Business loans are one of the most common ways UK companies fund growth, manage cash flow, and deal with unexpected financial pressure. Yet despite their popularity, business lending is often misunderstood. Many businesses focus on speed or interest rates without fully understanding how different loan types work or when they are appropriate.
This guide explains business loans in plain terms, covering how they work, the main types available in the UK, eligibility considerations, costs, and how businesses can decide which option best suits their needs.
What Is a Business Loan?
A business loan is a form of commercial finance where a company borrows a set amount of money and repays it over an agreed period, usually with interest. Business loans can be short or long term, secured or unsecured, and structured in different ways depending on the lender and the purpose of the borrowing.
Main Types of Business Loans in the UK
There is no single “business loan” product. Instead, businesses can choose from several different structures depending on their needs.
Unsecured Business Loans
Unsecured business loans do not require property or major assets as security. They are typically faster to arrange and are often used for short-term or time-sensitive needs. For a full breakdown, read: Unsecured Business Loans in the UK: Eligibility, Costs and Approval Times.
Secured Business Loans
Secured business loans are backed by assets such as property or other business assets. They often allow larger borrowing amounts and longer terms, but can take longer to arrange due to valuations and legal checks.
How Business Loan Eligibility Is Assessed
Eligibility is based on affordability and risk. To understand exactly what lenders review, read: Business Loan Eligibility Explained: What Lenders Look For.
Understanding Business Loan Costs
The cost of a business loan is not just the interest rate. Fees, term length, and repayment structure all matter. For a proper breakdown, read: Business Loan Costs Explained: Interest Rates, Fees and True Borrowing Costs.
How Long Does It Take to Get a Business Loan?
Approval times vary depending on the loan type and complexity of the application. For realistic timescales and what speeds things up or slows things down, read: Fast Business Loans UK: How Quickly Can Businesses Access Funding?.
Choosing the Right Loan for Your Business
The best business loan is the one that fits the business’s cash flow, purpose, and repayment ability. Matching the loan structure to the business need reduces risk and long-term cost.
Understanding Your Options Before You Apply
Business loans are not one-size-fits-all. Eligibility, costs, and approval times vary widely depending on the business and the type of finance chosen.
Use this page as your hub, and work through the supporting guides depending on what matters most right now: