Business Loan Rates UK: What Each Product Actually Costs

There is no single business loan rate. The cost depends on the product, the risk and the security, and the same business asking for the same amount can see pricing that doubles or halves depending on which lender you approach.

Here is what we see across the market. These are ranges, not quotes.

- Unsecured business loans: roughly 6% to 25%+ APR. The top of that range is usually where a lender is stretching for a thin trading history or a borderline credit profile. Clean P&L and two years of filed accounts will pull you toward the bottom. - Secured business loans and commercial mortgages: roughly 6% to 12%. Security against property gives the lender a way out if things go wrong, so they price it accordingly. - Asset finance: roughly 5% to 15% APR. The kit itself is the security, so approval is often easier than an unsecured loan, but rates vary a lot by asset type and depreciation profile. - Bridging finance: roughly 0.5% to 1.5% per month, with interest usually rolled up into the loan rather than paid monthly. At 1% per month on a £500,000 loan that is £5,000 a month, and a lender will want to see a credible exit before day one. - Invoice finance: a service fee of roughly 0.5% to 3% of turnover plus a discount margin of around 1.5% to 4% over base rate. The fee moves with how much collections work the lender takes on. - Merchant cash advance: priced as a factor rate, commonly 1.1 to 1.5 times the advance, not as an APR. A 1.3 factor rate on £50,000 means you repay £65,000 through a percentage of card takings, with no fixed monthly payment.

Where you land inside these ranges is driven by a handful of things. Trading history and affordability come first: three or more years of filed accounts, steady turnover and clear profit price lower than a two-year-old business with lumpy revenue. Security is the next lever, an unsecured facility on a personal guarantee prices higher than the same money charged against property or a debenture. Lender type matters more than most borrowers expect: high street banks show the lowest headline rates but apply the tightest criteria and move slowly, while specialist and challenger lenders price higher and underwrite on wider criteria in days rather than weeks, so part of the job is knowing which camp your case belongs in. Term and loan size feed in too, a longer term lowers the monthly cost but raises the total interest paid, and very small facilities can carry a higher rate because the lender's fixed underwriting cost is spread across less money.

On fixed versus variable, most UK unsecured term loans are quoted at a fixed rate for the life of the loan, so repayments do not move even if the Bank of England base rate does. Some larger or secured facilities are variable, priced as a margin over base rate, so the cost falls if base rate falls and rises if it climbs. Neither is automatically cheaper; it depends on the term, the product, and where rates go, and the structure available to you is the lender's call.

No broker can promise you a rate. The lender decides, based on your specific file. What we do is package your case properly and put it to the lenders most likely to price it well, so you see genuine offers rather than headlines.