5 Types of Business Loans Available in the UK

Business loans can be an effective financial tool for certain types of businesses. Nevertheless, if you are not careful enough, borrowing can end up costing you much more than you initially expected. Fortunately, there are a number of ways to secure funding for your business in the UK. Here are 5 of the most popular types of business loans available.

Interest rates on business loans vary by credit score

The interest rates on business loans vary according to your credit score and the type of lender you choose. For instance, lenders that focus on small businesses may be more flexible in their lending practices, but you may need to provide more documentation or put up collateral in order to qualify. However, if you improve your credit score and maintain a good credit history, you can get lower interest rates.

Different business loan lenders have different interest rates and fees, so you should shop around before making a final decision. Typically, business loans from banks have lower interest rates than alternative lenders because they tend to offer larger loans. However, bank loans often have stricter qualifications than most alternative lenders.

Small business grants

Access to funding is often a barrier for new businesses, particularly those seeking to scale up. Fortunately, small business grants in the UK are available to meet many different needs. This guide highlights some of the best providers and explains how to apply for them. It also highlights where to find more information.

There are a variety of different small business grants available in the UK, including the New Enterprise Allowance, which is aimed at fostering small business creation. It is available to anyone over the age of 18 who has a good business idea. Additionally, Universal Credit is aimed at helping job-seekers and aspiring entrepreneurs who are not earning enough to cover living expenses.

Small business grants are often provided by the government and other organizations. Some, such as R&D tax reliefs, help companies that are innovating in certain fields. These grants can reduce a company’s tax bill and may cover wages and project materials. You can also check with your local authority for information on grants available to your business.

Virgin’s StartUpLoan

Virgin’s StartUpLoan business loans are ideal for start-up businesses and existing ones, offering a low interest rate and no set up or early repayment penalties. A financial consultant can help you choose the right funding scheme and boost your chances of approval. An accountant can also help you calculate your repayment capacity and determine your ability to pay back the loan.

Virgin StartUp is committed to supporting more women entrepreneurs. It has a 50:50 gender pledge and handpicks women-founder mentors to help female founders succeed. It provides double the funding of the national average for female-founded businesses and offers practical advice from successful women-founded companies. Virgin StartUp also looks for collaborations with startup ecosystem organizations to support female entrepreneurs.


HSBC Business Loans UK provides loans for small businesses. These loans have a low interest rate and are available up to PS25,000. The loans are not subject to a credit check and HSBC takes into account a number of different factors when deciding whether or not to approve your application. These include your business plan, cash flow forecasts, and historical trading figures.

HSBC’s small business loans can be repaid over one, three, or five years. If you have an existing HSBC business current account, you can repay your small business loan on a monthly or quarterly basis, up to a maximum of 10 years. You can also apply for asset finance and hire purchase, to purchase new equipment and IT hardware.


Whether you’re planning a major purchase or are just looking for a personal loan, you should first check your eligibility. You need to make sure you can afford the monthly payments. If you can’t, you can request an early repayment holiday. You can also extend the loan term. Personal loans are flexible and can be used for a wide range of purposes. They cannot, however, be used for speculative purchases.

A business current account from Lloyds Bank allows you to hold cash and electronic payments. This account is available to sole traders and small businesses. Withdrawals and deposits must be made within agreed limits. You may be required to provide security to open a current account.