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All finance types
Seven families of UK business finance. Compare within a type, because comparing a term loan against a merchant cash advance tells you nothing useful.
- Business loansTerm loans, secured and unsecured, from high-street banks and alternative lenders. Borrow a lump sum and repay it over a fixed term.
+3 moreSourced comparison - Asset financeSpread the cost of equipment, vehicles and machinery, with the asset itself usually the security. Hire purchase, leasing and refinancing.
+4 moreSourced comparison - Invoice financeRelease cash tied up in unpaid invoices rather than waiting 30, 60 or 90 days to be paid. Factoring and invoice discounting.
+4 moreSourced comparison - Merchant cash advanceAn advance repaid as a fixed percentage of your card takings, so repayments rise and fall with sales. Priced as a factor rate or fixed fee, not an APR.
Sourced comparison - Commercial mortgagesBuy premises or refinance property your business already owns, over the long term and secured on the property.
+2 moreSourced comparison - Bridging & development financeShort-term, property-backed finance for a purchase, a refurbishment or a build, priced by the month rather than the year.
+2 moreSourced comparison - Business credit cardsA revolving limit for everyday spending and cash flow, with interest-free days if you pay in full. Credit cards and charge cards, compared on fees, rates and eligibility.
+6 moreSourced comparison
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The types side by side
Not sure which type fits? This is how each one normally works.
| Type | Suits | Typical term | Security | How it is priced | Speed |
|---|---|---|---|---|---|
| Unsecured term loan | A one-off need with a clear payback | Usually 1 to 5 years | No specific asset; personal guarantee common | APR | Hours to days |
| Secured term loan | Larger or longer borrowing | Several years, longer for property | Charge over property or assets | APR or margin over base | Weeks |
| Start Up Loan (government-backed) | New businesses | 1 to 5 years (as published) | Unsecured, personal loan for business use | Fixed rate (as published) | Weeks |
| Asset finance (HP or lease) | Vehicles, machinery, equipment | Matched to the asset's working life | The asset itself | Often a flat rate; ask for the APR | Days |
| Invoice finance | Slow-paying business customers | Rolling facility | Your unpaid invoices | Service fee plus discount charge | Days to set up |
| Merchant cash advance | Card-taking businesses with uneven sales | Months, until the fixed total is repaid | None; repaid from card takings | Factor rate or fixed fee | Days |
| Commercial mortgage | Buying or refinancing premises | Long term, often decades | The property | Fixed or margin over base | Weeks to months |
| Business credit card | Everyday spending and cash flow | Revolving; interest-free days if paid in full | Unsecured; a personal guarantee may be asked of a limited company | Purchase rate and annual fee; representative APR | Days to weeks |
| Bridging loan | A short gap, often a property purchase | Months, rarely beyond two years | Property | Monthly rate plus fees | Days to weeks |
| Development finance | Ground-up builds and heavy conversions | The build period | The site and the scheme | Monthly rate, rolled up, plus fees | Weeks |
General characteristics of each type of finance, to help you choose the right comparison. They are not any lender’s terms; those are in the sourced tables on each page.
Work out your repayments
Put in an amount, a rate and a term and see the monthly repayment, the total repayable and the interest, month by month. Illustrative, free, and nothing is collected.
Guides
- Small business loansHow UK small business loans work, what lenders look at, the costs to check beyond the rate, and a sourced comparison of what lenders publish.
- Start-up business loansBorrowing to start or grow a young UK business: the government-backed Start Up Loan, what other lenders require, and how to make a stronger application.
- Unsecured business loansWhat an unsecured business loan is, why it usually still needs a personal guarantee, how it is priced against a secured loan, and a sourced lender comparison.
- VAT loansWhat a VAT loan is, when it makes sense, the HMRC Time to Pay alternative, and the costs to compare before you borrow to pay a VAT bill.
- Working capital financeWhat working capital is, why profitable businesses still run short of cash, and how loans, overdrafts, invoice finance and merchant cash advances compare.
- Development financeHow UK property development finance works: loan to cost and to gross development value, staged drawdowns, rolled-up interest, fees, and sourced lender figures.
- Invoice factoringHow invoice factoring works in the UK, the fees involved, recourse versus non-recourse, and how factoring differs from invoice discounting.
- How to compare business loansA method for comparing UK business loan offers: APR versus total repayable, fees, security, flexibility, plus illustrative repayments at each lender's published rate.
- Business credit card APR explainedWhat a business credit card's purchase rate, representative APR and interest-free days mean, with a worked repayment example and every figure taken from the issuer's own page.
- Business credit cards and personal guaranteesDo you need a personal guarantee for a UK business credit card, and can a limited company avoid one? Only what each issuer publishes, with sources.
- Fees on business credit cardsThe annual, foreign transaction, cash withdrawal and late payment fees on UK business credit cards, side by side from each issuer's own page.
- Business credit card vs business loan vs overdraftHow a business credit card, a business loan and an overdraft differ in cost, flexibility and risk, with sourced UK rates for cards and loans.
- Business credit cards and your personal credit scoreWhat issuers say about credit checks, soft searches and personal guarantees when you apply for a UK business credit card, and how to find out what actually happens to your file.
- Business credit cards for new businesses and weaker creditWhat UK business credit card issuers publish about trading history, turnover and credit history requirements, and why no card page promises approval.