Recommended by the government’s development bank, which helps SMEs get finance
Best Business Loans for Small Businesses
Discover some of the best business loans for small businesses in the UK. Compare lenders and leading flexible financing options.
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Compare some of the best business loans for small businesses using the Funding Options lending panel
What is a Business Loan?
A business loan is a type of finance that helps companies access the funds they need for growth, stability, or day-to-day operations. In simple terms, it’s when a bank, lender, or alternative finance provider lends money to a business, which is then repaid over time with interest.
The best business loans for small businesses and SMEs in the UK come in many forms — including unsecured loans, secured loans, startup loans, and revolving credit facilities. The right option will depend on your trading history, financial profile, and whether you can provide security.
By comparing the best banks for small business loans and exploring an SME business loan comparison UK, startups and sole traders can find tailored business financing options for SME's — whether it’s working capital, expansion funding, refinancing, or cash flow support.
Benefits of Taking Out a Business Loan
The best business loans for small businesses and SMEs in the UK provide essential funding to manage cash flow, invest in growth, or stabilise operations. By exploring options through the best banks for small business loans or using an SME business loan comparison UK, startups, sole traders, and growing companies can find the right solution. Here are the key advantages of accessing tailored business financing options for SMEs:
Access to Working Capital
Cover day-to-day expenses, payroll, or stock purchases during quieter trading periods with a flexible small business loan.
Support for Growth
Use loan funding to expand premises, hire staff, or launch marketing campaigns to scale your business.
Flexible Use of Funds
Apply capital to equipment, vehicles, marketing, refinancing, or other business needs with the best SME business loans.
Build Business Credit
On-time repayments can strengthen your credit profile, making it easier to secure future funding from the best banks for small business loans.
Variety of Options
From secured and unsecured loans to startup and revolving credit facilities, an SME loan comparison UK helps you find the best fit.
Quick Access to Funds
Many business financing options for SMEs offer fast approval, giving small businesses access to capital when it’s needed most.
About Funding Options
Funding Options is our trusted UK partner that helps businesses access the best business loans for small businesses and SMEs. With one simple application, their Funding Cloud technology matches your profile to over 120+ lenders — returning tailored results in minutes without affecting your credit score.
Whether you’re comparing the best banks for small business loans, exploring an SME business loan comparison UK, or seeking flexible business financing options for SMEs, Funding Options makes the process simple. Their panel covers a wide range of funding, including unsecured and secured loans, revolving credit, invoice finance, merchant cash advances, bridging loans, and commercial property finance.
With Funding Options, startups, sole traders, and SMEs can quickly find the right business loan to manage cash flow, support growth, or launch new projects.
How to compare the best business loans for small businesses
StartupDeals.co.uk has partnered with Funding Options to help you compare the best business loans for small businesses and SMEs in the UK. With one simple application, their Funding Cloud technology reviews your profile and matches you with over 120+ lenders — including the best banks for small business loans and specialist providers.This makes it easy to run an SME business loan comparison UK, returning tailored business financing options for SMEs covering working capital, growth, and cash flow. The process is free, takes only minutes, and initial checks will not affect your credit score.
Tell us about your business
Share how much you need, what it’s for, and key details so we can compare business loans matched to your profile.
Compare quotes instantly
Funding Options compare your details against 120+ lenders so you can see tailored finance quotes in seconds.
Apply and get your funding
Apply for finance and initial checks won’t affect your credit score. Receive funds into your account.
Choosing the Best Business Loan Type
When exploring some of the best business loans in the UK, it’s important to consider your goals, cash flow, and the security you can provide. These factors will determine which loan type may be the most suitable for your business. Use the options below to compare different loan types and discover a wider range of business finance solutions.
Unsecured Business Loans
Borrow without collateral. Quick decisions; may require a personal guarantee.
Secured Business Loans
Backed by assets for lower rates and larger amounts.
Working Capital / Short-Term Finance
Cover day-to-day costs and short cash-flow gaps.
Revolving Credit Facility
Flexible line of credit — pay interest only on what you use.
Asset Finance
Hire purchase or leasing for vehicles, machinery and equipment.
Invoice Finance
Release cash tied up in invoices (factoring & discounting).
Merchant Cash Advance
Repay via a % of future card sales — flexible with turnover.
Commercial Property Finance
Commercial mortgages & development finance.
Bridging Loans
Short-term funding to bridge a purchase, sale or refinance.
Growth Guarantee Scheme
Government-backed lending via accredited providers.
Bad-Credit Business Loans
Options for thinner files or weaker credit profiles.
