Compare business loans
Written by Mark Hagan, Managing Director · Reviewed by Jamie Grimshaw, Chartered Banker
Last reviewed: August 2026
Comparing business loans is the best way to ensure you're getting the right deal for your business. With dozens of lenders in the UK market — from high-street banks to specialist online providers — rates, fees, and eligibility criteria vary widely.
In this guide, you'll learn how to compare business loans effectively, what factors to consider, and how to find the best deal for your circumstances.
How to compare business loans
When comparing business loans, it's important to look beyond the headline interest rate. The total cost of borrowing depends on several factors:
- Interest rate (APR) — the annual percentage rate, which includes interest and some fees. A lower APR means lower overall borrowing costs.
- Loan amount — check the lender's minimum and maximum loan amounts.
- Repayment term — longer terms mean lower monthly payments but more interest paid overall.
- Fees — arrangement fees, valuation fees, legal fees, and early repayment charges.
- Security requirements — whether the loan is secured or unsecured.
- Speed of funding — how quickly the lender can release funds.
- Eligibility criteria — minimum trading history, turnover, and credit requirements.
Secured vs unsecured business loans
Secured loans require an asset — such as property or equipment — as security. They typically offer lower interest rates and higher borrowing limits, but the asset is at risk if you can't repay.
Unsecured loans don't require asset security but usually carry higher rates and lower limits. Some lenders may require a personal guarantee. See our guide to unsecured business loans for more detail.
What affects business loan rates?
- Trading history — established businesses typically qualify for better rates.
- Credit profile — a strong credit history signals lower risk to lenders.
- Loan type — secured loans generally offer lower rates than unsecured loans.
- Loan amount and term — larger loans or longer terms may carry different rates.
- Lender type — high-street banks, challenger banks, and specialist lenders all price differently.
- Base rate — variable-rate loans are influenced by the Bank of England base rate.
Fees to watch out for
- Arrangement fees — typically 1–3% of the loan amount, charged for setting up the loan.
- Valuation fees — for secured loans, the lender may require a property valuation.
- Legal fees — you may need to pay for legal work, particularly for secured loans.
- Early repayment charges — some lenders charge a fee if you pay off the loan early.
- Broker fees — if you use a broker, they may charge a fee for their services.
Compare loan costs
Use our business loan calculator below to estimate the monthly cost of different loan options. Adjust the amount, term, and interest rate to see how different deals compare.
Business loan repayment calculator
Estimated monthly repayment
£1,038
This calculator provides an estimate for illustration only, assuming a fixed-rate loan with equal monthly repayments and no fees. Your actual repayments will depend on the lender, your business circumstances, and any associated fees. Always check the full cost of borrowing before proceeding.
Business loan comparison
Our comparison table shows how different types of business loans stack up against each other:
Compare business loan types
Key differences between the four main types of business loan at a glance. Figures are typical ranges for illustration only.
| Feature | Secured | Unsecured | Short-term | Government-backed |
|---|---|---|---|---|
| Security required | Property, equipment, or stock | None (personal guarantee may apply) | Usually none | None |
| Typical amount | £25k – £5m+ | £1k – £250k | £1k – £100k | Up to £25k (Start Up Loans) |
| Typical term | 1 – 25 years | 1 – 7 years | 3 – 18 months | 1 – 5 years |
| Interest rates | Lower (from ~4%) | Higher (from ~6%) | Highest (from ~10%) | Subsidised (from ~6%) |
| Speed of funding | 2 – 4 weeks | 1 – 2 weeks | 1 – 5 days | 2 – 6 weeks |
| Asset at risk | Yes | No (unless personal guarantee) | No | No |
| Best for | Large purchases / expansion | General purpose funding | Quick cash flow gaps | New / early-stage businesses |
| Mentoring included | No | No | No | Yes |
SecuredTap to view
UnsecuredTap to view
Short-termTap to view
Government-backedTap to view
Figures shown are typical ranges for illustration only and will vary by lender and your business circumstances.
