Compare Small Business Loans: Unsecured & Secured (2026)

By: Money Navigator Research Team

Last Reviewed: 07/12/2025

Finding the right business loan depends on how your business operates, how quickly you need funding, and whether you’re willing or able to offer security. From short-term unsecured loans to larger secured facilities, costs, eligibility, and repayment terms can vary significantly between providers.

This guide is designed for:

  • UK limited companies and sole traders comparing business credit cards

  • Business owners looking to manage expenses, cashflow, or rewards

  • Companies issuing cards to employees with spending controls

  • Businesses that want a clear, side-by-side comparison before applying

What we considered

  • Interest rates, fees, and overall cost of borrowing

  • Speed of decision and access to funds

  • Eligibility requirements, including credit profile and trading history

  • Flexibility of repayments and early repayment terms

  • Transparency, including whether the provider is a lender or a broker

This guide explains how UK small business loans work, the difference between unsecured and secured borrowing, who each option may suit, and what to consider carefully before applying.

We do not provide financial advice. We compare business loans objectively and may earn a commission if you apply through our links. This does not affect how products are compared or ranked.

Quick Navigation

Warning: Late repayment can cause you serious money problems. For help, go to moneyhelper.org.uk .

Important: Eligibility, interest rates, fees, and loan features vary by provider and can change over time. Approval is not guaranteed. Some business loans may require security or a personal guarantee, and applications made via brokers may involve your details being shared with one or more lenders. Always review the lender’s or broker’s full terms before applying.

Also Compare: 

Warning: Late repayment can cause you serious money problems. For help, go to moneyhelper.org.uk .

Important: Eligibility, interest rates, fees, and loan features vary by provider and can change over time. Approval is not guaranteed. Some business loans may require security or a personal guarantee, and applications made via brokers may involve your details being shared with one or more lenders. Always review the lender’s or broker’s full terms before applying.

Also Compare: 

Best Business Loans at a Glance

Compare leading UK business loan providers side by side. This table highlights typical loan types, funding speeds, and eligibility considerations to help you narrow down options before reviewing each provider in more detail below. Examples shown are indicative and subject to lender approval.

Provider
Rating
Key Features
Action
Capital on Tap
👉 Direct lender
Best for: Fast Cash / Revolving Credit
4.8 / 5
  • Credit limits up to £250,000
  • Competitive Rates
  • No impact on credit score to apply
Why it’s here:
Selected for businesses that want flexible, revolving access to funds rather than a fixed-term loan.
Iwoca
👉 Direct lender
Best for: Flexi-Loans & Speed
4.7 / 5
  • Loans from £1,000 to £500,000
  • Decision in 24 hours
  • Repay early with no fees
Why it’s here:
Selected for businesses prioritising fast decisions and short-term flexibility over the lowest possible interest rate.
Capalona
👉 Broker
Best for: Bad Credit / Startups
4.9 / 5
  • Compares 50+ UK lenders instantly
  • Accepts bad credit history
  • Unsecured loans from £1,000+
Why it’s here:
Selected for businesses with non-standard credit profiles that want to compare multiple lenders through a single application.

  • How to read this table: Ratings reflect our assessment of overall suitability based on cost, flexibility, speed, eligibility, and transparency. Details shown are indicative and may change – always check the lender’s or broker’s full terms before applying.
  • Eligibility: Availability, interest rates, loan amounts, and approval criteria vary by provider. Some business loans may require security or a personal guarantee.
  • Affiliate disclosure: Links take you to the provider’s website. We may earn a commission if you apply through our links, at no extra cost to you. This does not affect how products are compared or ranked.

Researched & reviewed by the Money Navigator team

Updated regularly to reflect changes in rates, fees and eligibility.

✅ Independent Comparisons

✅ No paid rankings

✅ No sign-ups

✅ We don’t sell your details

Editor’s Top Picks: Best Business Loans by Category

The “cheapest” business loan is not always the right one. A startup has different borrowing needs to an established limited company, and speed, flexibility, and eligibility can matter as much as headline rates.

Below, we’ve grouped leading UK business loan options by common use cases to help you understand which types of loans may suit different situations.

 🏆 BEST FOR SPEED & FLEXIBILITY  

1. Best for Speed & Flexibility: Iwoca

👉 Chosen for specific use cases – not suitable for every business.

iwoca is a direct lender focused on fast access to funding for small businesses. Unlike traditional banks, it uses open banking data to assess applications, with decisions often made within hours rather than weeks.

