Choosing a small business loans lender

From government grants to online alternative finance, there are hundreds of lenders and finance providers to choose from. When they all offer something slightly different, how are small business owners supposed to know which is right for them?

If you’re browsing the market at the moment, think about what kind of amount you want to borrow, what repayment terms would work for you, and how long you’d like to spend paying it back. There will be a lender out there to suit you and your small business. Here are a few to consider.

Bank loans and finance

Bank loans and finance

Most major high street banks offer accounts, finance products, and loans for small businesses. For some, bank loans are an ‘old faithful’ they can rely on, but others have found it hard to get accepted by them.

Repayment is usually in monthly payments over anything from 1 to 10 years, the interest rate will be fixed too and decided at the start of the loan. The amount you can borrow varies a lot, and depends on your credit check. It usually ranges from a few thousand pounds to £50,000.

You can use your bank business loan to pay for anything that will benefit your business, including equipment, property, and stock.

Credit unions

Credit unions

A credit union is a not-for-profit financial co-operative. All members pay money into the union, which can then be borrowed by other members. Money is usually paid in and spent locally in your community, meaning everyone has a shared bond and could potentially even benefit in some way from how the money is spent by the borrower.

To borrow, you need to be a member and have paid into the credit union for a while, so this isn’t a quick loan you can access at short notice. Interest rates will be set low to make it affordable, and repayment terms can be over several years.

Credit unions are still regulated by the Financial Conduct Authority and covered by the Financial Services Compensation Scheme.

Direct commercial lenders

Direct commercial lenders

Unlike a bank, a direct commercial lender purely focuses on loans. Their products can vary massively, but they’ll usually set their maximum loan amount a bit higher than a bank would. If your credit check and business information looks good, you could borrow a bigger chunk of cash.

Some loans will be short term, and others might have a longer repayment period. Sometimes the loan will be secured against property or high value equipment owned by your business.

Many small businesses could be eligible and can use the finance for important purchases, new stock, and more.

Business finance brokers

Business finance brokers

A broker will compare different sources of finance and different lenders, present you with the best options for your business, and then deal with the application for you. The length of the loan or amount will depend on what you need. Your broker will be able to advise you on the loans you’re most likely to be accepted for.

If sourcing finance could be more difficult for your business because you have specific needs, a broker can do most of the leg work. Alternatively, some businesses decide to go directly to a lender, because it’s faster, cheaper, and they know what they want.


Peer to peer lenders

Peer to peer lenders

This is a simple, but relatively new, business finance model. Investors will put money into a peer-to-peer platform, which you and other businesses can then borrow from. While you pay the money back, the investors earn more interest than they’d get from an ordinary savings account.

There are fewer peer-to-peer lenders on the market to choose from, and they sometimes provide finance specifically for property. Repayment varies from a few months to several years.

Which provider is right for your business?

Which provider is right for your business?

A particular business loan could be ideal for one small business, and inflexible or impractical for another. That’s why it’s crucial to do your research, get quotes wherever you can, and be fully informed about repayment terms and interest rates.

With all this info, you can make a smart, informed decision, and feel comfortable with your repayments for months or years to come.


Capify Small Business Loan: Raise up to 130%* of your average monthly turnover


You could raise £5,000 to over £500,000 with Capify’s Small Business Loan.

Instead of repaying large monthly payments, you’ll repay what you can afford. Capify will take a small daily or weekly payment over a 6 to 12 month period until your loan is repaid

*Subject to terms


Capify Merchant Cash Advance: Only repay when cash comes into your business


You could raise £3,500 to over £500,000 with Capify’s Merchant Cash Advance.

Designed for small businesses taking payments through a card machine, the Merchant Cash Advance gives business owners the opportunity to repay only when they get paid by their customers.

A small percentage of your daily card payments will be taken as a repayment, so you’ll always know you can afford it. If you’re closed on a particular day, or don’t take any payments, you won’t repay a penny.



Capify is proud to offer…


The personal touch
You’ll work with your own dedicated account manager, who’ll guide you through the application process and answer all your questions.

UK-based support
We’re based in South Manchester and work with small businesses all over the UK.

Manageable repayments
Make small, regular payments to repay your loan. You can focus on growing your business without worrying about cash flow and affording repayments.


We’re trusted by thousands of small and
medium sized businesses.

We take pride in working with thousands of UK businesses, and we really appreciate what they say about our
products and services.