Compare funding types
A side-by-side overview of the main business funding options. Click any column heading to read the full guide.
| Feature | Asset Finance | Business Loans | Invoice Factoring | Merchant Cash Advance | Commercial Mortgages | Bridging Loans | Working Capital |
|---|---|---|---|---|---|---|---|
| Typical amount | £1k – £500k+ | £1k – £500k+ | £10k – £5m+ | £5k – £300k | £50k – £25m+ | £25k – £10m+ | £1k – £500k+ |
| Speed of funding | 1–2 weeks | 1–5 days | 24–48 hours | 1–3 days | 4–8 weeks | 1–2 weeks | 1–3 days |
| Security required | Asset itself | Sometimes | Unpaid invoices | Future card sales | Property | Property | Varies |
| Repayment structure | Fixed monthly | Fixed monthly | Per invoice paid | % of card sales | Fixed monthly | Interest rolled up | Flexible |
| Funds used for | Equipment / vehicles | Any purpose | Cash flow gaps | Any purpose | Property purchase | Property / bridge | Day-to-day costs |
| Best for | Capital purchases | General funding | B2B businesses | Retail / hospitality | Buying premises | Quick property buys | Short-term gaps |
| You own the asset | Sometimes* | N/A | N/A | N/A | Yes | N/A | N/A |
| No early exit penalty | Varies | Sometimes | Usually | Sometimes | Rarely | Usually | Varies |
Asset FinanceTap to view
Business LoansTap to view
Invoice FactoringTap to view
Merchant Cash AdvanceTap to view
Commercial MortgagesTap to view
Bridging LoansTap to view
Working CapitalTap to view
* Ownership depends on the agreement type - e.g. hire purchase vs lease. Figures shown are typical ranges for illustration only and will vary by provider and circumstances.
How do I choose?
- Compare the total cost of borrowing, not just the monthly payment or headline rate.
- Check whether the lender is authorised and regulated by the FCA.
- Consider whether you need a secured or unsecured loan.
- Factor in all fees, not just the interest rate.
- Think about how quickly you need the funds and whether the lender can deliver within your timeframe.
- Read reviews from other businesses and consider seeking independent advice.
How can I learn more?
You may also find our guides on business loans, small business loans, unsecured business loans, and startup business loans helpful.
Want help comparing business loans?
Jamie can compare business loan options across the market on your behalf — free and without obligation.
How funding types compare
Visual comparisons across speed, cost, flexibility and more. The chart highlights the current option.
Strength comparison (score out of 5)
- Asset Finance
- Business Loans
- Invoice Factoring
- Cash Advance
- Comm. Mortgages
- Bridging Loans
- Working Capital
Scores out of 5 - higher is better for the business. The current option is highlighted; others shown faintly for reference.
Typical maximum funding (£ thousands)
Maximum typical amount available. Actual offers depend on your business circumstances and the provider.
Important information
This guide is for general information only and does not constitute financial advice. It's a good idea to seek independent professional advice before entering into any finance agreement.
Compare Your Funding is a trading style of TGL Solutions Limited. TGL Solutions Limited is not authorised by the Financial Conduct Authority and can only complete non-regulated introductions. We may receive a commission when we introduce you to a funder - see our how we make money page.
Related guides
What is asset finance?
Spread the cost of equipment, vehicles, and machinery over time.
Read guideWhat are business loans?
Borrow a lump sum and repay it over a set period with interest.
Read guideSmall business loans
Compare loan options for UK small businesses, from £1,000 to £500,000.
Read guideStartup business loans
Funding options for new UK businesses, including government-backed Start Up Loans.
Read guideNot sure which funding is right for you?
Answer a few simple questions and Mark will personally review your situation and get back to you with impartial guidance.
Jamie Grimshaw
Expert ReviewedCommercial Finance Director · Trading since 2013 · £250m+ secured for UK businesses