The Verdict: Often used by businesses that prioritise speed and flexible access to funds over the lowest possible interest rate.

Key Pros:

  • Speed: Decisions are often made within 24 hours.

  • Flexibility: Works like a credit facility – you only pay interest on the days you use the money.

  • Early repayment: Early repayment may be possible without penalty, depending on the product terms.

Watch out for: Interest rates can be higher than traditional bank loans, particularly for longer borrowing periods.

Not suitable if: You are prioritising the lowest possible interest rate over speed and flexibility.

👉 Eligibility and rates vary by lender and profile.

iwoca business loans
Visit Iwoca Website

 🏆 BEST FOR BAD CREDIT  

2. Best for Bad Credit & “All-Market” Search: Capalona

👉 Chosen for specific use cases – not suitable for every business.

Capalona is a broker rather than a direct lender. It helps businesses compare multiple lenders by using technology to scan a wide panel of specialist providers through a single application.

The Verdict: Often used by businesses with adverse or limited credit history that want to compare multiple lending options without approaching lenders individually.

Key Pros:

  • Soft search: Eligibility checks may be carried out using a soft credit search, depending on the lender.

  • Broader eligibility: Some lenders consider factors such as turnover and trading activity, not just credit history.

  • Variety: Access to unsecured loans, secured loans, and other forms of business finance in one place.

Watch out for: As a broker, Capalona may share your details with one or more lenders from its panel that match the information provided.

Not suitable if: You already know exactly which lender you want to apply to and prefer to apply directly rather than via a broker.

👉 Eligibility and rates vary by lender and profile.

capalona business loans
Visit Capalona Website

 🏆 BEST FOR REVOLVING CREDIT  

3. Best for Revolving Credit (Cash Flow): Capital on Tap

👉 Chosen for specific use cases – not suitable for every business.

Capital on Tap offers a revolving credit facility that sits somewhere between a traditional loan and an overdraft, allowing businesses to draw down funds as needed, subject to eligibility.

The Verdict: Often used as an alternative to fixed-term loans by businesses that want ongoing access to working capital rather than a one-off lump sum.

Key Pros:

  • Flexibility: Access funds as needed up to an approved limit.

  • Control: Transfer funds to your business bank account via the app.

  • Cost structure: Rates vary by profile, with interest-free periods available on some products.

Watch out for: Only available to limited companies and LLPs – sole traders are not eligible.

Not suitable if: You need a fixed lump sum with a set repayment schedule rather than ongoing access to credit.

👉 Eligibility and rates vary by lender and profile.

capital on tap business loans
Visit Capital on Tap Website

✋ Before You Apply for a Business Loan

Business loans can help support growth, but they are not risk-free. Borrowing the wrong amount, on the wrong terms, or from the wrong type of provider can put pressure on cash flow and limit future options.

Before applying, it’s important to understand the full cost of borrowing, the repayment structure, and how different loan types may affect your business if circumstances change.

What to Consider Before Applying

  • Total cost, not just headline rates
    Interest rates, fees, and repayment schedules all affect how much you repay overall. Lower headline rates do not always mean lower total cost.

  • Repayment flexibility
    Some loans allow early repayment without penalty, while others lock you into fixed terms. Flexibility can matter if cash flow changes.

  • Security and personal guarantees
    Secured loans and personal guarantees can put business or personal assets at risk if repayments are missed.

  • Impact on cash flow
    Regular repayments reduce monthly cash flow. Consider how repayments would be managed during quieter trading periods.

  • Suitability for your situation
    Not every loan is suitable for every business. Factors such as trading history, credit profile, and business structure all affect eligibility and risk.

Taking time to understand these points can help you compare options more clearly before deciding whether to apply.

👉 This information is general and not a recommendation

Warning: Late repayment can cause you serious money problems. For help, go to moneyhelper.org.uk .

Important: Applying for multiple loans in a short period can affect your credit profile. Where available, eligibility checks or soft searches may help you understand your options before making a full application.

Unsecured vs. Secured Loans: What is the Difference?

Understanding the difference between unsecured and secured business loans can help you assess the risks involved and how each type of borrowing may affect your business if circumstances change.

Important to understand

  • Availability, interest rates, and loan amounts vary by lender and business profile.
  • Secured loans are not guaranteed to be cheaper or easier to obtain in every case.
  • Unsecured loans may still involve personal guarantees, even without asset security.
  • This information is general and not a recommendation.

