Small business loans
Compare Small
Business Loans
from 130+ Lenders
What we do
Compare Advantage is a free comparison service. Tell us how much your business needs and what it is for, and our partner, FCA-authorised broker Halo Corporate Finance, checks your enquiry against the 130+ lenders on its panel, from high street and challenger banks to specialist small business lenders.
- For limited companies, sole traders and partnerships
- Secured, unsecured and government-backed lenders
- 130+ lenders checked from one enquiry
Prefer to talk? Call 0330 057 7175
- 130+ lendersOn our partner’s panel
- £5k to £1mLoans and asset finance
- One enquiryInstead of one per lender
- FCA-authorised partnerHalo Corporate Finance
- Free to enquireNo obligation to apply
Compare before you apply
Compare small business loans with one enquiry
Small businesses are where lenders disagree most. A high street bank might want two years of accounts and property as security; a challenger bank might lend on one year of trading; a specialist might decide on six months of bank statements. None of them is wrong. They are looking for different customers. The fastest way to find the lenders looking for a business like yours is to check the panel first and apply once.
- 1
Tell us once
Two minutes on the form: how much, what it is for and a few details about the business.
- 2
The panel is checked
Halo Corporate Finance matches your enquiry against the 130+ lenders on its panel.
- 3
You choose
Halo talks you through the options that fit. You decide whether to apply. There is no obligation.
What to compare
- What the loan is for. Lenders price working capital, equipment and expansion differently. Saying exactly what the money is for helps match you to the right one.
- Whether it is government-backed. A loan under the Growth Guarantee Scheme can open the door to lenders who would otherwise say no, but it is still a commercial loan you repay in full.
- The total cost on the same amount and term, including any arrangement fee. Ask each lender for the total repayable so the numbers line up.
- The guarantee asked of you. For a small company, the directors are often the security. Compare what each lender asks you to sign personally.
- Flexibility, such as repayment holidays, paying off early without a large charge, or topping up the loan later.
The short answer
How do small business loans work?
A small business loan is a fixed sum your business borrows and repays in instalments, usually monthly, over an agreed term. Interest is added either as a rate on the balance or as a fixed charge agreed at the start.
Loans can be unsecured, where no specific asset is pledged and the directors usually give a personal guarantee, or secured against property or other business assets for larger amounts and longer terms.
The money can be used for almost anything the business needs: stock, staff, marketing, a refit, a new site, or smoothing out cashflow while you wait for customers to pay.
Size matters
How lenders see a micro, small and medium business
There are 5.7 million private sector businesses in the UK, and 99.85% of them are small or medium-sized. Lenders group them by size because the evidence they rely on changes as a business grows. Knowing where you sit tells you what they will want to see.
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Micro businesses
Fewer than 10 people. Loans are often small and judged mainly on the owner’s track record, personal credit and recent bank statements.
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Small businesses
Up to 49 people. Filed accounts carry more weight, and a wider range of lenders, including challenger banks, come into play.
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Medium businesses
Up to 249 people. Larger and longer loans, secured lending and asset-based facilities become realistic, with more scrutiny of forecasts.
Government-backed lending
Two schemes every small business should know
Both are run through the British Business Bank, the government’s economic development bank. Neither is free money: both are loans you repay.
The Growth Guarantee Scheme
Accredited lenders offer term loans, overdrafts, asset finance and invoice finance to smaller UK businesses. The government guarantees 70% of the lender’s loss if the business cannot repay, which lets lenders say yes where they otherwise might not. Personal guarantees are at the lender’s discretion.
- For UK businesses with turnover of up to £54 million
- Facilities generally up to £2 million per business group
- Term loans and overdrafts from £25,001; asset and invoice finance from £1,000
- Terms from 3 months to 6 years, or up to 10 years for some facilities
- The government guarantees 70% to the lender, but the business stays 100% liable
- Your main home cannot be taken as security under the scheme
- Open for applications until 31 March 2030
Start Up Loans
Personal loans for people starting or in the early years of a business, with free mentoring alongside. They are applied for directly through the Start Up Loans programme, not through brokers, so if you are pre-launch, start there.
Once the business is trading and needs more, or needs it faster, the panel can help with the next step.
Who lends to small businesses
Four kinds of small business lender
High street banks
Often the lowest cost for established, profitable businesses with clean credit. Slower, and stricter on time trading and security.
Challenger and specialist banks
Newer banks focused on SMEs. Together they now provide around 60% of gross lending to smaller businesses, and many offer government-backed loans with quicker decisions than the larger banks.
Specialist and online lenders
Faster decisions and more flexible criteria, including younger businesses, at a higher cost. Check fees and the total repayable carefully.
Revenue-based lenders
Repayments are a share of your card or online takings, so they fall in quiet months. Common in hospitality and e-commerce.
Sole traders and partnerships
Borrowing when the business is you
A sole trader and the business are legally the same person, so a business loan is a loan to you. Lenders look at your self assessment returns, business bank statements and personal credit file, and the debt is yours whatever happens to the business.
Partnerships are similar: partners are usually jointly responsible for the firm’s borrowing.
