Business Loan Calculator
Frequently Asked Questions
What is a typical business loan interest rate in the UK?
UK business loan rates vary widely: bank loans 5-12%, alternative lenders 8-25%, government-backed loans (UKBG) 5-10%. Rates depend on business age, revenue, creditworthiness, and security offered.
What is the UK Business Growth (UKBG) scheme?
The UK Business Growth scheme (replacing Start Up Loans and Recovery Loan Scheme) provides government-backed loans for SMEs. It offers reduced rates and more accessible lending criteria than standard commercial loans.
What's the difference between secured and unsecured business loans?
Secured loans use assets (property, equipment) as collateral — typically lower rates but risk losing the asset. Unsecured loans have no collateral requirement — higher rates but less risk to assets. Personal guarantees are often required for either type.
Can sole traders get business loans?
Yes — sole traders can access many business loan products. Lenders typically assess personal credit score, business income (tax returns/bank statements), and trading history. Personal and business finances are legally linked for sole traders.
Is business loan interest tax-deductible?
Yes — interest paid on business loans taken for business purposes is an allowable business expense for Corporation Tax or self-employment income tax purposes. Capital repayments are not deductible.
What documents do I need for a business loan?
Typically: last 2-3 years' accounts or SA302s, 3-6 months' bank statements, business plan (for newer businesses), proof of ID and address, details of existing finance commitments.
How long does business loan approval take?
High street banks: 2-4 weeks. Alternative/online lenders: 24 hours to 7 days. Government-backed schemes: 1-3 weeks. Having prepared documentation speeds the process significantly.
What is invoice financing?
Invoice financing (factoring/invoice discounting) advances up to 85-95% of outstanding invoice values immediately, rather than waiting 30-90 days for customer payment. It's not a traditional loan but improves cash flow.