🔓 Unsecured Business Loans

  • What is it? An unsecured business loan is not backed by a specific business asset. These loans are commonly used by businesses that want to avoid pledging property, equipment, or land as security.

  • Pros: Faster to arrange (no asset valuation required) and no direct claim over business assets.

  • Cons: Interest rates are typically higher to reflect increased lender risk. Personal guarantees are often still required from directors.

  • Best for: Established businesses, tenants, online businesses, or smaller borrowing amounts where speed and flexibility matter.

🔒 Secured Business Loans

  • What is it? A secured business loan is backed against an asset, such as commercial property, machinery, vehicles, or land.

  • Pros: Often offers lower interest rates and higher potential borrowing limits compared to unsecured loans.

  • Cons: If repayments are not maintained, the lender may repossess the asset used as security. These loans typically take longer to arrange due to valuations and legal checks.

  • Best for: Larger borrowing needs, property purchases, equipment finance, or long-term debt consolidation.

Can I Get a Business Loan with Bad Credit?

👉 Important to note: Approval outcomes, pricing, and repayment structures for bad-credit business loans can vary significantly depending on the lender’s criteria, your business cash flow, sector, and wider market conditions at the time of application. Availability may change without notice, and not all options will be suitable in every situation.

In some cases, it may be possible. The UK business lending market has evolved, and not all lenders assess applications in the same way. While high-street banks often place significant weight on credit history, some alternative lenders also consider factors such as business performance, trading history, and cash flow alongside credit profile.

Approval is never guaranteed, and terms can vary significantly depending on the lender, product type, and individual business circumstances.

Important to Understand

  • Interest rates and fees are often higher for businesses with adverse credit
  • Some products may still require personal guarantees
  • Secured finance carries the risk of losing the asset used as security
  • Eligibility and terms vary by lender and business profile

Always review the lender’s or broker’s full terms and ensure the product is suitable for your circumstances before applying.

Common Routes for Businesses with Bad Credit

Below are information-only examples of funding routes that may be available to some businesses with weaker credit profiles.

  • Merchant Cash Advance (MCA): If your business takes regular card payments, some lenders assess funding based on monthly card turnover rather than credit score alone. Repayments are typically taken as a percentage of daily card sales, meaning amounts can fluctuate with revenue.
  • Secured Business Finance: If you own assets such as vehicles, equipment, or machinery, it may be possible to access finance secured against those assets. This can sometimes broaden lender options, but carries the risk of asset repossession if repayments are not maintained.
  • Broker Services: Business finance brokers (such as Capalona) can help businesses compare offers from multiple specialist lenders. Brokers do not lend directly but may help identify providers willing to consider applications from businesses with adverse credit histories.

👉 This information is provided for general guidance only and does not take into account your individual circumstances or financial position.

capalona business loans

How to Apply for a Business Loan (Document Checklist)

To help lenders assess your application efficiently, it’s useful to have the following documents ready before applying. Requirements vary by lender and loan type.

Documents Commonly Requested

  • Business bank statements: Most lenders will ask for read-only access via Open Banking or PDF statements covering the last 3–6 months.

  • Accounts or management figures: For larger loans (often above £25,000), lenders may request your most recent filed accounts or up-to-date management accounts / profit and loss statement.

  • Identification: Passport or driving licence for all directors or business owners with significant control.

  • Trading history: Many lenders require a minimum trading period (commonly 3–6 months), although criteria vary.

  • Business details: Company registration information, trading address, and details of how the funds are intended to be used.

Important to Understand

  • Document requirements differ between lenders and products.

  • Supplying documents does not guarantee approval or specific terms.

  • Some lenders may request additional information depending on your business profile.

👉 This information is general and not a recommendation.

For Brand-New Startups

If your business has not yet started trading, traditional business loans may not be suitable. You may wish to explore alternatives designed specifically for startups, such as government-backed schemes.

👉 Check eligibility for a Government Startup Loan

👉 Some lenders may carry out soft eligibility checks before requesting full documentation.

Quick links:

Business Loans FAQ's

Still unsure which loan is right for you? We know the lending market can be a minefield of jargon and varying rates. Below, we answer the most common questions UK business owners ask before applying.

What is the current business loan interest rate in the UK?

Business loan interest rates vary significantly depending on factors such as the lender, loan type, risk profile, trading history, and whether the loan is secured or unsecured.

High-street banks typically offer lower rates to established businesses with strong financials, while alternative lenders may charge higher rates to reflect increased risk or faster access to funds.

Always check the lender’s representative APR and full terms before applying, and remember that the rate offered to you may differ from any advertised example.

