• How To Get A Small Business Loan

    Below we explain how to get a small business loan.

    If you want to maximise your chances of approval please call us on 03330 113622 and we will take you step-by-step through the process.


    How To Get A Small Business Loan

    For many UK-based companies, securing a commercial loan for a small business is a step towards achieving growth and stability.

    Accessing this type of financing can be helpful whether you are looking to expand your operations, invest in marketing or new equipment, or simply improve your cash flow. Getting financing in this way can be helped by understanding the loan application process.

    This guide to getting a small business loan will walk you through the various types of small business loans available, the application process, and tips for increasing your chances of approval.

    Types Of Small Business Loans

    How To Get A Small Business Loan

    You need to understand the different types of small business loans available to help you choose the best option for your business needs. Here are some of the most common types:

    1. Unsecured Loans - this is a loan where you don't provide any assets, e.g., property as supporting security. However, you may be asked to provide a personal guarantee.

    2. Secured Loans - conversely these will include assets which will be pledged as security for the borrowing. This improves the lender's security so they may be more liberal.

    Alternative Forms Of Funding

    Remember that other alternative forms of business funding are often more accessible to small businesses, such as invoice finance.

    What Are The Costs And The APR

    The cost of the loan, repayments and the APR (Annual Percentage Rate) are all going to be specific to your particular circumstances, the amount borrowed and the term of the loan. Once we complete a quote search these aspects will be explained in detail.

    Steps to Apply for a Small Business Loan

    The process of applying for a small business loan can seem daunting, but breaking it down into manageable steps can make it more straightforward. A broker can help you through this process.

    1. Assess Your Financial Needs

    Before you apply for a loan, ensure you have a clear understanding of how much money you need and what you will use it for. This will help you choose the right type of loan and your lender will want to understand your intentions.

    2. Check Your Credit Score

    Your personal and business credit scores play a significant role in loan approval. A higher credit score can improve your chances of getting approved and securing better interest rates. Obtain your credit reports and address any inaccuracies before applying. If you have time, you may also want to work on improving your credit score before you apply.

    3. Gather Financial Documents

    Lenders will require various financial documents to assess your business's financial health. Commonly requested documents include:

    • Business and personal tax returns
    • Bank statements
    • Financial statements
    • Business plan
    • Other documents - these may be specific to your business or trade, e.g., licences.

    4. Research Lenders

    If you choose to do the research yourself bear in mind that not all lenders are the same. Research different lenders to find those that offer loans suited to your business's needs. Consider factors such as interest rates, loan terms, fees, and eligibility requirements. We can do all of this for you if you would prefer.

    5. Prepare a Business Plan

    A well-prepared business plan can significantly enhance your loan application. Your business plan should outline your business goals, market analysis, financial projections, and how the loan will help your business grow.

    6. Submit Your Application

    Once you have gathered all the necessary documents and prepared your business plan, it's time to submit your loan application. Ensure that all information is accurate and complete to avoid delays in the approval process

    Tips for Increasing Loan Approval Chances

    Securing a small business loan can be difficult. Here are some tips to improve your chances of approval:

    1. Build Strong Business Credit

    Establishing and maintaining good business credit can make a big difference in your loan application. Pay your bills on time, keep debt levels low, and regularly review your credit reports.

    2. Demonstrate Financial Stability

    Lenders look for businesses that demonstrate financial stability and growth potential. Maintain accurate financial records, show consistent turnover growth, and manage expenses effectively.

    3. Showcase a Strong Management Team

    A capable and experienced management team can boost lender confidence. Highlight the expertise and achievements of your management team in your business plan.

    4. Offer Additional Security If Required

    Providing additional security, such as a charge over a commercial property, can lower the lender's risk and increase your chances of approval. Assets to offer as security can include property, equipment, sales invoices and stock.

    5. Seek Professional Support

    Consulting with a commercial loan broker can provide valuable insights and assistance in navigating the loan application process. They can help connect you with suitable lenders.


    1. What credit score do I need to qualify for a small business loan?

    Requirements vary by lender, some lenders may accept lower scores, but this could result in higher interest rates.

    2. How long does it take to get approved for a small business loan?

    The approval time can vary depending on the lender and loan type. Traditional bank loans may take several weeks, while online lenders can often provide approval within a few days.

    3. Can I get a small business loan if my business is new?

    Yes, new businesses can qualify for loans, although it may be more challenging. Other options, such as small business factoring may be easier to secure if you are a new business.

    4. What can I use a small business loan for?

    Small business loans can be used for various purposes, including working capital, buying stock, purchasing equipment or marketing.

    Securing a small business loan requires careful planning, research, and preparation. By understanding the types of loans available and following the steps outlined in this guide, you can increase your chances of obtaining the financing you need to grow and succeed.

    Further Information

    Read this post about: Small Business Finance Options

    See our article for more general information about How To Get A Business Loan

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Examples of funders we work with:

ultimate finance group
metro bank sme finance
leumi abl
pulse cashflow finance