A business loan lets your company borrow money and repay it over an agreed period, usually with interest and fees. Start with what you need the money for, how long you'll need it and how the repayments will fit your cash flow. The lender will also look at affordability and may ask for security or a personal guarantee. Any finance will depend on its checks and terms.
Start with what you need the money for
“Business loan” is a broad label. Buying a machine, covering a short gap before customers pay and dealing with a cash shortage that returns every month are very different needs. Work out the amount, purpose and timescale first. Then be clear about where the repayments will come from.
If the immediate issue is a customer receipt arriving after payroll or suppliers fall due, use the cash-flow gap guide. For a wider comparison of short-term operating finance, see working-capital finance.
The main routes at a glance
These are common categories, not a promise that every option is available through Mills Commercial Finance or right for your circumstances.
| Route | Usually linked to | Repayment pattern | Questions to compare |
|---|---|---|---|
| Term loan | A set amount for a specific business purpose | Scheduled repayments over an agreed term | Total repayable, term, fees, security and early-repayment terms |
| Overdraft or revolving facility | Short-term needs where the amount you use may change | Interest or charges on the amount used, subject to the facility terms | Limit, renewal, pricing, covenants and whether the facility can be withdrawn |
| Invoice-linked finance | Cash tied up in eligible business-to-business invoices | Funding and fees linked to receivables and customer payments | Eligibility, assignment, customer contact, recourse and total fees |
| Asset finance or refinance | Buying an asset or releasing value from suitable business assets | Payments under the agreed facility | Ownership, security, valuation, term and total cost |
| Card-sales-linked finance | Companies with an established record of card takings | Collections commonly vary with eligible card sales | Total amount repayable, collection mechanism and impact during weaker trading |
What should a business compare?
- The total amount repayable, including interest and all fees.
- Payment amount, frequency and how those payments affect cash flow.
- The term, review points and early-repayment conditions.
- Any asset security, debenture, invoice assignment or personal guarantee.
- What happens after a late or missed payment.
- Whether the facility solves a defined need or only postpones a recurring deficit.
What might a lender ask for?
Requirements vary, but you may be asked for details about the company and its directors, trading history, accounts or management figures, business bank statements, existing borrowing and what the money is for. A lender may also want a cash-flow forecast and information about any available security. Supplying these documents does not mean the finance will be approved.
Alternatives to borrowing
Borrowing is not your only option. Depending on what you are funding and where the company is in its development, you might use your own cash, apply for a grant or consider equity investment. Each option affects repayment, ownership and timing differently. Business.gov.uk maintains a current overview and a directory of finance and support schemes.
How a UK Loan Experts enquiry works
UK Loan Experts is a trading style of Mills Commercial Finance Limited. Tell us what your company needs and provide your contact details so Mills can review the enquiry. This is not an offer or an approval. Any possible next step will depend on the available route, the lender's checks and its terms.
Frequently asked questions
What is a business loan?
It is money borrowed by a company and repaid under agreed terms, normally with interest and fees. It might be a fixed-term loan or another form of business credit.
Does a business loan require security?
Not always. It depends on the product, amount, lender and your company's circumstances. Ask what assets, guarantees or other security are required and what could happen if you cannot keep up with the repayments.
Are business loans regulated?
It depends on the borrower, product and activity. Do not assume every business-finance agreement has the same protections. Where the activity is regulated, check the firm and its relevant permissions on the FCA Register.