Small Business Loans from £5k – £200k

little business loans BirminghamFor small business owners, accessing capital can be one of the biggest challenges. Small business loans can provide the funds needed to start or expand a business, but they can also be difficult to obtain. There are a number of factors that lenders consider when evaluating loan applications, and small businesses often have trouble meeting all of the requirements.

Additionally, the application process can be time-consuming and complex. As a result, many small businesses owners choose to avoid taking out loans altogether. However, there are a number of reasons why small business loans can be beneficial. First of all, they can provide access to the funds needed to grow or expand a business.

Secondly, they can help to build business credit. And finally, they can offer flexible repayment terms that work for your specific situation. If you’re thinking about applying for a small business loan, it’s important to your research and make sure you understand all of the pros and cons.

Taking out a loan is a big decision, but it can be a helpful way to support your small business.

What is a Small Business Loans?

A small business loan offer business owners that are looking to grow and develop their businesses a low-cost way to finance its development. Loans of this type can be used for almost any business purpose, such as boosting working collateral for cash flow, purchasing equipment, recruiting staff.

There are different types of loans available, each with its own purpose and requirements. For example, some loans are used for start-up costs, while others can be used for expansion or equipment purchases. In order to qualify for a loan, businesses must meet certain criteria, such as having a good credit history and demonstrating the ability to repay the loan.

Loans can be either secured or unsecured, meaning that they either require collateral or do not. Interest rates on small business loans are typically lower than those of other types of loans, making them an attractive option for businesses in need of financing.

Are small business loans secured or unsecured?

Most small business loans are either secured or unsecured. A secured loan is one where the borrower pledges some form of collateral, such as a personal residence or business property, to secure the loan. An unsecured loan is one where no collateral is required. Both types of loans have their advantages and disadvantages.

Secured loans tend to have lower interest rates because the lender has less risk. If the borrower defaults on the loan, the lender can seize the collateral and sell it to recoup the loan amount. However, secured loans also require the borrower to put up valuable property as collateral, which can be a risk if the business fails.

Unsecured loans tend to have higher interest rates because they are more risky for the lender. If the borrower defaults on an unsecured loan, the lender has no recourse other than to try to collect the debt through legal channels. However, unsecured loans do not require collateral, so they may be a better option for businesses that do not have any valuable property to offer as collateral.

What are the different types of business loans?

There are two main types of small business loans, these are: secured and unsecured. Within these categories there are a number of different types of loans and financing options exist for UK SMEs these are:

  • Short-term loans
  • Merchant cash advance
  • Invoice finance
  • Working capital loans
  • Asset finance & refinance
  • Peer-to-peer loans
  • Revolving credit facilities

A small business loan can provide a much-needed injection of cash to help grow your company. But what kind of loan is best for your business? Let’s take a look at unsecured and secured business loans to see which one might be right for you.

With an unsecured loan, you can borrow money without putting up your business assets as collateral. This type of loan is popular with smaller businesses that don’t have a lot of assets to offer as security. However, because there is no collateral involved, lenders tend to charge higher interest rates for unsecured loans.

A secured loan, on the other hand, is a loan that is backed by collateral. In the event that your company defaults on the loan, the lender will have legal authority over the agreed-upon asset until the debt is paid in full. Secured loans typically have lower interest rates than unsecured loans, but they do require that you put up your business assets as collateral.

So which type of loan is right for your business? If you have strong credit and don’t want to put up your assets as collateral, an unsecured loan might be a good option. However, if you’re willing to offer up some collateral in exchange for a lower interest rate, a secured loan could be the way to go. Ultimately, the decision comes down to what makes the most financial sense for your company.

What are the best small business loans?

When it comes to finding the best small business loan, there are a number of factors to consider. The first is what you need the funding for. Make sure you have a clear idea of the amount you need and what you will use it for.

You should also consider your ability to make repayments. Shop around for the best interest rates and terms that fit your budget and business model. There is no single ‘best’ small business loan, but by doing your research and being clear about your needs, you can find the funding that works best for you.

What is the difference between a business loan and a personal loan?

A business loan is a loan that is given to a business instead of to an individual. The purpose of the loan is so that the business can use it for business purposes. Some examples of what a business loan can be used for include expanding the business, or buying new stock or equipment.

