Many start-ups need finance to grow and evolve in that crucial first year. Some banks and lenders will lend to new businesses that are just getting started, and you don’t always have to have a business current account with them to be eligible. If you’re looking for a reliable and affordable source of start-up finance, these are the best start-up loans for new businesses.
Companies are ranked in no particular order.
| Lender | Minimum loan amount | Maximum loan amount | Minimum term |
|---|---|---|---|
| Bank of Scotland | £1,000 | Not stated | 25 years |
| Barclays | £1,000 | £100,000 | 20 years |
| Co-operative Bank | £1,000 | £250,000 | 15 years |
| HSBC | £1,000 | Not stated | 10 years |
| Lloyds Bank | £1,000 | Not stated | 25 years |
| Metro Bank | £2,000 | Not stated | 5 years |
| NatWest | £1,000 | £50,000 | 7 years |
| TSB | £1,000 | £1 million | 10 years |
| Royal Bank of Scotland | £1,000 | £50,000 | 7 years |
| Ulster Bank | £1,000 | £25,000 | 5 years |
| ABC Finance | £500 | £1 million | 5 years |
| Aspire Business Loans | £5,000 | £300,000 | 5 years |
| Cubefunder | £5,000 | £100,000 | 12 months |
| Fleximize | £5,000 | £500,000 | 48 months |
| Rangewell | £1,000 | Not stated | n/a |
| Start Up Loans | n/a | £25,000 | 5 years |
| inFund | £5,000 | £150,000 | 12 months |
1. Bank of Scotland
- Small loans from £1,000 – £25,000 are available.
- Larger loans from £25,000 are available.
- Repay over 1-25 years.
- Fixed and flexible rates available from 7.1% APR representative.
- Monthly repayments.
- No arrangement fees.
- Secured and unsecured available.
- No early repayment costs.
- Capital repayment holidays may be offered for up to 2 years.
- Open to new and existing customers.
Website: Bank of Scotland Business Loans
Read the full Bank of Scotland Business Finance review.
2. Barclays
- Loans of £1,000 to £100,000 are available unsecured.
- 8.9% APR representative on loans up to £25,000.
- Fixed or variable interest rates are available.
- Secured and unsecured loan options.
- Choice of repayment terms up to 20 years.
- 6-month repayment holiday is available at the start of your loan (interest will still accrue).
- A personalised quote will be provided.
- No credit footprint
- Available to existing and new customers.
- Apply online.
Website: Barclays Business Loans
Read the full Barclays Business Finance review.
3. Co-operative Bank
- Borrow from £1,000 to £250,000 secured.
- Loans over £250,000 are available but you need to discuss this with a relationship manager.
- The minimum loan amount for sole traders, partnerships of 2 or 3 and unincorporated organisations is £25,020.
- All other organisations can apply for loans from £1,000.
- Variable-rate loan.
- Interest is applied monthly.
- Repayment over 1 to 15 years.
- An arrangement fee applies of 1% of the loan amount.
- Up to 70% loan funding against asset purchases.
- Only open to their business current account customers.
Website: Co-operative Bank Business Loans
Read the full Co-operative Bank Business Finance review.
4. HSBC
- Fixed loans from £1,000 to £25,000.
- Flexible loans from £25,001+.
- Choice of fixed or variable rate loans.
- 7.1% APR Representative on fixed loans.
- Repayment from 12 months to 20 years.
- Interest applied monthly or quarterly.
- Defer your first repayment for 3 or 6 months, or choose a January repayment holiday.
- Capital repayment holidays up to 24 months may be available.
- HSBC current account not required.
- Use the eligibility checker to find out if you can apply.
Website: HSBC Business Loans
Read the full HSBC Business Finance review.
5. Lloyds Bank
- Small secured or unsecured loans from £1,000 to £25,000.
- Larger business loans are available from £25,001.
- Interest rates can be fixed or variable.
- Repay over 1-25 years.
- 7.1% APR Representative (fixed or variable).
- Receive funds within 48 hours of acceptance of the loan application.
- Capital repayment holidays up to two may be available.
- No early repayment costs on some loans.
- Open to new and existing customers.
- A personalised quote will be provided.
Website: Lloyds Bank Business Loans
Read the full Lloyds Bank Business Finance review.
