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Business Loans Guide

Business Loan Rates

A guide to helping you understand business loan rates

Competitive business loan rates

We understand that every business is susceptible to periods of financial difficulty, but we believe that this should never impact the growth or success of your business. There are always a variety of loans available, which can provide you with excellent business loan rates and a quick injection of cash when you need it most.

Whether you simply need to cover unexpected costs, or are planning a large-scale expansion project, we can help you find the best business loan rates which suit your needs.

With so many options available for business finance it can often seem difficult and confusing, with businesses not knowing exactly where to turn.

What are business loan rates?

When you take out a business loan, in almost every situation you will be required to pay interest on the value of the loan. The first step when deciding which loan to take is to compare the interest rate and any fees which the lender charges, both during and after the loan is repaid. The interest rate and fees are combined to give you an annual percentage rate (APR), which is the total cost of the loan for each year that you have an outstanding balance.

Business Interest rates explained

This is the main cost associated with your loan and it is heavily influenced by whether the loan uses a fixed or variable interest rate. A fixed interest business loan rate will remain the same over the loan period, while a variable interest rate is designed to change in line with the market.

An unsecured loan does not require collateral, so will usually involve paying a higher rate of interest than secured loans. There are also a variety of factors which will impact the interest rate, such as the credit score of both you and your business, the business plan, average revenue, industry sector and the reason for the loan.

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What does APR mean?

APR stands for “Annual Percentage Rate”. You will often hear annual percentage rate being referred to as “APR”. The APR is a calculation of the annual rate charged against money borrowed from a lender and is expressed as a percentage. APR gives you a clear representation of the effective yearly cost of the funds over the term of the loan.

Common loan fees

The fees associated with the loan will depend on the type of finance you require. The most common form of business loans are fixed term loans, which can include fees for the application, creating documents, processing cheques, late payments, prepayment of the loan and returned payments.

A comparison tool designed for business loan rates

Business loan rates can vary widely between lenders, so we provide a useful comparison tool to make your search quick and easy. We search the most reliable, competitive and flexible funding providers, so that you have quick access to the finance you require. By making it easy to compare the business loan rates available for your specific requirements, you will save both time and money.

The first step is to use our Finance Finder tool, which is designed to quickly build up a picture of your business. It will only take a few minutes and you will be asked details such as what you need the finance for, what type of business you run and how many years of accounts you have.

Our tool searches everything from traditional banks to alternative lenders, so we can provide you with the best solution for your business needs. The comparison tool will quickly assess the best lenders to give you a comprehensive list of the best offers to suit your individual requirements.

The following are examples of providers on our panel which offer flexible and competitive business loans.

iwoca

iwoca have a great reputation for providing flexible small business loans to help them compete with large scale competitors. There are no lengthy forms to complete, no long-term commitments and no upfront fees.

This means you benefit from an instant loan decision and complete financial transparency. The company use technology which analyses data such as your customer feedback and seasonal trends, to gain a fair insight into your trading ability.

They will provide loans to businesses based in the UK which are operating as sole traders, partnerships or limited companies. The loans offered are unsecured, however for limited companies they will require a personal guarantee from the one of the directors or shareholders.

They will lend between £1,000 and £150,000, but for start-up companies this is capped at £10,000. It is worth bearing in mind that the usual credit limit will be equal to roughly one month of typical business revenue.

The loan will need to be paid within 12 months, but it is possible to reduce the business loan rates by repaying early. With interest rates of between 2% and 6% and no extra fees, iwoca could provide you with competitive business loan rates.

Funding Circle

Funding Circle are innovative providers of peer to peer business loans, designed to assist credit worthy businesses which require additional finance.

There are currently over 79,000 individual investors, which have provided loans to more than 46,000 businesses across the UK since 2010. They can offer unsecured loans of between £10,000 and £1,000,000 with decisions made in as little as 5 hours.

The flexible repayment terms of 6 months to 5 years can be tailored to suit your individual requirements, with no fees for early repayment. Their competitive business loan rates start at just 1.9% per annum, so you will soon have the loan your business needs at a brilliant rate.

Funding Circle are committed to making business loans quick and simple, so you can take advantage of their streamlined application process.

Metro Bank

Metro Bank are the first high street bank to open in more than 100 years. They are committed to providing easy to access banking, with stores open 7 days a week and until 8pm on weekdays.

To apply for a loan, you will need to have a business bank account with Metro Bank, but this is simple to open, and no appointment is needed. In most cases they will lend to businesses with a turnover above £2 million, although there are some exceptions and they are likely to need some form of security.

Their loans are available from 1 year up to 30 years, which means they are a great option for businesses looking for a long-term repayment plan. If you are borrowing below £25,000 the loan term will be between 1 and 5 years, with APR typically set at 10%.

For businesses looking to borrow more than £25,000, the interest rate is tailored to each loan and there are arrangement fees involved up to a maximum of 1.75% of the loan amount.

Fleximize

Fleximize provide flexible loans to limited companies and LLPs based in the UK. Their fast and flexible loans are available in just 48 hours, with a personal service from a dedicated account manager at every step.

Through unsecured and secured loan options you can borrow up to £500,000. To be eligible for a Fleximize business loan you will need a turnover every month of at least £5,000 and have been trading actively for a minimum of six months.

Their competitive business loan rates start at just 1.5% per month, with no extra charges for arrangement or early repayment. If your business is able to repay early, you will only be required to pay interest charges based on the loan duration. As one of the most flexible providers of business loans, you can take advantage of repayment holidays or additional loan top-ups.

These lenders are examples of some of those included in our panel of lenders. By comparing the best business loan rates available from high street banks, independent lenders and even peer to peer lenders, we can put you in touch with the finance your business needs at competitive rates.

Our comparison tools are designed to be quick and simple to use, so you can quickly compare business loan rates. If you would like to find out more about current business loan rates, please contact our team today.

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