A personal loan differs from a business loan in that it is given to an individual instead of to a business. The purpose of a personal loan is so that the individual can use it for personal purposes. Lenders usually impose restrictions on personal loans that state they can’t be used for business purposes and vice versa.

How does a small business loan work?

A small business loan is no different from any other type of business finance. The credit provider gives you money upfront, and then you repay it, including any interest and fees over an agreed timeframe. The term ‘small business loan’ is used to describe a wide variety of funding options, including unsecured business loans, secured business loans, merchant cash advances, peer-to-peer business loans and invoice financing.

Each type of loan can vary in structure and repayment mechanism. For example, some allow you to draw down funds as and when you need it. These are called lines of credit or revolving credit facilities. They are much more flexible and work similarly to a business credit card, paying interest only when you use it.

Some small business loans require collateral, such as your home or another property, which the lender can claim if you default on the loan repayments. Secured loans tend to have lower interest rates than unsecured loans because there is less risk for the lender.

However, this also means that they are more difficult to obtain if you don’t have sufficient collateral.

How long does a small business loan last?

The term length of your small business loan will depend on the specific SME funding product that you choose for your firm. Small business loans tend to be taken out for a shorter period of time. However, there are many factors that come into this, including:

  • How much you want to borrow,
  • The type of business loan you require,
  • The interest rate and how quickly you can comfortably make repayments.

There are also government initiatives in place, such as the Enterprise Finance Guarantee scheme, which supports businesses who might find it difficult to access finance from traditional lenders. This scheme offers loans of up to £1.2 million with repayment terms of up to 10 years.

Although the scheme is not currently accepting new applications, it is worth considering for the future. The bottom line is that the term length of your small business loan will depend on a number of factors, so it is important to shop around and find the right product for your needs.

What are the rates and fees for small business loans?

The rates and fees for small business loans vary significantly depending on the lender and type of funding product they offer. The rates can also be affected by your business activity, such as performance, industry sector and credit history. Although interest rates are usually fixed, they can be variable, meaning it can go up or down at any time during the loan term.

All fees, charges and repayment terms will be made clear and agreed at the outset of the loan, so you will know how much it will cost. As a result, it is important to compare different lenders and products before deciding on a loan for your small business.

Is a small business loan right for me?

Getting a business loan from a traditional high street bank can be challenging if you haven’t been trading for long or have a bad credit history. If you’re experiencing such complications, it’s worth knowing that banks aren’t your only option. Many alternative finance companies and non-bank lenders specialise in providing SME loans to business owners of small companies.

A short-term business loan could offer you some flexibility, especially if you’re facing an unexpected situation or seasonal fluctuations. Trying to obtain funds from a high street bank can be a frustrating and time-consuming process. However, with the help of an alternative lender, you could get the financing you need in a matter of days.

These lenders often have much more flexible eligibility criteria, meaning that even if you have a less-than-perfect credit history, you may still be able to qualify for a loan. So, if you’re looking for an easier and faster way to get funding for your small business, consider turning to an alternative lender.

Can I get a small business loan with bad credit?

Having bad credit does not stop you gaining a small business loan, if your credit rating is not the best, a number of lenders have tailored their products to suit specific needs.

If you are a business owner that is currently undergoing some financial difficulties, you may well be wondering whether or not you are able to access business funds with a poor credit history. The plain and simple answer is ‘yes’, you most likely will still be able to apply for these types of loans with bad credit, due to the fact that it is a form of unsecured funding.

You can apply online for a business loan via our online application process. You will need to complete a quick online application to provide some basic information about yourself and about your business. So, with unsecured funding, it turns out that small business loans can still work out for individuals that are looking to make improvements to their business venture or get it out of a spot of financial trouble.

Interest rates are higher if you have a poor credit score as lenders class you as a higher risk. Repayments may also be required to be repaid over a shorter period, this is due to keep costs to a minimum and a higher APR.

One of the fastest ways to improve your credit rating or business credit rating is to access your full business credit report. Regardless of your credit history, finding the right product for you is your mission, even if you have a less than perfect credit score.

Do small business loans require a personal guarantee?