6. Metro Bank
- Small business loans from £2,000 to £25,000.
- Larger loans over £25,000.
- Repay over 1 to 5 years.
- Typically 9.6% APR (fixed).
- Zero fees on small loans.
- Larger loans may have a fee of up to 1.75% and other set-up fees may apply.
- Security is likely to be needed.
- Only available to existing customers.
- Loans are generally available to those with over £2 million turnover although exceptions are considered.
- You can only apply in branch which are located in the Midlands and the South of England.
Website: Metro Bank Business Loans
Read the full Metro Bank Business Finance review.
7. NatWest
- Small businesses can borrow from £1,000 up to £50,000.
- Borrow over 1-7 years.
- Up to 10 years available on request.
- Fixed interest rates.
- No arrangement fees.
- No early repayment fees.
- Available to all business customers.
- Also available to new customers.
- Apply online.
- Personal, director or member’s guarantee may be required.
Website: NatWest Business Loans
Read the full NatWest Business Finance review.
8. TSB
- Borrow from £1,000 up to £1,000,000.
- Base rate and fixed-rate loans are available.
- Repay over 1 to 25 years.
- 9.94% APR representative (fixed).
- Available to sole traders, partners and directors.
- An arrangement fee of up to 1.5% applies.
- Open to sole traders and small business owners.
- Secured and unsecured available.
- Capital repayment holidays may be offered.
- Find out more details by calling them on 0345 835 3858.
Website: TSB Business Loans
Read the full TSB Business Finance review.
9. Royal Bank of Scotland
- Loans from £1,000 to £50,000.
- Repay at a fixed rate.
- No arrangement fees.
- No early repayment fees.
- Repayment over 1 to 7 years (10 years available on request).
- All business customers are eligible.
- Also available to new customers.
- Existing customers should contact their Relationship Manager to apply.
- New customers can apply online using their quick and simple application.
- Repayment holidays for 12 months may be available for existing customers.
Website: Royal Bank of Scotland Business Loans
Read the full Royal Bank of Scotland Business Finance review.
10. Ulster Bank
- Borrow £1,000 to £25,000.
- Repay over 1 to 5 years.
- An arrangement fee of £150 applies for loans up to £15,000.
- Loans over £15,000 have an arrangement fee of 1%.
- Flexible interest rates linked to the Ulster Bank base rate.
- Existing Ulster Bank customers could be eligible for a repayment holiday for up to 12 months.
- Online application which takes approx 8 minutes to complete.
- Security may be required.
- Open to sole traders, partnerships and limited companies.
- Businesses must be based in Northern Ireland.
Website: Ulster Bank Business Loans
Read the full Ulster Bank Business Finance review.
11. ABC Finance
- Finance broker, not a direct lender.
- Offers a variety of loans of which some are suitable for start-ups.
- Allows you to compare loans from a variety of lenders.
- Provides support in finding the right loan solution for your business.
- Borrow from £500 to £1 million.
- Rates from 1.9%.
- Repayments over 1 month to 5 years.
- Unsecured and secured loans.
- Personal guarantees may be required.
- Some loans can be completed in 5 days.
Website: ABC Finance Business Loans
Read the full ABC Finance review.
12. Aspire Business Loans
- Finance broker, not a direct lender.
- Search lenders for free with no impact on your credit score.
- Compare a range of different lenders loan products.
- Start-up loans from £5,000 to £300,000.
- Repayment periods from 1 to 5 years.
- Demonstrate at least 6 months of trading history.
- Your business needs a 1-year bank account history to be eligible.
- Apply online.
- Quick and simple loan process.
- Same day decisions are available depending on the lender.
Website: Aspire Business Loans
Read the full Aspire Business Loans Finance review.
13. Cubefunder
- Financing between £5,000 – £100,000.
- Loans designed for small businesses, suitable for businesses that have been trading for at least 3 months.
- Lend to a variety of sectors for a wide range of purposes.
- Unsecured loans.
- Loan terms of 3 to 12 months for new applicants.
- Funds can be received within 48 hours.
- No late payment charges or early repayment fees.
- Flexible repayment options.
- Apply online that can be completed in 2 minutes.
- Their customer service team will contact you to discuss your needs further.