Startup Business Loans
Funding to launch or grow a new business—often unsecured, with flexible criteria for early-stage companies.
Who Can Apply for a Business Loan in the UK?
Eligibility for the best business loans for small businesses and SMEs in the UK depends on your business type, stage, and financial circumstances. While criteria vary across lenders — from the best banks for small business loans to alternative providers — most will assess factors such as trading history, revenue, and credit profile. Running an SME business loan comparison UK can help startups, sole traders, and growing companies identify tailored business financing options for SMEs that fit their needs.
- Business types
- Sole traders, partnerships/LLPs, limited companies, and in some cases nonprofits or social enterprises may be eligible.
- Stage of business
- Trading 6–24+ months: Wider choice of lenders and often sharper pricing.
- New/pre-revenue: Fewer options, usually smaller amounts, but some startup-focused loans are available.
- Financial profile
- Lenders look at cash flow, debt levels, and bank history. A weaker credit profile isn’t always a rejection, but it may affect available options or pricing.
- Directors & owners
- Most lenders require UK residency checks, ID verification, and credit checks on directors or major shareholders. Personal guarantees are common, particularly for unsecured loans.
- Security & guarantees
- Unsecured: Quicker, simpler, and often require a personal guarantee.
- Secured: Backed by assets (property, vehicles, receivables, equipment), allowing larger amounts and lower rates, but assets may be at risk if repayments aren’t met.
- Use of funds
- Loans can support working capital, hiring, equipment/vehicles, marketing, refinancing, or consolidation. Some restricted uses may apply depending on the lender.
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FAQs: Business Loans (UK)
What is a business loan and how does it work?
A business loan is funding provided by a bank or lender to a company, repaid over an agreed term with interest. The best business loans for small businesses can cover working capital, expansion, or cash flow support.
Why should small businesses and SMEs consider taking out a business loan?
A loan can help small businesses manage cash flow, invest in new equipment, hire staff, or fund growth. Many business financing options for SMEs are designed to provide flexibility and support at every stage of growth.
Who can apply for the best business loans for small businesses in the UK?
Eligibility depends on your trading history, turnover, and credit profile. Sole traders, limited companies, and partnerships can apply for the best business loans for SMEs, provided they meet lender requirements.
What is meant by the term “best business loans for SME's”?
The best business loans for SMEs are those offering competitive rates, flexible terms, and tailored funding. These loans are designed for startups, sole traders, and small businesses looking to access affordable finance.
Which banks are considered among the best banks for small business loans?
Some of the best banks for small business loans in the UK include high-street names like Barclays, Lloyds, HSBC, and NatWest. Each is often considered a contender for the title of the best bank for small business loans, offering tailored products for SMEs. Alongside these, digital banks and alternative lenders provide faster, more flexible options to suit modern business needs.
Who are some of the top alternative lenders for SME business loans in the UK?
Alternative providers include Funding Options, Tide, iwoca, and Funding Circle. These lenders specialise in quick, flexible business financing options for SMEs, often with less paperwork than traditional banks.
How can I run an SME business loan comparison UK to find the right option?
Using a platform like Funding Options allows you to run an SME business loan comparison UK by completing one application. Your profile is matched with over 120 lenders, helping you compare banks and alternative providers side by side.
Can sole traders apply for the best business loans for small businesses?
Yes, many lenders provide the best business loans for sole traders, offering unsecured and secured loan options. These can be used for working capital, cash flow, or business expansion.
Do I need good credit to access the best SME business loans?
Not always. While strong credit helps secure the best business loan rates, some lenders also offer options for businesses with weaker credit profiles. A business loan comparison UK helps identify the most suitable lenders.
What documents are usually required to apply for a small business loan in the UK?
Most lenders will request proof of ID, business bank statements, tax returns, and financial accounts. The exact requirements vary depending on whether you’re applying through the best banks for small business loans or an alternative lender.
How quickly can I access funding once my SME loan is approved?
Approval times vary, but many business financing options for SMEs offer same-day or next-day funding. Banks may take longer, but alternative lenders often release funds within 24–48 hours.
What interest rates should I expect when applying for the best banks for small business loans?
Rates depend on the lender, loan type, and your credit profile. High-street banks typically offer lower rates, while alternative lenders provide flexibility with slightly higher costs. Comparing the best banks for small business loans ensures you find the most competitive deal.
Are government-backed business financing options still available for UK SMEs?
Are government-backed business financing options still available for UK SMEs?
