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What is a small business loan?

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:

The benefits of a Capify business loan

Everything you need to know about small business loans

Every business needs cash in its bank account to run properly. It doesn’t matter how big or small – cash flow is everything. It’s one of the few things that a corner shop and a massive international business have in common! Naturally, that means some businesses need to boost their cash flow from time to time. Just like most people can’t afford to put several thousand pounds down for a new car instantly, a business owner also can’t afford to buy some of their assets up front either. That’s why they need a bit of help from a small business loan. Flexible business finance gives business owners the time and resources to invest and keep growing. With that essential extra cash, those great opportunities will be within reach.

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What is a small business loan?

A small business loan is a sum of money borrowed by a business and is a form of debt finance used by small businesses to pay for costs and expenses incurred in the running of the business.


How tricky is it to find the right small business loan?

Despite all this good stuff, the small business marketplace can still be difficult to work out. Especially if it’s your first time…

  • There’s loads of choice and different options. Do you have time to shop around?
  • Interest rates and costs vary massively. How do you know if you’re getting the best deal?
  • It’s difficult to know if you’ll be accepted or not. Can you check easily?
  • Will repayments be unaffordable? Is there some flexibility, or is it ‘their way or the highway’?

If you’re at the beginning of your search, we’ve got some good, solid guidance for you. Nothing too complicated or wordy – just practical help for any small business looking for a small business loan.


Where to get a small business loan

Once you know what is a business loan, it’s time to look for one that works for you and your business. There are lots of places to get a small business loan, and some are a bit unexpected… 


Most people picture a big, old-school bank when they think of finance. Going to a bank for a business loan used to mean booking an appointment, putting on your best outfit, and selling yourself to them. Now, you can usually raise finance by applying online.

There’s still a bit of ‘selling yourself’ involved, but at least you don’t have to put a shirt on anymore…

Government bodies

Some small businesses can get cash straight from the government. Schemes and funds are sometimes set up to support specific types of businesses, particularly when there’s a big demand for them.

To encourage new business growth, the government recently launched a Start Up Loan scheme. If you don’t fall into their criteria, you’ll miss out, but it’s always worth seeing what’s available.

Professional organisations

If you’re working on something that could be really big in your industry, some organisations would be happy to help. Grants and loans are often available for research, development, and other important costs.


The more people empowered to develop their business, the better. That’s why some charities create funds specifically to help people set up or grow their small business.

There are many organisations with funds for people who usually struggle to access finance. The Prince’s Trust Enterprise programme was set up for entrepreneurial 18-30 year olds. 

Alternative lenders

Just like ordering a taxi or a takeaway has been revolutionised by technology, so has business finance. Alternative business finance lenders have sprung up in the last few years (the industry grew by 32% between 2016 and 2017), promising to make borrowing cash for your business a lot easier.

Their products and rates vary massively, but they can usually provide simple online customer service and fast access to cash.

Some important business loan terminology you need to know

Don’t know your APR from your factor fee? Here are some essential business loan terms, explained in normal human language we can all understand.


You! The person borrowing money or raising finance.


That’s us – the people who lend your business the cash.


The amount of cash you raise.


The extra percentage you repay on top of the amount you borrowed.

Annual Percentage Rate (APR)

The average interest repaid by a lender’s customers every year.

Factor rate

This is an easy way to work out the full amount you’ll repay after interest is added. If you borrow £10,000 and the factor rate is 1.32%, you’ll pay back £13,200 in total.


You usually repay your loan through regular payments. You’ll keep making these payments until the loan is fully repaid.


The amount of time it will take to pay your finance back.


A physical item you include as part of your loan agreement. That means the lender can take it from you if you can’t repay the finance.  


A guarantor helps you get a loan by promising to cover your repayments if you can’t afford them.

Why are small business loans so important?

With all these options available (some much faster than others…), it’s easy to see why some small business owners don’t bother, or put off a loan for as long as possible.

Small business loans are way too important to miss out on though. Growing your business obviously improves your own life and career, but it also has a big impact on the economy. 

In 2018, there were 5.6 million small businessesin Britain.

According to the Federation for Small Businesses, there are loads of small business operating up and down the country.

Small businesses represent 99% of ALL British businesses.

A small retailer or family-run restaurant has an important job to do. Small businesses made up “99.3% of all private sector businesses” in 2018, and hired 60% of all private sector staff in the UK.

Small businesses like yours dominate EVERY main industry.

It’s not just a general statistic, small businesses represent a huge majority of businesses in every industry

The number of British small businesses has risen by 63% since 2000.

In the last 18 years, we’ve gained 2.2 million small businesses, showing people are more able and empowered to set up on their own!

How does a small business loan work?

Every lender is different, but generally you’ll raise finance through the same process.

Get a quote or find out how much you can raise

This will depend on how much you can realistically pay back, and how much cash you need.

Decide on the terms

You and the lender will decide how much you can borrow, how long it will take to pay back, and how much you’ll pay at a time. Payments could be daily, weekly, or monthly.

Sign the documents

The official bit.

Spend your cash

The fun bit!

Make repayments

These will reflect whatever you agreed at the start. Some agreements can be paid off early, others can’t. If you’re not sure, give your contract another read to check.

Brilliant things YOU can do with a small business loan

Most business owners know exactly what they’d do with some extra cash. You’re probably no different, but we’ve got some inspiration for you if you need it.

Growth is the main focus, but there are loads of different ways to achieve it. Your small business will have specific gaps or weaknesses, or you might have noticed you’re struggling to get the resources together to achieve something you really want.

It doesn’t matter what it is – there are no right or wrong answers! Here are some great ways to spend your small business loan.

Refurbish and redecorate

Colour schemes, furniture, and facilities make a big difference, especially when your customers spend a bit of time with you. Keep things up to snuff by staying on top of the paintwork and updating the armchairs.

Support your staff

Your team are one of your main strengths, plus every business knows the pain of replacing staff every few months. A small business loan can pay for the training they need to keep learning and growing, or help you bring new staff on board during busy times.

Get new equipment

Having the right tools can transform what you do for your customers. Your salon can become the best in town with the right hair tools, or your shop can become a destination with exclusive stock. 

Make things efficient

Business technology helps you speed up all those boring processes that eat into your day. Point of-sale systems, apps, and software will create staff rotas, order stock automatically, and even project your cash flow for you. 

Reach a whole new audience

Every business needs to spread the word. Use your new budget to create irresistible online and offline marketing strategies. It could be advertising in the local paper or launching a Google 

Adwords campaign. Or – better yet – both!

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