A small business loan is, unsurprisingly, a loan that is offered to small businesses. Small business loans differ from other loans because they’re tailored explicitly to the needs of small businesses. So the rates available, as well as the repayment terms, are generally better suited to smaller businesses. They’re highly useful because they allow small businesses to easily unlock the financing they need to invest in stock, promotion, or business development – and they can also take the sting out of difficult financial periods.

The UK Companies Act 2006 defines a small business as any business with a turnover over under £6.5 million, a balance sheet not in excess of £3.26 million, and less than fifty employees

Our customers sit at the heart of everything we do and therefore it’s important that we make our products simple and accessible. We’re proud to have a team of dedicated professionals who can help guide e-commerce business owners through the process and find the best solution for them. For this reason, we’ve built a strong community of customers who come back to us time and time again.

We place a lot of emphasis on human communication over tech. Whilst we think that tech is important and delivers a fast process from application to receiving your funds, you’ll also have a dedicated point of contact who will always be available at the end of the phone if you’ve got a question. 

We have a team of real people who look over every single deal. Not every business is the same, so we believe that underwriting should be conducted on a case by case basis rather than using a ‘one rule fits all’ approach.

Small business loans come in all shapes and sizes to suit a wide variety of businesses in every industry you can think of. So if you’re a start-up, a franchise, you have poor credit, a sole trader or limited company, etc. – you’ll find a loan that is tailored specifically to your needs. Whatever your industry may be, from e-commerce to manufacturing, if your business needs a quick cash injection, small business loans may be the answer.

Some lenders may put specific restrictions on what a general small business loan can be used for if they offer more specific services for those needs. For the most part, however, a small business loan can be used for anything you need it to be. You can put the money towards new premises, or refurbishing your current one. You can bulk-buy stock to see you through a seasonal rush or invest in a vehicle for your business. Hiring new staff, or providing further training for any current staff is also an option. As is investing in new equipment. Small business loans can also see you through periods of financial difficulty, and keep your business buoyant when cash flow is limited.

The repayment terms are entirely dependent on the specifics of the loan you choose. It depends on the amount of money you want to borrow, and the rate of repayment that you’re able to comfortably afford. The more you can pay back, the shorter your repayment terms will be. It’s important to prioritise comfortably making the repayments, however, rather than making larger repayments. It’s better to take a longer repayment term you can actually afford than agree to pay back money every month you can’t afford.
Loans can be short, medium, or long term. Common short term loans might last for six months, medium loans eighteen months, and long term loans anywhere from three to five years.

Knowing which loan is right for you can be a struggle. Taking it as a given that you understand what you need from a loan, how can you know which kind of loan to apply for to achieve your goals? For that, you need to know a little bit about all the most common small business loans you’re likely to encounter. Knowing their benefits, and drawbacks will help you make the most informed choice possible.