Yes, some government-backed schemes and guarantees remain available for UK SMEs. These can complement traditional lending and may reduce risk for banks, making it easier to access the best business loans for small businesses.
FAQs: About Funding Options
Is Funding Options a lender or a broker?
Funding Options is a broker, not a direct lender. They connect you with over 120 UK lenders, including the best banks for small business loans and alternative providers.
Does using Funding Options affect my credit score?
No, running an application through Funding Options won’t affect your credit score. They use soft checks to match you with tailored business financing options for SMEs.
How does Funding Options match my business to lenders?
Their Funding Cloud technology reviews your business profile and runs an SME business loan comparison UK, finding the most suitable lenders for startups, sole traders, and small businesses.
Are there any fees for using Funding Options?
No — using Funding Options is free for businesses. You can compare the best business loans for small businesses at no cost, with transparent rates and terms.
Can small businesses and startups use Funding Options?
Yes. Both small businesses and startups can apply for funding through Funding Options. The platform offers access to startup loans, unsecured business loans, and a wide range of SME business loan options, helping companies of all sizes secure tailored finance.
How fast can Funding Options help me secure funding?
Many lenders on the platform offer quick decisions, with some business loans for SMEs approved and funded within 24–48 hours.
What loan types can I compare through Funding Options?
You can compare secured and unsecured loans, startup loans, revolving credit, invoice finance, merchant cash advances, and more — all part of their business financing options for SMEs.
Is Funding Options safe to use?
Yes — Funding Options is an FCA-regulated and works with trusted lenders. It’s a secure way to explore and compare the best business loans in the UK.
FAQs: About Startup Deals
Do StartupDeals provide business loans directly?
No — StartupDeals does not lend money directly. We work as an introducer partner with Funding Options, who connect UK businesses to more than 120 lenders through their regulated platform.
Is StartupDeals paid by Funding Options?
Yes — if you are successfully matched with a lender and take out finance, StartupDeals may receive a commission from Funding Options. This comes at no extra cost to you as the customer.
Can I trust StartupDeals when applying for a business loan?
Yes — StartupDeals is a trusted affiliate partner of Funding Options. Funding Options is FCA-regulated, and all loan applications are handled securely by them, ensuring compliance and transparency.
Why does StartupDeals recommend Funding Options?
At StartupDeals, our goal is to help startups, sole traders, and SMEs access the tools and services they need to grow. We recommend Funding Options because they provide access to a wide network of over 120 UK lenders — from high street banks to specialist and alternative finance providers. This means that instead of applying to lenders one by one, businesses can complete a single application and quickly see tailored funding options side by side.
Funding Options also uses secure technology to match businesses with lenders most suited to their profile, making the process faster and more efficient. For startups, this can be particularly valuable, as many lenders on the platform specialise in supporting early-stage businesses.
By partnering with Funding Options, we can introduce our audience to a trusted, FCA-regulated broker where they can explore some of the best business loan options in the UK, compare rates and terms, and find funding that may fit their circumstances — all in one place.
Does StartupDeals decide if my business loan is approved?
No — StartupDeals does not make lending decisions. All applications are assessed by Funding Options and their panel of lenders. Approval depends entirely on the lender’s criteria.
Is StartupDeals regulated to provide credit?
StartupDeals does not provide credit directly and is not a lender. We act as an introducer to Funding Options, who are FCA-regulated and work only with authorised UK lenders.
Will it cost me extra to use StartupDeals?
No — you won’t pay any additional fees by applying through StartupDeals. If you proceed with a loan, StartupDeals may receive a commission from Funding Options, but this does not affect the cost of your finance.
Who handles my data if I apply for a loan?
Your loan application and personal data are handled securely by Funding Options, not StartupDeals. They use regulated systems and strict data protection measures to keep your information safe.
Does StartupDeals provide financial advice?
No — StartupDeals does not provide personalised financial or lending advice. We introduce businesses to Funding Options so they can compare loan options. All content on StartupDeals.co.uk is created to be impartial and informative. It is designed to help startups and SMEs explore tools, services, and funding options available in the UK. The information is not intended as financial advice. For tailored guidance, you should seek advice from a qualified financial professional.
Disclaimer: The content on this website is intended for informational purposes only and should not be construed as legal, financial, or professional advice. While we strive to ensure that the information is accurate and up-to-date at the time of publication, please be aware that regulations and circumstances may change. We recommend consulting with a qualified professional for personalised guidance specific to your situation. Additionally, some links on this website may be affiliate links, meaning we may earn a commission if you make a purchase through those links. Please ensure you read and understand all terms and conditions before making any decisions.