When you apply for a small business loan, the lender will often require you to sign a personal guarantee. This guarantee means that you, as the business owner or company director, are legally responsible for making loan payments if your business is unable to.

Personal guarantees are more common when you’re looking for an unsecured loan or if you have bad credit and the lender wants extra assurance before agreeing to lend you money. If you’re asked to sign a personal guarantee, it’s important to understand what you’re agreeing to and make sure you can afford the payments if your business is unable to meet its obligations

What credit score is needed for a small business loan?

There is a lot of confusion surrounding credit scores and small business loans. Specifically, many people believe that there is a magic number that will guarantee approval for a loan. However, the reality is much more complicated. Each lender has their own unique requirements, and your credit score is just one factor that they will consider.

In some cases, a strong business credit score may be enough to offset a low personal score. However, in other cases, the reverse may be true. The bottom line is that there is no surefire way to predict whether or not you will be approved for a small business loan. The best thing you can do is to gather all of the required documents and put together a strong application. With a little luck, you should be able to get the funding you need.

What if I’ve been unsuccessful in securing a business loan in the past?

After being turned down for a business loan, it’s important to take a step back and reassess your financial situation. Make sure that you don’t have any outstanding debt and that your credit score is as high as it can be.

Once you’ve improved your financials, you should be in a better position to apply for funding. Contact our team if you have any questions or concerns about your business. We’re here to help you get the funding you need to grow and succeed.

How can I use a small business loan?

A small business loan can be used for a variety of purposes. If you need to invest in stock or hire additional staff, a small business loan can give you the financial boost you need. Loans can also be used to cover unexpected costs or fluctuations in demand caused by seasonality.

By using a small business loan, you can continue to invest in your business and grow your operations. Ultimately, a small business loan can help you to achieve your long-term goals and objectives.

What are the advantages of small business loans?

Small business loans come with a number of advantages, it is essential to consider every aspect of the loan agreement before you sign on the dotted line.

  • Growth potential accelerated – Business owners wish to take their company to the next level will be require working capital, this is where small, short term business loan offers an affordable way to meet your goals.
  • No asset security is required – Small business loans usually come unsecured. For larger amounts lenders maybe flexible on lending if  business assets are offered to secure the loan.
  • Keep cash flowing – Cash flow is an important factor of business management. A short-term business loan will allow you the breathing space you need to overcome potential issues.

What are the disadvantages of small business loans?

As with any financial product small business loans also come with a number of disadvantages, these are:

  • The cost of borrowing – is always a consideration when taking out a loan, regardless of the interest rate. With small business loans, it’s important to try to keep the repayment terms as short as possible to minimize these costs. The interest rate on small business loans is usually lower than other types of loans, but that doesn’t mean the cost of borrowing is insignificant. The sooner the loan is repaid, the less it will cost in interest and fees. In addition, keeping the loan term short will free up cash flow more quickly, which can be reinvested back into the business.
  • Higher rates for low credit scores – A credit score is a number that represents your creditworthiness – in other words, how likely you are to repay a loan. The higher your score, the lower the risk you pose to lenders, and the better your chances of being approved for a loan with a favorable interest rate. Conversely, if you have a low credit score, you pose a greater risk to lenders, and you may be required to pay a higher interest rate on your loan.

How much could I borrow?

With a small business loan, you could qualify for a quick, short-term loan from as little as £1000 to £300,000 from one of our trusted direct lenders. A lender may require you to offer assets as security against the loan, depending on the amount you need. Small business loans are usually repaid over a short timeframe, from six months to three years. While you may not envisage any difficulties in paying the loan, you cannot predict the future.

You must ensure securing your asset against the finance arrangement is a risk you are willing to take. However, with a small business loan, you could have access to the funds you need quickly and easily, giving you the flexibility to respond to opportunities or challenges as they come up. With careful planning and management, a small business loan could help your business to grow and thrive.

Can I repay my business loan early?

Paying off your business loan in advance can save you money in the long run, but some lenders may charge early repayment fees. However, the majority of lenders we work with do not charge any extra costs for paying off your loan early.

This means that you can save money by paying off your loan as soon as possible. If you have the ability to pay off your loan early, we recommend doing so to save on interest charges. Contact us today to learn more about our business loan options and how we can help you save money.

