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A Guide to Business Loan Interest Rates
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Competitive Business Loan Rates
A business loan can provide your business with a quick injection of cash when you need it most, but it's important to find the best business loan interest rate.
We understand that every business is susceptible to periods of financial difficulty, but we believe that this should never impact the growth or success of your business. Whether you need to cover unexpected costs or are planning a large-scale expansion project, we can help you find the best business loan rates to suit your business requirements.
What are Business Loan Rates?
When you take out a business loan, your business will be required to pay interest on the loan's value. The first step when deciding which loan to take out is to compare the interest rate and any fees the lender charges during and after the loan is repaid. The business loan interest rates and fees are combined to give you an annual percentage rate (APR), which is the total loan cost for each year that you have an outstanding loan balance.
Business Loan Interest Rates Explained
This is the main cost associated with your loan. It's heavily influenced by whether the loan uses a fixed or variable interest rate. A fixed-interest business loan rate will remain the same over the loan period, while a variable interest rate is designed to change in line with the market.
An unsecured loan does not require collateral and usually features a higher rate of interest than secured loans. There are also a variety of factors which will impact the interest rate, such as the credit score of both you and your business, the business plan, average revenue, the industry sector and the reason for the loan.
What Does Business Loan's APR Mean?
APR stands for Annual Percentage Rate. The APR is a calculation of the annual rate charged against money borrowed from a lender and is expressed as a percentage. APR gives you a clear representation of the effective yearly cost of the funds over the loan term.
Common Loan Fees
The fees associated with the loan will depend on the type of finance you require. The most common form of business loans is fixed term loans, which can include fees for the application, creating documents, processing cheques, late payments, prepayment of the loan and returned payments.
Compare Business Loan Rates
Business loan rates can vary widely between lenders, so we provide a comparison service that makes your search quick and easy. We search for the most reliable, competitive and flexible funding providers so you can quickly access the finance your business requires. You can save time and money by comparing the business loan rates available for your specific requirements.
Our comparison service builds up a picture of your business in a few minutes. We ask for details such as what you need the finance for, what type of business you run and how many years of accounts you have. Then we search a range of finance providers, including traditional and challenger banks, to provide you with the best solution to meet your individual business needs. Our comparison tool quickly compares lenders, giving you a comprehensive list of some of the best loan rates available to your business.
The following providers are a selection of those on our panel offering flexible and competitive business loans.
iwoca
iwoca has a great reputation for providing flexible small business loans to help them compete with large-scale competitors. There are no lengthy forms to complete, no long-term commitments and no upfront fees.
This means you benefit from an instant loan decision and complete financial transparency. The company use technology that analyses data, such as your customer feedback and seasonal trends, to gain a fair insight into your trading ability.
They will provide loans to businesses based in the UK operating as sole traders, partnerships or limited companies. iwoca also offers loans unsecured business loans. However, limited companies may require a personal guarantee from a director or shareholder.
They will lend between £1,000 and £500,000, with loan repayment terms from 1 day up to 2 years, but it's possible to repay early without any fees. With interest rates starting at 2%, iwoca could provide your business with competitive business loan rates.
Funding Circle
Funding Circle is an innovative provider of peer-to-peer business loans designed to assist credit-worthy businesses which require additional finance.
They have provided loans to more than 130,000 businesses and offer loan amounts between £10,000 and £500,000, with decisions made in as little as 1 hour.
The flexible monthly repayment terms of between 6 and 72 months can be tailored to suit your individual requirements, with no fees for early repayment. Their competitive business loan rates start at just 7.9% per annum.
Funding Circle is committed to making business loans quick and simple. Apply today to take advantage of their streamlined application process.
Metro Bank
Metro Bank is the first high street bank to open in more than 100 years. They are committed to providing easy access to banking, with stores open 7 days a week and until 8 pm on weekdays.
In most cases, they will lend to businesses with a turnover above £2 million, although there are some exceptions, and you may need some form of security.
Metro Bank offers business loan repayment terms from 1 to 5 years, with APR typically set at 9.60% and loan amounts available from £2,000 to £25,000, making them a great option for businesses.
Fleximize
Fleximize provides flexible loans to UK-based limited companies and LLPs, as well as non-limited partnerships with at least four partners. Their fast and flexible loans are available in just 24 hours, with a personal service from a dedicated account manager at every step.
Through unsecured and secured loan options, you can borrow between £5,000 and £500,000 with repayment terms of between 3 and 12 months. To be eligible for a Fleximize business loan, you will need a monthly turnover of at least £5,000 and have been actively trading for a minimum of six months.
Their competitive business loan rates start at just 0.9% per month, with no extra charges for arrangement or early repayment. You can also take advantage of repayment holidays or additional loan top-ups.
These lenders are examples of some of those included in our panel of lenders. By comparing the best business loan rates with us, we can help you secure the finance your business needs at competitive rates.
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