Business Loans UK

Business Finance for UK SMEs

Business loans cover a wide range of funding products designed to help UK businesses manage cashflow, invest in growth, acquire assets, fund tax liabilities or bridge short-term gaps in working capital. The right type of business finance depends on the purpose of the funding, the business's financial position, its trading history and the term required.

NexGen Finance helps UK businesses review suitable business loan options, understand what lenders look for and, where appropriate, progress enquiries with experienced commercial finance providers.

Types of Business Finance

Unsecured Business Loans

Unsecured business loans provide funding without requiring property or assets as security. Approval is based on the business's trading performance, credit profile and affordability. Amounts typically range from £5,000 to £500,000, with terms from 3 months to 5 years. Unsecured lending is well suited to established trading businesses with a clear funding purpose.

Find out more about unsecured business loans

Secured Business Loans

Secured business loans are backed by property or business assets, allowing access to larger amounts and longer terms than unsecured facilities. They are commonly used for significant investment, expansion or acquisition where the business has suitable security available. Typical amounts range from £50,000 upwards, with terms of 2 to 25 years depending on the security and purpose.

Find out more about secured business loans

Working Capital Finance

Working capital finance helps businesses cover day-to-day operating costs, manage cashflow gaps or bridge short-term funding requirements. Products in this category include revolving credit facilities, overdraft alternatives and short-term business loans. Working capital finance is widely used across trading sectors where cashflow can be uneven or seasonal.

Find out more about working capital finance

Asset Finance

Asset finance allows businesses to acquire equipment, commercial vehicles, plant and machinery without paying the full purchase price upfront. Finance structures include hire purchase, finance leasing and operating leases. Asset finance is available for new and used assets, with the asset itself typically acting as security for the facility.

Find out more about asset finance

Invoice Finance

Invoice finance releases cash tied up in unpaid sales invoices, improving business cashflow without the need to wait for customer payment. Products include invoice discounting and invoice factoring, both of which can provide access to a significant proportion of the invoice value within days of raising the invoice. Invoice finance suits B2B businesses with reliable customers and predictable invoice volumes.

Find out more about invoice finance

VAT and Tax Funding

VAT funding and tax loans allow businesses to spread the cost of quarterly VAT bills or annual tax liabilities over monthly instalments, protecting cashflow. Rather than using trading funds to pay a large lump-sum tax bill, businesses use a short-term finance facility repaid over the tax period. This product is widely used by SMEs and limited companies across all sectors.

Find out more about VAT and tax funding

Is This Funding Suitable?

Business finance is available to a wide range of UK businesses, but eligibility depends on the type of product, the lender and the business's individual circumstances. As a general guide, business loans may be relevant if:

• ✓ The business has been trading for at least 6 to 12 months
• ✓ There is a clear and legitimate purpose for the funding
• ✓ The business can demonstrate an ability to service the debt
• ✓ The business director or owner has a reasonable credit profile
• ✓ The amount required is proportionate to the business's trading performance

Some products — such as VAT funding or asset finance — have more specific criteria. NexGen Finance can help review your position and identify which products may be most relevant to your situation.

What Lenders Typically Look For

Business loan lenders assess applications based on several key factors, though criteria vary by product and lender. Being prepared for these requirements can help avoid delays and improve the strength of an enquiry.

• ✓ Business bank statements — typically 3 to 6 months
• ✓ Filed accounts or management accounts showing trading performance
• ✓ Purpose of the funding and how it will be used
• ✓ Director or owner credit history
• ✓ Time in business and business structure
• ✓ Monthly turnover and profitability

Typical Funding Amounts and Terms

Product	Typical Amount	Typical Term
Unsecured Business Loan	£5,000 – £500,000	3 months – 5 years
Secured Business Loan	£50,000 – £5m+	2 – 25 years
Working Capital Facility	£10,000 – £250,000	3 – 18 months
Asset Finance	£5,000 – £1m+	1 – 7 years
Invoice Finance	Based on debtor book	Revolving facility
VAT / Tax Funding	£5,000 – £500,000	3 – 12 months

Speak to NexGen Finance About Business Loans

NexGen Finance helps UK businesses understand their business loan options, prepare a clear enquiry and progress suitable cases with appropriate finance providers. Call 0330 010 0061 or use the contact page to discuss your requirements.

Frequently Asked Questions