Can I get a small business loan for my startup business?

Starting a business can be an exciting and rewarding experience, but it can also be a little daunting. There are so many things to think about and often, not enough time or money to get everything done. This is where our business startup loans can help.

Whether you’re just starting to plan your business or you’re already up and running, we can provide the funding you need to get your business off the ground. Our UK government-backed startup loans partnership means that we’re best placed to offer a funding solution that will work for you. To find out more about this scheme, click here or use our business startup loans calculator. With our help, you can concentrate on making your business a success.

Are there specific small business loans for women?

The number of female entrepreneurs in the UK has been on the rise in recent years, with more and more women taking the leap into self-employment. This growth is due in part to an increase in access to small business loans for women. Alternative business funding companies and government-backed lenders have dedicated funding available to help women grow their business, whether they are a startup venture or an established small business.

This funding can be used for a variety of purposes, including working capital, expansion costs, or even to cover the cost of new equipment. As more women enter the world of entrepreneurship, it is important that they have access to the resources they need to succeed. With dedicated small business loans for women, they can achieve their goals and reach their full potential.

Can I get a small business loan without collateral?

If you’re a small business owner, you may be wondering if you can get a loan without collateral. The answer is yes – you can get an unsecured business loan. Unsecured loans don’t require collateral, which means you don’t have to put up your home or other assets to secure the loan. Instead, these loans are based on your creditworthiness and ability to repay the loan.

While you may have to pay a higher interest rate for an unsecured loan, it can be a good option if you don’t have any collateral to put up. For more information on unsecured business loans, visit our page on this topic today.

Is my business eligible for a small business loan?

In 2022 the number of small business in the uk has reached over 6 million. limited company directors as well as sole traders have been reluctant to apply for funding in the due to the fear of rejected. Due to the expansion of the alternative lenders in the UK, access to finance is available to limited companies and sole traders. Our missions is to assist and help as many businesses as we can get the funding they need. The following basic eligibility requirements are need to proceed:

  • Your business is officially registered in the UK
  • The business has been trading for a minimum of 6-months
  • A minimum monthly turnover of £5,000
  • The business owner is over the age of 18

Apply for a small business loan

It is so easy and quick to apply for a small business loan, simply follow the following application process and grow your business.  A business loan can be put in place within 5 working days, and the funding placed with your bank account. Any UK based business can apply, let us send a quotation with details about business loans available.

Step 1:

Click to apply for a quick quote. You will be redirected to a page where we will ask for more information about your business, including:

  • The name of your business
  • The number of years you have been trading
  • Your average monthly turnover
  • The amount you are wanting to borrow

Step 2:

The next step involves disclosing your personal details, please be ready to tell us:

  • Your title, first name and surname
  • Position in the business
  • Registered office address if registered in England and Wales
  • Limited company registration number
  • Contact details

Step 3:

Carefully read through the terms and conditions and click ‘get my quote’. From here your application gets reviewed by one of our approved business finance suppliers, who will help find the best lender for you.

Step 4:

Please expect a call and email from one of our dedicated account managers to discuss your loan agreement.

Step 5:

Carefully read through the agreement and sign the relevant documentation ready to return to PDQ Funding. From there you will be able to access the funds in your account in just 24 hours.

Frequently Asked Questions

How to get a small business loan?

To get a small business loan simply go on to our website and check your businesses eligibility and criteria, once you have done this simply complete the online enquiry, once complete a business development manager will talk you though your small business loan application.

What kind of credit score do you need to get a small business loan?

If you or your business does not have a great credit score, do not worry, most lenders look at affordability to repay the loan, this means credit scores are not the most important factor, they ability to make repayments of the loan are.

Is it hard to get approved for a small business loan?

Getting a small business loan is not a hard task, lenders look at credit ratings of directors and affordability, both these factors are responsible to show the lender you are not a risk.

Lee Jones Profile Image
Business Finance Expert at PDQ Funding

Lee Jones is a seasoned Business Finance Specialist with over two decades of invaluable experience in the financial sector. With a keen eye for market trends and a passion for helping businesses thrive, Lee has become a trusted advisor to countless organizations seeking to navigate the complexities of finance.