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Small Business Loans UK

How do small business loans work and is it the right loan solution for your business?

29 reviews

Our reviews are based on realtime feedback 

Our reviews are based on realtime feedback 

Small business loans are a way SMEs can get an easy, low cost cash injection into their business. Cash flow loans for small businesses can be used for any business purpose, from hiring new staff and boosting cash flow to purchasing machinery or covering surprise costs. Small business loans are available as both secured and unsecured.

How do Small Business Loans in the UK work?

Like most types of finance, small business loans work by a lender giving a business money upfront which is then repaid month by month at an agreed rate over a fixed period of time. Cash flow loans for small businesses cover a variety of funding options for SMEs, including secured and unsecured business loans, fast business loans and invoice financing.

What are the main advantages and disadvantages of cash flow loans for small businesses in the UK?

Advantages of a small business loan

    • Quick and affordable way to get a cash injection into your business
    • No need to secure the loan against your assets in most cases
    • Don’t always require in depth credit checks

Disadvantages of a small business loan

    • If you have a low credit score, you may have to pay more to borrow the money as you are a bigger risk to the lender.
    • Try to keep the repayment terms as short as you can to avoid paying lots of interest over a longer term.

  • Have you thought about Invoice Finance as a UK small business loan alternative for your business?

    Invoice finance providers help business owners leverage their unpaid invoices in order to provide an instant cash injection into the business. Lenders release up to 90% of a business’s invoice straight away, and on payment of the invoice from their customers, will release the final amount, minus any fees and charges. 

    As well as boosting your cashflow without having to wait up to 120 days for customers to pay you, invoice finance providers will also chase your invoices for you.

    We are an invoice financing company who offer a solution whereby payments are collected on your behalf managed by our team of expert credit controllers so you can focus on running your business. Our Confidential Invoice Discounting solution is offered to businesses who want to maintain their own credit control processes, therefore this remains strictly confidential so your customers are unaware of our involvement.

    The benefits of invoice finance companies such as Hitachi Capital
      • Boost your cashflow without having to wait up to 120 days for your customers to pay you
      • An invoice finance company with a revolutionary digital onboarding process, giving you quicker access to funds and the ability to take on new business remotely during this lockdown period
      • Release up to 90% of the invoice straight away, and the final 10% when the invoice is settled
      • No need to chase your invoices, we can do it for you
      • 6 month trial period followed by a rolling contract

Get a quote online or call 0808 250 0859

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Is my business eligible for a small business loan in the UK?

A small business is defined as one whose turnover is less than £6.5 million and a balance sheet total of more than £3.26 million and doesn’t employ more than 50 people. So if your business fits these criteria and you need a short term loan to help with financing your daily operational costs to enable you to grow you can try applying for a small business loan.

Eligibility criteria for a small business loan can vary a lot and different lenders will have differing criteria. However it helps your application if you have kept up to date documents and statements from your business accounts as it allows the lender to see how much money is coming into and out of the business. It is also helpful for a lender to see your trading history, if it’s been profitable and if it looks like there is future potential to the business. Sometimes they need evidence of at least 2 years of trading but others will accept less. It will help if you have a good credit rating so any late payments of credit cards, mortgages and even household bills could count against you.

Eligibility will also depend on ability to repay the loan as small business loans tend to be taken out for a short period of time to help in the short term so monthly repayments could be higher than a normal loan.

What are the best ways to use a UK small business loan?

A small business loan in the UK can be used to invest in anything that will improve its future profitability and security.

There are many ways of doing this including using the loan to provide your business with working capital which can help with the day to day running costs that keep your business afloat. You could have a great business but sometimes short term issues will mean cash flow is affected, if cash flow is low you may no longer be able to pay wages, office rents and suppliers, a short term injection of cash via a small business loan could help you stay afloat and grow for the future.

It can help to buy essential business equipment that will help build up the profitability of the company in the future. A small business may not have the cash flow available in the short term for a large purchase so a small business loan could be useful in this case.

To invest in staff training and development and make sure they are keeping up to date with emerging technologies to improve the company’s ability to compete in a changing market.

To pay for advertising and marketing, this is essential for a small business that is looking for new clients and a small business loan invested in this way could be key for making sure you attract new business.

What are the differences between a UK small business loan and a start up loan?

A Start Up Loan is a government backed unsecured personal loan available for businesses that have been trading from between 0 to 24 months. It is available to companies in the UK that need help to start or grow and provides them with financial but also practical support in the form of 12 months free mentoring. 

A Start Up Loan works by allowing each owner or partner in the business, aged 18 or over to apply individually for a loan up to £25,000 and to a maximum total of £100,000 per business.

The interest rate is currently fixed at 6% and repayments are between 1 to 5 years.

By contrast a Small business loan in the UK is available to any small business in the UK at any time of its life as long as it meets the eligibility criteria of a small business.

The interest rates will vary depending on who you take the loan out with and the repayment period will vary depending on what works best for you and the lender.

A small business loan can be unsecured but is more likely to be secured on a business or personal asset so the risk you take on is greater.

We have revolutionised invoice finance with our digital onboarding process

We are an award winning invoice finance company

Best Invoice Finance Service 2021

Highly Commended Factoring Provider 2021

Best Invoice Discounting Provider 2020


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Please note that costs are an estimate only and are based on the entered values. Your final quote may change once a Business Development Manager has assessed your business in more detail.

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Why choose Hitachi Capital Invoice Finance as an alternative to a Small Business Loan UK

      • A 6 month trial period so you can be sure the product is right for you
      • Followed by a 6 month rolling contract – we don’t tie our clients in for long periods
      • A one fee solution with no hidden fees
      • Award-winning client service by our team of expert Client Managers
      • Our Relationship Management team are in the field to visit you in person
      • We are part of Hitachi Capital (UK) PLC, a company that is going from strength to strength – we’re here for the long term.

Smarter, Faster and Simpler Cashflow Finance with Hitachi Capital

Smarter, Faster and Simpler Cashflow Finance with Hitachi Capital

Smarter, Faster and Simpler Cashflow Finance with Hitachi Capital

Find out how we are revolutionising the way UK SME's access cashflow finance.

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Contact our friendly UK advisors on freephone

0808 250 0859

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