundation supports business owners who have been unable to secure other forms of finance. If you’ve been up and running for less than 24 months, you may be able to borrow between £2,500 and £15,000, subject to your credit rating.