How to get a business loan,
in six steps
To get a business loan in the UK, work out exactly how much you need and why, check you meet the basic gates (a UK limited company or LLP, usually at least six months’ trading, income going through a business account), gather six months of bank statements and your latest filed accounts, then compare offers by total cost in pounds before any lender runs a full credit search. With the documents ready, many decisions come back the same working day.
No credit check to enquire.
The six steps
The order matters. Most delays, and most needless declines, come from doing step five before step three.
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01 Decide the amount and the purposeAn afternoon
Borrow what the plan needs, not the most you might get. Lenders ask what the money is for, and a clear answer, such as stock for an order or a VAT bill, is easier to lend against than general headroom.
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02 Check the basic gatesTen minutes
Structure, time trading, turnover and homeownership decide which lenders will look at you. Knowing them first stops you applying where you cannot succeed. The real gates.
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03 Gather the documentsAn hour
Six months of business bank statements as PDFs, the latest full filed accounts, management accounts if those are old, and ID for each director. The full list.
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04 Compare the cost in poundsA day
Line up the monthly payment, the total repaid and every fee for each option. A lower rate with a large fee can cost more. Run your own figures.
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05 Apply to the one that fitsMinutes to days
One well-chosen application beats five hopeful ones, each of which may leave a search on your file. Soft checks first, the full search only once you choose.
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06 Accept, sign and get fundedHours to a week
Read the agreement and any personal guarantee, sign online, complete ID checks and the lender pays out. Secured lending adds a valuation and legal work.
What lenders actually look at
Affordability, from the bank statements. The underwriter works out what is left of your income after existing commitments and asks whether the new repayment fits. They read the pattern as much as the totals: regular income, bills that clear, a balance that is not living at its limit.
The filed accounts. Turnover, profit and the balance sheet, and whether they were filed on time. Old accounts are not fatal if the statements show the business has moved on, and management accounts can bridge the gap.
Credit files, company and personal. County Court Judgments and missed payments count, recent ones far more than old ones. Because most unsecured loans to small companies carry a director guarantee, your own file is read alongside the company’s.
What else you owe. Every loan, lease and card the business is paying. A lender that finds borrowing you did not mention will stop and ask, and that costs days.
How long each stage takes
Realistic timings for an unsecured loan to a limited company with its documents ready.
The usual cause of delay is paperwork rather than the lender: a missing month of statements, an unfiled set of accounts, or borrowing not mentioned up front. What actually takes the time.
Three mistakes that turn a yes into a no
Applying in a bad month. Lenders weight the latest statements most, so if you can, apply after a strong quarter rather than in the middle of a slow one. Asking for too much. A request that is large against turnover draws a decline where a smaller one would have been approved, and you can usually come back for more once the first is repaid on time. Leaving something out. Undisclosed borrowing found on the statements ends more applications than a weak year does.
If you trade as a sole trader or a small partnership, lending under £25,000 is regulated consumer credit and is not something we arrange; why the line sits there. Farm businesses of any structure can go through Farmzo.
Do steps two and four in one go: tell us what you need and we will show you who would lend.
Get my optionsCommon questions
What is the easiest type of business loan to get?
The one that matches what you can show. With card takings and thin accounts, revenue-based finance. With unpaid invoices, invoice finance. With two years of good accounts, an ordinary unsecured loan. There is no universally easy loan, only a better or worse fit.
Do I need a deposit for a business loan?
Not for an unsecured working capital loan; you receive the full amount. Asset finance for a machine or vehicle often asks for a deposit, and secured property lending lends a percentage of the value rather than all of it.
Can I get a business loan to start a business?
Not from our panel without at least six months of trading. For people starting out, the British Business Bank’s Start Up Loans programme is designed for exactly that.
Should I ask my own bank first?
It is worth asking if you have a long relationship and good accounts, because a bank may be the cheapest option. Ask early: banks are often slower, and a decline after weeks of waiting leaves little time to try elsewhere.
What happens after a lender makes an offer?
You get the agreement to read and sign, usually online, along with any personal guarantee. The lender checks each director’s identity and confirms the bank account, then pays out. Nothing is binding until you sign.
Start with step two
About a minute, no credit check, and the lenders that would actually look at you.
Get my options