Are you considering borrowing a business loan but you don’t know what is available and if it will match your needs? Quick Loans Express explores 6 of the most popular business loans in 2019.

Story Highlights:

This brief guide highlights 6 of the most popular business loans for 2019. They are:
  1. The government-backed Start-Up Loan
  2. NatWest Small Business Loan
  3. HSBC Small Business Loan
  4. Santander’s Business Loan
  5. Yorkshire Bank Online Business Loan
  6. Funding Circle Business Loan
  7. Conclusion

What Are the Best Business Loans?

Before applying for a small business loan, you should consider certain factors such as the amount you wish to borrow and for how long. You should also consider the interest rates and whether you prefer a variable or fixed rate. Checking the eligibility criteria for the loan you’re interested in would save you time. Finally, the application procedure can take time and preparation so make sure that your financial records are up-to-date and you have all the necessary documentation ready such as a business plan.

For each of the loans, Quick Loans Express, a short term loans for bad credit lender consider these factors as well as the pros and cons of each loan. This guide doesn’t claim to be comprehensive so you should do your own research before applying.

A Government-Backed Start-Up Loan

Size of loan: £500-£25,000
Type of loan: Unsecured
Interest rate: Fixed interest at 6% per year
Loan term: 1-5 years
Eligibility: For start-ups or businesses which have been trading for under 2 years
Application Procedure: Complete the start-up loans registration form online

Pros & Cons

As part of this government-backed scheme, successful applicants receive 12 months of free business mentoring to help get their start-up off the ground. They will also help you with the completion of documents like a business plan and cash-flow forecast. Another advantage of this loan is that there are no application or early repayment fees. Unlike other business loans, this loan is a personal loan given for business purposes.

NatWest Small Business Loan

Size of loan: £1,000-£50,000
Type of loan: Secured & unsecured
Interest rate: Fixed but the rate depends on the size of the loan and your circumstances (check the slider on the bank’s website)
Loan term: 1-10 years
Eligibility: Any business with an annual turnover of up to £2 million
Application Procedure: Through the bank’s website

Pros & Cons

Since July 2016, NatWest has made £1.1 billion available as part of their commitment to helping SMEs. They also pride themselves on the flexibility of the loans to cater for different business enterprises. Personalised rates are also available for NatWest Business Account holders.

For unsecured business loans, they may ask you for a ‘director’s guarantee’, which would make you personally responsible for the debt in case of default.

HSBC Small Business Loan

Size of loan: £1,000-£25,000
Type of loan: Secured & unsecured
Interest rate: Fixed with APR of 7.4%
Loan term: Check their terms on the bank’s website
Eligibility: For start-ups or businesses which have been trading for under 2 years
Application Procedure: HSBC customers can apply through the internet banking portal. Others can apply by phone or by visiting their local branch

Pros & Cons

HSBC has recently announced the availability of a £10 billion fund to help small businesses. They also have an interest rate matching campaign, which can lead to a reduction in your fees. You can also take advantage of a 3-month payment holiday at the beginning of the loan term. Unlike some other banks, HSBC applies fees to business loan applications including a £100 arrangement fee.

Santander Small Business Loan

Size of loan: £2,000-£25,000
Type of loan: Secured & unsecured
Interest rate: Fixed from 4.9% APR
Loan term: 1-5 years
Eligibility: Borrower must hold a Business Current Account with Santander
Application Procedure: Online, by phone or by visiting their branch (depending on the type of business)

Pros & Cons

Santander offers flexible loans for small businesses at competitive rates, but it isn’t available for those who bank with their rivals. Although there’s no arrangement fee for the loan, other fees apply including an early repayment fee.

Yorkshire Bank Online Business Loan

Size of loan: £10,000-£50,000
Type of loan: Secured & unsecured
Interest rate: Fixed rates from 8.75%
Loan term: 6 months-5 years
Eligibility: You must have a private limited company registered in the UK (excluding Northern Ireland); have been trading for over 12 months and have an annual turnover of up to £2 million
Application Procedure: Only online. The bank says the 4-step application process only takes 10 minutes, but you must have all the company documentation to hand (such as director details, financial information, etc.)

Pros & Cons

The main advantage of this business loan is that you can receive the decision in only 48 hours. Although there are no charges for lump sum repayments or early repayment in full, there are arrangement fees. This is 3.5% of the sum borrowed and is deducted from the loan (although you pay interest on the full amount).

Funding Circle Business Loans

Size of loan: £5,000-£500,000 (up to £1 million for secured loans)
Type of loan: Secured & unsecured
Interest rate: From 3%
Loan term: 6 months-5 years
Eligibility: Use the checker tool on their website. For limited companies, they require 2 years of Companies House reports. For sole traders, they need formally prepared accounts
Application Procedure: Online at their website

Pros & Cons

The British Business Bank has made £100 million available for loans to SMEs through Funding Circle. As it is a peer-to-peer platform, it offers better terms and lower interest rates. However, the interest rate you’re offered will depend on your circumstances. Approval of the loan is relatively quickly – taking anything from 24 hours to a week. A loan from this platform has no early repayment, annual or renewal fees. However, there is a completion fee, which is 2-6% of the value of the loan.

Small Business Loans

In this article, Quick Loans Express offering pay day loans compares popular business loans. Business loans can be used for different purposes, and it isn’t one-size-that-fits-all. The one that you choose will depend on how much you need to borrow, the reason you need a cash injection and the type of business you run. Before deciding on one, check out alternatives to a loan. For example, an authorised business overdraft can work out cheaper in the long-run.

All of the 6 loans above have their pros and cons. Which business loan you decide to take out depends on a number of factors – both professional and personal. Only you can judge which is the best for your own circumstances. Choose wisely, and your loan will help your business flourish and expand too. If you need a small loan to cover your personal expenses while you invest in a business, apply with Quick Loans Express.

Crystal Evans
Crystal is a Web Content Manager with a passion for helping others. A Marketing Specialist by trade, Crystal’s first job was in the financial sector and she has been adding verve to personal finance ever since! When in high school, Crystal enjoyed creating revision notes and study aids for her peers – making concepts Crystal Clear. She continues this practice in the post-university School of Life – channelling her love of sharing information into blogging about personal finance

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