Clear, practical guides to UK business finance. No jargon, no sales pitch — just the information you need to make the right decision.
A bridging loan's total cost includes interest (0.45–1.2% per month), an arrangement fee (1–2% of the loan), valuation fees (£300–£2,000), legal fees (£1,500–£4,000), and potentially an exit fee (0–1%). On a £300,000 loan at 0.75% per month over 6 months with a 1.5% arrangement fee, total costs typically reach £18,000–£22,000.
Read guideEnter your property value, loan amount, monthly interest rate, and loan term to get a total cost estimate. The calculator shows your gross loan, total interest, and any rolled-up balance — helping you compare deals and check affordability before applying.
Read guideYes — bridging loans are one of the most common ways to fund auction purchases because they can complete within 14–28 days, matching the tight completion deadlines set by most UK property auctions. You should secure a Decision in Principle (DIP) before bidding so you know your maximum bid and can exchange contracts confidently on the day.
Read guideUK bridging loan rates in 2026 range from around 0.45% to 1.2% per month, depending on LTV, property type, and your credit profile. At 65% LTV on a standard residential property with a clean credit history, rates start around 0.5% per month (roughly 6% per annum). Higher LTVs, commercial security, or adverse credit push rates higher.
Read guideA bridging loan is short-term secured finance that bridges the gap between buying a new property and selling an existing one, or provides fast capital while longer-term finance is arranged.
Read guideYes — bridging loans are one of the most common ways to fund property renovations in the UK, covering both light refurbishment (cosmetic works under £50,000) and heavy refurbishment (structural works, extensions, or change of use). Funds can be drawn in tranches as works complete, keeping interest costs down. The exit is typically a refinance to a standard mortgage or sale of the completed property.
Read guideThe three main exit strategies for a bridging loan are: sale of the property, refinance to a long-term mortgage (residential, buy-to-let, or commercial), and completion of development works followed by sale or refinance. Lenders want to see a credible, evidenced primary exit — and ideally a clear plan B if the primary exit is delayed. The quality of your exit strategy is one of the most important factors in whether your bridging loan is approved.
Read guideUse the standard amortisation formula: monthly payment = P × [r(1+r)^n] / [(1+r)^n − 1], where P is the loan amount, r is the monthly interest rate, and n is the number of monthly payments. For a flat-rate loan, multiply the principal by the flat rate and add it to the principal divided by term.
Read guideTo qualify for a business loan in the UK, you typically need at least 2 years of trading history, a minimum annual turnover of £100,000, a clean or recoverable credit profile, and the ability to demonstrate that the business can afford the repayments. You'll also need to provide financial documents and, for most unsecured loans, a personal guarantee from directors.
Read guideThe best Capital on Tap alternatives include Funding Circle for lower-rate term loans, Tide for combined banking and credit, Starling for a full business bank account, Revolut Business for multi-currency spending, iwoca for larger unsecured loans, and ANNA Money for invoicing and credit combined.
Read guideThe best Funding Circle alternatives include iwoca for faster decisions, Fleximize for flexibility, LendingCrowd for competitive peer-to-peer rates, BizcCap for same-day funding, Capify for adverse credit, Start Up Loans for new businesses, and Capital on Tap for revolving credit.
Read guideTo get a business loan in the UK, you need to meet lender criteria on trading history (typically 2+ years), minimum annual turnover (often £100,000+), creditworthiness, and affordability. Prepare your accounts, bank statements, and a clear explanation of what the loan is for before applying.
Read guideThe best iwoca alternatives include Funding Circle for lower rates on larger loans, YouLend for revenue-based repayment, Capital on Tap for revolving credit, Fleximize for flexibility, Capify for fast decisions, Start Up Loans for new businesses, and BizcCap for same-day funding.
Read guideThe best Tide alternatives for UK business banking include Starling for a full licensed bank account, Revolut Business for international and multi-currency needs, Mettle for sole traders and freelancers, ANNA Money for invoicing-first businesses, Monzo Business for simple SME banking, and Cashplus for businesses with adverse credit.
Read guideThe best YouLend alternatives include Liberis for ecommerce and platform-embedded funding, 365 Business Finance for high-volume MCAs, Capify for flexible advance structures, iwoca for traditional loan alternatives, Funding Circle for lower-rate term loans, and Capital on Tap for revolving credit.
Read guideThe documents required for a business loan depend on the loan type and amount, but most applications need 2–3 years of business accounts, 3–6 months of bank statements, proof of identity and address for directors, and details of any existing borrowing. Larger or secured loans require additional items such as property valuations, management accounts, and a business plan. Open Banking connections now allow many lenders to access bank data directly, speeding up the process.
