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Micro business loans

Looking to grow your business? Or just need a little extra working capital to keep your business moving? 

Our small business loans are available between £5,000 – £500,000 for almost any purpose.

We’re not a bank. Our lending criteria is different, and we look at more than just your credit profile.

Check your eligibility online in just two minutes, with no impact on your credit score, and you could receive your funds in as little as 24 hours.

How does the business loan work?

Unlike a traditional loan, Capify’s is paid back in very small amounts regularly. The repayments are completely automated so you don’t need to do anything. Many business owners love our regular payments, because they don’t have to save a large amount by a fixed date each month.

To be eligible for a business loan, you'll need to:

  • Turnover >£10,000 per month
  • Have at least 12 months’ trading records

The benefits of a Capify business loan

  • Raise from £5,000 - £500,000
  • Pay back little and often
  • No monthly lump sum
  • Opportunity to raise more funds

Loans tailored to micro businesses

When it comes to businesses in the UK, there’s no one scale. From large corporations to micro enterprises, each type is vital for the health and longevity of our economy. Micro-Businesses run by a single person accounts for over 90% of UK businesses as a whole

So, when it comes to funding this large proportion of businesses, what solutions are out there? One of the top choices might just be a micro business loan. Read on to find out more.

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What is a Micro Business Loan?

A micro business loan is a variation on a small business loan, designed for companies of single person scale or slightly larger. This borrowing is explicitly intended for small-scale businesses, and as such is available in lower amounts than what may be accessible to large companies. However, this also means the initial requirements for application can be less stringent, depending on the lender of choice.

Who are Micro Loans for?

Loans for micro businesses are as they say on the tin; they are a smaller-scale loan that is suitable for micro businesses of all types. This could be a business with two individuals or even a sole trader. Microloans aren’t industry specific; instead, they are dictated by the scale and overall size of the individual business.

Getting a Micro Business Loan

Are you considering a micro business loan as the best choice for your requirements? The next step is the application. At Capify, we take into account a variety of factors to decide if each business individually is a suitable candidate. These factors could include the performance of the company over time, or card transaction volume for businesses that frequently take card payments, such as small eCommerce micro businesses.

Managing cash flow can be challenging as a micro business, find out how to manage it here.

What Can I Use a Micro Business Loans For?

A loan for micro business can be used for practically any part of day-to-day operations; whether it’s purchasing a higher volume of stock in advance, maintaining steady cash flow in a slower period or even expanding the premises or equipment owned by the business.

What are the Advantages and Disadvantages of Choosing a Loan for Micro Businesses?

Before applying for a micro business loan, there are a few things to consider. Firstly, the main advantages of a specific loan for your business. For many companies, these loans prove to be easier to get accepted, as they are specifically designed to work for the type of business they own. However, it’s also worth considering the disadvantages of a loan for a tiny business; such as the fact that you need to ensure you have enough income to cover the loan as well as to live on.

Will My Business Qualify for a Micro Business Loan?

Whether your business will qualify for a micro business loan from Capify will depend on a few things. Primarily, your company must have been running for at least six months, and you must have a turnover of at least £60,000. However, speaking to our team can provide you with some additional insight into the process as required.

Micro Business Loans from Capify

At Capify, we offer two distinct products that are ideal for micro businesses. Our business loan for limited micro companies is the perfect choice for many sole trader style businesses, while our merchant cash advance option is the right fit for businesses of a range of sizes. Contact us today to find out which loan would be the most suitable for your business today.

Micro Businesses: The Statistics

According to Experian, size isn’t the only thing that matters to small businesses – in fact, over 23,000 micro businesses have a turnover of more than £1m; making them perfectly eligible for our range of micro business loans. In London, 18% of the UK’s total micro businesses reside; making it the ideal location for up-and-coming companies and start-ups.

At Capify, we know the benefit of supporting micro-businesses, and according to microbusiness.ac.uk, the support of lenders is making all the difference; with 71% of micro businesses looking to expand just a few years ago. With an impressive 1 million of those businesses being women-led, it does seem like micro businesses are truly the future of the UK economy – and that’s something we want to invest in.

Pros & Cons of Micro Business Loans

ProsCons
Easier Qualification: Micro business loans typically have more relaxed eligibility criteria, making them easier to qualify for.Higher Interest Rates: Micro business loans may carry higher interest rates compared to larger business loans.
Quick Approval: The loan application process is usually faster for micro business loans, providing quick access to funds.Limited Loan Size: The loan amount might be insufficient for larger-scale business projects or expansion.
Small Loan Amounts: These loans offer smaller amounts of funding, which can be suitable for micro and very small businesses.Strain on Cash Flow: Repayment terms may lead to a strain on the business’s cash flow, affecting day-to-day operations.
Shorter Repayment Terms: Micro business loans often come with shorter repayment periods, enabling faster debt clearance.Limited Impact on Growth: The loan size and terms might not significantly impact business growth opportunities.
Helps Establish Credit: Timely repayments on micro loans can help establish or build the business’s creditworthiness.Potential Collateral Requirements: Some micro business loans may require collateral, which could be a challenge for small businesses.
Flexible Use of Funds: Borrowers have more flexibility in using the funds for various business needs.Less Favorable Terms: Borrowers might face less favorable terms due to perceived higher risk associated with micro businesses.

Micro Business Loan FAQs

Micro business loans in the UK are small-scale financing options designed for micro and very small businesses. Borrowers can typically access micro loans ranging from a £5,000 to £50,000, subject to lender policies and financial eligibility.

All lenders have different borrowing criteria, typically however, you must have at least 6 months trading history and at least £10,000 in revenue per month.

Interest rates for micro business loans in the UK can vary based on factors such as the lender, the business’ creditworthiness, and the loan duration. Typically we offer a factor rate of 1.26.

Collateral requirements for micro business loans in the UK may vary among lenders. Some loans might be unsecured, while others may require collateral(secured business loans), such as business assets or personal guarantees.

Yes, UK micro business loans offer flexibility in how the funds can be used, whether it’s for working capital, purchasing equipment, financing inventory, or expanding the business. The loan amount can be used as needed.

The approval process for UK micro business loans is typically faster compared to larger loans. Some lenders may provide approval within a few days or weeks. At Capify we aim to approve and fund micro business loans in 24 hours.

It may be possible to secure a micro business loan in the UK with less-than-perfect credit, but the terms and interest rates offered might be less favorable. At Capify, we typically approve bad credit micro business loans as long as the minimum criteria is met – which isn’t reliant on the borrower needing good credit.

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