In many cases, initial eligibility checks are carried out using soft searches, which do not affect your credit score. However, if you proceed to a full application, a hard credit check may be required and could leave a visible footprint on your credit file.

Always confirm with the lender or broker what type of check will be carried out before continuing.

Some business loans require a personal guarantee, particularly for limited companies, newer businesses, or unsecured borrowing. A personal guarantee means the director may be personally liable if the business cannot repay the loan.

Not all loans require a PG, but availability depends on the lender, loan amount, and risk assessment.

Funding times vary by lender and loan type. Some lenders can release funds within a short timeframe once approved, while others may take longer due to additional checks, valuations, or legal processes.

Secured loans typically take longer to arrange than unsecured loans.

Startups with little or no trading history may find options more limited. In some cases, specialist lenders or government-backed schemes may be available, depending on eligibility criteria.

👉 Check eligibility for a Government Startup Loan

Always review the full terms carefully, as startup funding may involve different conditions or repayment structures.

Yes, some lenders offer business loans to sole traders. Eligibility is usually based on factors such as income, trading history, and credit profile.

Loan terms and requirements may differ from those offered to limited companies.

Early repayment terms vary by lender. Some loans allow early repayment with reduced interest, while others may include early repayment charges.

Check the loan agreement carefully to understand any fees or restrictions before committing.

In many cases, interest paid on a business loan may be an allowable business expense, provided the loan is used wholly and exclusively for business purposes.

Tax treatment can vary depending on your business structure and circumstances. You should confirm this with a qualified accountant or HMRC guidance.

Business loans are commonly used for purposes such as managing cash flow, investing in equipment, expanding operations, refinancing existing borrowing, or covering short-term expenses.

Some lenders may place restrictions on how funds can be used, so always check the terms before applying.

Applying directly may suit businesses that already know which lender they want to use. Using a broker can help businesses compare multiple lenders and explore options that may not be available directly.

Brokers may earn a commission from lenders, which should not affect how products are compared or presented.

Money Navigator Research Team

Market Research & Comparison Editors

money navigator

Money Navigator is an independent publisher specialising in UK business finance comparisons. Our editorial team researches and reviews business lending products to help business owners understand how different options work and what to consider before applying.

How We Assess Business Loan Providers

We compare lenders and brokers using a consistent methodology, focusing on factors that typically matter most to UK businesses:

  • Cost: Representative APRs, fees, and total borrowing costs where disclosed by the provider.

  • Speed: Typical decision times and how quickly funds may be released after approval.

  • Eligibility: How accessible the product is based on trading history, credit profile, and business type.

  • Flexibility: Repayment terms, early repayment options, and whether charges may apply.

Our assessments are based on publicly available information, provider disclosures, and direct product research. Product availability, pricing, and terms may change over time.

Editorial Independence

Money Navigator does not provide financial advice and is not a lender or broker. We aim to present information fairly and objectively to support informed decision-making.

Some links on this page may be affiliate links. We may earn a commission if you apply through these links, at no extra cost to you. This does not affect how products are compared, selected, or presented.

Important Information

This content is for general information only and does not constitute a recommendation. Always review the lender’s or broker’s full terms and conditions before applying.

👉 Warning: Late repayment can cause you serious money problems. For help, go to moneyhelper.org.uk.

Sources & Resources

The information on this page is based on publicly available guidance, lender disclosures, and authoritative UK financial resources. These sources are provided to help readers understand business lending in the UK and to explore further information independently.

  • MoneyHelper (UK Government-backed service)
    Business loans, borrowing risks, and repayment guidance
    https://www.moneyhelper.org.uk

  • Financial Conduct Authority (FCA)
    Consumer credit rules, financial promotions, and lender obligations
    https://www.fca.org.uk

  • British Business Bank
    UK business finance options, funding programmes, and lender directories
    https://www.british-business-bank.co.uk

  • HM Revenue & Customs (HMRC)
    Guidance on allowable business expenses and tax treatment of interest
    https://www.gov.uk/hmrc

  • UK Finance
    Industry body representing UK banking and finance providers
    https://www.ukfinance.org.uk

  • Individual lender and broker websites
    Product features, eligibility criteria, representative APRs, and full terms are sourced directly from each provider’s official website at the time of review.

👉  Important: This content is provided for general information only and does not constitute financial advice or a recommendation. Product terms, eligibility criteria, interest rates, and fees may change. Always review the lender’s or broker’s full terms and conditions before applying.