Read guideA merchant cash advance (MCA) is a form of business finance where a lender advances a lump sum in exchange for a percentage of your future card sales, plus a fixed fee. Repayment is automatic — a set percentage of daily or weekly card takings is collected until the advance and fee are fully repaid. Because repayments flex with revenue, MCAs suit businesses with variable income but consistent card payment volumes.
Read guideYes — bad credit does not automatically exclude you from business lending in the UK. Specialist lenders, fintech platforms, and alternative finance providers assess applications using live bank data and business performance as well as credit history. You should expect higher rates, lower loan amounts, shorter terms, and stronger security requirements. What counts as 'bad credit' varies by lender — a CCJ from three years ago may be acceptable to a specialist lender even if it disqualifies you from a high-street bank.
Read guideCommercial mortgage rates in the UK currently range from around 5.5% to 8.5% per annum depending on property type, LTV, and borrower profile. Owner-occupied commercial property attracts the lowest rates; semi-commercial and development exits sit higher. Rates are typically quoted as a margin over the Bank of England base rate or SONIA.
Read guideA commercial mortgage is a long-term loan secured against a commercial property — such as an office, warehouse, retail unit, or mixed-use building. They're used either to purchase the property or to release equity from property you already own. Terms typically run from 5 to 25 years, with deposits of 25–40% required.
Read guideMost commercial mortgage lenders require a minimum deposit of 25–30%, meaning they lend up to 70–75% LTV. Investment commercial property typically requires 35% down (65% LTV), and specialist or higher-risk assets such as pubs or care homes may require 40% or more. The exact deposit needed depends on the property type, your business profile, and which lender you use.
Read guideYes — commercial mortgages are available for pub purchases in the UK, but pubs are classified as specialist or 'trading' commercial property, which means you need a specialist lender rather than a mainstream bank. Lenders assess the pub's actual net profit (ANP) from trading rather than the bricks-and-mortar property value alone, typically require a 35–40% deposit, and will scrutinise the property licence, lease terms (if tied), and trading history carefully.
Read guideWith hire purchase (HP), you pay instalments over an agreed term and own the asset outright at the end. With leasing, you pay to use the asset for a set period but never own it — at the end you return it, extend, or (with a finance lease) enter a secondary rental. HP suits businesses who want to build equity in the asset; leasing suits those who want to use and upgrade without ownership.
Read guideAn operating lease is essentially a rental — the asset stays on the lessor's balance sheet, you return it at the end, and payments are treated as an operating expense. A finance lease transfers most ownership risks and rewards to you — the asset appears on your balance sheet as both an asset and a liability, and you typically have an option to purchase or continue using it at a nominal cost at the end.
Read guideAsset finance is a way for businesses to acquire equipment, vehicles, or machinery without paying the full cost upfront. Instead of buying outright, you spread the cost over monthly payments, either working towards ownership (hire purchase) or paying to use the asset for a set period (leasing). It allows you to preserve working capital while using the assets you need to trade.
Read guideYes — startups can access asset finance, though the options are more limited than for established businesses. Lenders focus on the asset's value rather than trading history, which makes asset finance more accessible to new businesses than unsecured loans. You will typically need a 10–30% deposit, may be asked for a personal guarantee, and should expect to deal with specialist lenders rather than high-street banks.
Read guideWith invoice factoring, the finance company takes over your sales ledger, chases your customers for payment, and is visible to them. With invoice discounting, you retain control of your own credit control — your customers don't know a finance company is involved. Factoring suits smaller businesses with limited admin resource; discounting suits larger businesses that want confidential access to cash against their debtors.
Read guideInvoice discounting is a type of invoice finance where you borrow against your unpaid invoices while continuing to manage your own credit control. You raise an invoice, notify the finance company, receive up to 90% of the value within 24 hours, and repay when your customer pays. In most cases it's confidential — your customers never know you're using it.
Read guideInvoice finance has two main costs: a service charge (typically 0.5–2.5% of annual turnover) that covers the facility administration, and a discount charge (typically 1.5–4% per annum above base rate) on the funds you actually draw against outstanding invoices. For a business with £1,000,000 annual turnover using 80% of its invoices, total annual costs typically run between £15,000 and £35,000.
Read guideSelf-build finance is released in stages as construction progresses — either in arrears (after each stage is completed) or in advance (before each stage begins). You'll typically need a 20–25% deposit, planning permission secured or in principle, and a build cost schedule. Rates are higher than standard residential mortgages but the product is specifically designed for properties that don't yet exist.
Read guideDevelopment finance rates in the UK currently range from approximately 0.65% to 1.20% per month (8–15% annualised), depending on project type, LTGDV, developer experience, and the lender. Residential development attracts the lowest rates; commercial and mixed-use development sits higher. Arrangement fees of 1–2% and exit fees of 0–1% add to the total cost.
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