Business finance from £10,000 to £2 million — any sector

Understanding Finance

What Determines the Interest Rate on a Business Loan?

Two businesses borrowing the same amount can be offered very different rates. Lenders price risk, and they look at a handful of core factors.

Trading history and performance

Lenders favour businesses with a track record of stable or growing turnover and profit. Up-to-date accounts and bank statements help evidence this.

Credit profile

Your business credit file — and often the directors’ personal credit — indicates how reliably you have repaid in the past.

Security and term

Secured loans and shorter terms usually attract lower rates. Government-backed schemes such as the Growth Guarantee Scheme can also improve terms for eligible businesses.

Because we work across a panel of lenders, we can match your profile to the lender most likely to offer the best price.