How to get a business loan

Find out how to get a business loan or get started now with our simple application.

  • Apply online in 10 minutes
  • Decision in as little as 1 hour
  • Borrow £10,000 to £500,000
  • Rates from 2.9% - 12.1% p.a.
British Business Bank

Funding Circle is accredited by the Government-owned British Business Bank to provide business loans of £25,001 to £350,000 under the Recovery Loan Scheme (RLS). .

How to get a business loan: step-by-step

Do you want to take your business to the next level with a fast, affordable business loan? Follow these steps to find the right loan for your business and boost your chances of being accepted. We’ll talk you through the key considerations of business loan applications, and walk you through the process, step by step.

Start your search for a small business loan by figuring out exactly what your business needs. Consider what the loan will be used for and precisely how much this will cost. This will allow you to give a confident, to-the-penny answer when lenders ask how much you need to borrow. They will be more likely to consider your application if you can demonstrate that you’ve thought this through.

At this stage, you must also consider how much you can afford in monthly repayments without adversely affecting your business operations. The goal is to minimise the amount you pay in interest, without putting your business under too much financial strain.

Business credit scores work much like personal credit scores. They reflect your payment history, credit usage, and other factors which determine how attractive you are to lenders. It is important to check your business credit score before filling out a loan application. The most favourable loan terms are usually reserved for applicants with extremely low-risk credit scores. Note that your credit score is not universal and may differ from agency to agency. Check Experian, Equifax, CreditSafe and Endole.

Newer businesses may not yet have much information on their credit report. In these instances, lenders may take your personal credit score into account when considering your application. If you haven’t been in business for long, give your personal score the once-over before submitting a loan application.

If you’re hoping to get a small business loan over a short repayment period, you might consider applying for an unsecured loan. As unsecured loans require no collateral, you can skip straight to the next step of the application process. If you hoping to get a larger, secured business loan through a bank or similar lender, you will need to assess the value of your collateral before making an application.

When assessing the value of your business collateral, consider inventory, property, equipment, vehicles, other machinery, and accounts receivable. It is sometimes possible to use personal collateral if your business has no suitable collateral. This may include your home, car, and other personal valuables like jewelry or antiques.

As with any important purchase, it pays to shop around for your business loan. Approaching your business bank is by no means your only option. Bear in mind that bank loans are usually harder to get and require more paperwork. Furthermore, the application process can take weeks or even months. Online lenders typically offer faster financing and paper-free applications, though interest rates are likely to be higher.

Check out as many lenders as possible when comparing loan terms. You will need to consider loan amount, loan term, fees, penalties, and annual percentage rate (APR). Always calculate the total cost of the loan and make sure your budget can accommodate the monthly repayments.

Once you have narrowed down your options to a shortlist of possible lenders, find out which documents and what sort of evidence each lender requires. Banks usually have the strictest requirements and ask for more documentation, while online business loan applications are usually made by filling out a simple online form.

If you’re applying for a loan with your business bank, you may be asked to provide up to five years of financial projections, bank statements, tax returns, lease agreements, and business licenses. Whatever documents you do require, make sure they are in order. Any mistakes or missing information may delay your loan application.

What documents do I need to get business loan?

After you have completed our online form, you’ll need to send a few documents to finish your application. We may require:

Business bank statements for up to the last six months

These bank statements must show:

  • The Account name and (where possible) the registered address. These must match the business you create the loan application for.
  • The sort code and account number.
  • All daily transactions.

Latest full unabbreviated accounts

These accounts must include:

  • Profit and loss
  • Detailed profit and loss
  • Balance sheet information

Now that you’ve chosen your lender and have all the information you’ll need, it’s time to apply for your business loan. The application process will be faster and less stressful if you have all necessary documents and figures on hand, ready to go. Choose your lender and business loan carefully, as being turned down may adversely affect your business credit score. Note that eligibility checkers provide an indication of whether you will be accepted, and do not affect your credit score.

Some lenders take weeks or even months to consider business loan applications. Many online lenders will come to a decision in a matter of hours and will pay your loan into your account on the same day the application is approved.

A Funding Circle small business loan can be much more affordable than a business overdraft or credit card.

Mike of award-winning tea company Bird & Blend took out a business loan to grow and create jobs during the pandemic. Read more.

How to apply for a business loan

It’s quick and easy to apply for small business finance online and our support team are on hand if you have any questions.

  1. Check if you qualify in 30 seconds

    See if you’re eligible without affecting your credit score.

  2. Apply online in 10 minutes

    Tell us about you and your business with our simple application.

  3. Get your decision

    If approved, you’ll receive a no-obligation, personalised quote.

  4. Your loan is funded

    Once you accept, we run some final checks to process your loan and deposit the money straight into your account.

Apply now

Here to help if you need us

Our UK-based team are here to help throughout your loan.

0800 048 2467

Need help? Call us.

Brilliant service and every step is made to be as easy and straight forward as possible.
Mel, March 2021

Is a business loan right for you?

Before considering how to get a small business loan, you should take some time to evaluate whether taking out a loan is the best course of action. Business loans can be used to refinance existing debt or support your business through times of financial hardship. However, you should never take out a business loan if you are not 100% certain you can meet the repayments.

You may be a good candidate for a business loan if:

  • You're buying assets that will add long-term value to your business
  • You require additional funds to grow or expand your business
  • You wish to build your business credit score
  • You need help managing your cashflow

You may not be a good candidate for a business loan if:

  • You cannot find a loan of the correct amount with suitable terms
  • You are not certain you can afford repayments
  • You have recently been refused a business loan
  • You have used up all existing lines of credit

Here is more information on how to improve your credit score to help you get a business loan

Check your eligibility in 30 seconds with our online form without affecting your credit score.

Related resources

Learn more about your options for small business loans

Business loan calculator

Find out how much a loan could cost with our business loan calculator.

Learn more

Resource centre

Find guides, tips and more in our dedicated resource centre for small business owners.

Learn more

Business loans

Learn what you can borrow for, how to apply and how we’ll help you with a quick decision.

Learn more

How it works

See how our business loans work and how we can help you go further.

Learn more

Recovery Loan Scheme

Apply for the Government's Recovery Loan Scheme

Learn more

Secured or unsecured loans

Understand the difference between the two and find the right option for your business.

Learn more

We’re here to help

Contact our team if you have any questions.

0800 048 2467

Need help? Call us.