Website: Cubefunder Business Loans
Read the full Cubefunder Business Finance review.
14. Fleximize
- Loans available for businesses trading for 6+ or 12+ months.
- Loans built for SMEs.
- Borrow £5,000 to £500,000.
- Repay over 3-48 months.
- Rates of 0.9-3.9% per month.
- Unsecured and secured loan options.
- Top-ups and repayment holidays are available.
- Repay early and only pay the interest for the time you has the loan.
- Get a decision in 24 hours.
- Offers a personalised service to help match you with the right loan.
Website: Fleximize Business Loans
Read the full Fleximize Business Loans review.
15. Startup Loans
- Part of the Government-backed British Business Bank.
- Open to new businesses or those that have been trading for up to 24 months.
- Borrow up to £25,000.
- Fixed interest rate of 6% per annum.
- Repayment over 1-5 years.
- Includes 12 months of free mentoring.
- Access to a range of templates and guides.
- Support in writing a business plan and cash flow forecasts.
- No set-up or early repayment fees.
- Free courses with The Open University.
Website: Start-up Loans Business Loans
Read the full Start-up Loans Finance review.
16. Rangewell
- Business loan aggregator. Not a direct lender.
- Offers a selection of start-up loans.
- Unsecured loans up to £25,000.
- Secured loans over £250,000.
- Rates from 4.9%.
- Easy online applications.
- Approval waiting times will vary depending on the lender.
- Provides support in finding the most appropriate loan for your business.
- Offers a range of communication methods including phone, email and WhatsApp.
- Can schedule a call with them to discuss your needs.
Website: Rangewell Business Loans
Read the full Rangewell Business Finance review.
17. inFund
- A live multi-drawdown credit facility.
- Access £3,000 to £150,000.
- Repayment terms up to 24 months.
- Fast decisions and funding within 24 hours.
- Interest rates from 12.99% APR.
- Open to small businesses with 6 months’ of accounts.
- Must have an annual turnover of at least £60,000.
Website: inFund Business Loans
Read the full inFund Business Finance review.
How do start-up business loans work?
Business loans work a lot like personal loans. Your business applies for finance to pay for essential business expenses, equipment or for anything that can help you grow, and then repays the amount plus interest over an agreed period. Repayment terms can be short or long-term, giving your business the option to stretch payments out and make them more affordable or clear the loan amount quickly in a few months.
Some start-up business loans will be secured on one of your business’ assets and some might require a personal guarantee too, meaning the loan is secured on your own property.
How much can my start-up business borrow?
How much a new business can borrow depends on the lender and its terms. Some lenders will happily lend to start-ups and have specific loan products tailored to them. A small business in its first year will usually not be able to access as much credit as a larger business with a proven track record and solid credit history, but that doesn’t mean you can’t find a competitive start-up loan. As long as your start-up can prove it’s profitable and creditworthy or provide security, you’ll be able to borrow.
How much will a start-up business loan cost?
Interest rates can be fixed, meaning your repayments are the same every month, or flexible, meaning they can vary. If your loan is fixed, the lender will state upfront how much you have to repay each month and how much that will add up to in total. To find out what the average borrower pays, check the representative annual percentage rate (APR). This isn’t necessarily the rate you’ll get but it’s a good way to estimate the average costs before you apply.
Business loans sometimes have set-up, early repayment, and arrangement fees. The lender will state these fees upfront – always check the FAQs and small print to avoid any surprises.
How long can I borrow money for?
Short term loans are usually repaid within 3 to 12 months. A long term loan will usually be repaid over 5-7 years, but big high street banks often allow longer agreements of 10, 15, or even 25 years. This spreads out the repayments and can make borrowing more affordable for a newer business.
How do I apply for a start-up business loan?
If you find a lender that offers good terms for start-ups, you can usually apply online. This is often quick and convenient with minimal paperwork. You might even be able to check your eligibility and how much you can borrow without affecting your credit score.
Many lenders aim to provide a quick decision within 24 hours, but it might take a few days. It could be necessary to meet in person or have them come out to assess any property you’re using as security.
Some lenders don’t accept direct applications so you’ll need to work with a business finance broker. A broker will find appropriate business loans for your business and make the application on your behalf. This will involve an extra fee but you’ll benefit from their expertise and knowledge of the business loan market.