Extra protection on smaller loans
Business borrowing of £25,000 or less by a sole trader, or by a partnership of two or three partners, is generally regulated under the Consumer Credit Act, even when it is wholly for the business. That brings FCA rules on how the loan is sold and how you are treated if you struggle to pay. Halo handles these enquiries directly.
Not sure a loan is right?
Six alternatives to a small business loan
A term loan is not always the best fit. Depending on what the money is for, one of these may cost less or suit your cashflow better.
Business overdraft
Flexible short-term cover for the odd dip in cash. Usually repayable on demand, so not suited to funding something long term.
Business credit card
Useful for small, regular spending you clear each month. Expensive if balances are carried over.
Invoice finance
An advance against unpaid invoices, which grows with your sales. Suits businesses that wait 30 to 90 days to be paid.
Asset finance
If the money is for a vehicle or machine, asset finance spreads the cost over its working life and keeps the loan free for other needs.
Grants
Free money, but usually for specific projects, places or sectors, with match funding and long waits. Worth checking with your local growth hub.
HMRC Time to Pay
If the need is a tax bill, an HMRC payment plan may suit. Our VAT and tax bill loans page compares the two.
Before you apply
How to improve your chances of approval
Small changes in how you prepare can move a decision from no to yes, or improve the terms you are offered.
Check the panel- 1
File your accounts on time
Late or overdue accounts at Companies House are one of the first things a lender notices.
- 2
Check your credit files
Look at the business and personal files before you apply, and correct anything wrong.
- 3
Keep business and personal money apart
A dedicated business account with clean statements makes affordability easy to see.
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Ask for an amount you can justify
Tie the figure to a quote, a forecast or a bill. A clear purpose reads better than a round number.
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Apply once, in the right place
A single enquiry to the panel avoids a string of searches from lenders unlikely to say yes.
What counts as a small business loan?
There is no fixed definition. Lenders generally mean a loan to a business with fewer than 50 staff, from a few thousand pounds up to several hundred thousand, repaid over one to five years. The same products are available to sole traders, partnerships and limited companies.
How much can a small business borrow?
It depends mostly on turnover, profit and existing debts. As a rough guide, many unsecured lenders cap a loan at a proportion of annual turnover. Security, a strong credit history and a longer trading record all increase what lenders will offer.
Can I get a small business loan with no trading history?
It is harder but not impossible. Start Up Loans from the British Business Bank are designed for new businesses, and some lenders on the panel will lend to businesses in their first year, usually for smaller amounts with a personal guarantee. Our new business loans page sets out what is realistic at each stage.
What is the Growth Guarantee Scheme?
A government scheme run by the British Business Bank for UK businesses with turnover of up to £54 million. Accredited lenders offer loans, overdrafts, asset finance and invoice finance, generally up to £2 million, and the government guarantees 70% of the lender’s loss if the business cannot repay. The business remains 100% liable for the debt. The scheme is open until 31 March 2030.
Are small business loans regulated?
Lending to limited companies, LLPs and partnerships of four or more partners is not regulated under the Consumer Credit Act. Lending to sole traders and partnerships of two or three partners is generally regulated when the amount is £25,000 or less. Above £25,000 it is exempt if it is wholly or predominantly for business. Halo Corporate Finance handles regulated enquiries directly.
Do I need a business plan?
For an established business, recent accounts and bank statements usually matter more. For a new business, a start-up loan or a larger loan for expansion, a short business plan with cashflow forecasts makes a real difference.
Will a small business loan affect my personal credit?
Sending an enquiry does not. If you apply, lenders may check the personal credit of sole traders, partners and directors, especially where a personal guarantee is involved. Keep applications to the lenders most likely to say yes.
How long does it take to get a small business loan?
Some specialist and online lenders decide within a few days of receiving documents. Banks and government-backed loans tend to take longer, sometimes a few weeks, because of their extra checks.
Can a sole trader get a business loan?
Yes. Sole traders can borrow in their own name for business purposes. Lenders look at self assessment returns, bank statements and personal credit, because the business and the owner are legally the same.
Is it better to borrow from my bank?
Your bank knows your account history, which can help. But it can only offer its own products. Comparing the panel shows whether another lender suits your business better, and you can still go back to your bank with what you learn.
What if my loan application was turned down?
Ask the lender why. A decline from one lender does not mean others will say no, because each has its own criteria. Avoid applying elsewhere straight away; a single enquiry to check the panel is a better next step.
Sources
- British Business Bank: Growth Guarantee Scheme
- British Business Bank: Small Business Finance Markets 2026
- British Business Bank: Start Up Loans
- FCA Handbook: CONC, regulated credit agreements and business lending
- Department for Business and Trade: Business population estimates 2025
- legislation.gov.uk: Consumer Credit Act exemptions for business lending (art. 60C)
Written by the Compare Advantage team, Chorley. Facts checked against the sources above on 4 November 2026. This page is general information, not financial advice.
Compare Advantage Ltd (FRN 1028452, company no. 14289362) is an Introducer Appointed Representative of Halo Corporate Finance Ltd (FRN 726655). We introduce business finance enquiries to Halo. We are not a lender and do not give financial advice. If you take out finance, the lender may pay commission to Halo Corporate Finance, and Halo may pay us a fee for the introduction. Finance is subject to status and is available to UK businesses only.