Typical Business Finance Costs
Here's our at-a-glance guide to indicative rates, facility sizes and decision times across the main business funding products in the UK.
This page sets out what business funding costs, product by product. The most common question we hear is "what rate will I pay". The tables below show the ranges we typically see, banded by business profile, so you can work out where you are likely to sit.
The figures are ranges observed, but they can move if the Bank of England base rate changes and also with each funder's appetite and business needs. The exact numbers for your business are the ones a funder puts in writing for your specific needs. Where a rate is shown as a percentage per annum, it is an indicative annual interest cost.
SMEmoney.co.uk is an introducer for businesses. We are not a lender, we are not a broker, we're a technology platform. We introduce your enquiry to our funding partners, which reaches a wide range of lenders across all the products below. We serve businesses only. Limited companies and LLPs borrowing for business purposes are welcome at any amount, and sole traders and small partnerships where the borrowing is £25,000 or more and wholly or predominantly for business purposes.
Asset Finance
Indicative annual interest cost, banded by business profile. Note, these are flat rates not APRs.
Business profile | Typical rate per annum |
|---|---|
Well established, 5 years old or more, strong balance sheet, good business credit rating, higher balances | 4% to 6% |
Newer businesses, profitable, positive balance sheet, good director personal credit scores, lower balances | 7% to 10% |
Under 2 years old, mixed credit profiles, negative balance sheet | 10% plus |
Detail | Range |
|---|---|
Loan amounts | £5,000 to £10,000,000 |
Terms | 1 to 5 years typically |
Decision time | 1 day to 1 week, longer on complex cases |
Personal Guarantees | The lender has title to the asset until it is paid off, so often there is no Personal Guarantee. Varies by lender/business age, profitability and balance sheet strength. |
Invoice Finance
Indicative cost per month, banded by business profile.
Business profile | Typical rate per month |
|---|---|
Well established, 5 years old or more, strong balance sheet, good business credit rating | 0.75% to 1.5% |
Newer businesses, 2 years of accounts or more, profitable, positive balance sheet, good director personal credit scores | 1.5% to 3% |
Under 2 years old, mixed credit profiles, negative balance sheet | 3% plus |
Detail | Range |
|---|---|
Minimum facility | £20,000 to £2,000,000 |
Decision time | 1 day to 1 week, longer on complex cases |
Other | A minimum business revenue is often required |
Personal Guarantees | The lender has title to the invoice so often there is no Personal Guarantee, but it varies by lender/business age, profitability and balance sheet strength. |
Business Loans
Indicative annual interest cost, banded by business profile.
Business profile | Typical rate per annum |
|---|---|
Well established, 5 years old or more, strong balance sheet, good business credit rating | 7% to 9% |
Newer businesses, 2 years of accounts or more, profitable, positive balance sheet, good director personal credit scores. | 10% plus |
Under 2 years of accounts, there are a few lenders who will consider your application, but rates will be high. Alternatives like the Growth Guarantee Scheme could be an option, but likely to require personal guarantees. | 15% to 20% |
Detail | Range |
|---|---|
Loan amounts | £1,000 to £25,000,000 |
Decision time | 1 day to 1 week, longer on complex cases |
Other | A minimum revenue is usually required |
Personal Guarantees | Not mandatory, but likely for smaller, newer businesses. Varies by lender. |
Merchant Cash Advance
Priced on a factor rate set at the outset rather than an interest rate. A factor rate is a multiplier applied to the amount advanced: borrow £10,000 at a factor rate of 1.2 and you repay £12,000 in total, collected as a percentage of your card takings. Because the cost is fixed at the start and does not fall if you repay early, a factor rate is not comparable to an APR and tends to work out more expensive than a conventional loan over the same period.
Business profile | Factor rate at outset |
|---|---|
Well established, 5 years old or more, strong balance sheet, good business credit rating | 1.1 to 1.15 |
Newer businesses, 2 years of accounts or more, profitable, positive balance sheet, good director personal credit scores | 1.15 to 1.25 |
Under 2 years old, mixed credit profiles, negative balance sheet | 1.25 to 1.4 |
Detail | Range |
|---|---|
Facility sizes | £5,000 to £2,000,000 |
Decision time | 1 day to 1 week, longer on complex cases |
Other | A minimum revenue from card sales is required |
Personal Guarantees | Often required with Merchant Cash Advances as they lender has little security. Varies by lender. |
Vehicle Finance
Indicative annual interest cost, banded by business profile.
Business profile | Typical rate per annum |
|---|---|
Well established, 5 years old or more, strong balance sheet, good business credit rating | 4.5% to 6% |
Newer businesses, 2 years of accounts or more, profitable, positive balance sheet, good director personal credit scores | 6% to 10% |
Under 2 years old, mixed credit profiles, negative balance sheet | 10% plus |
Detail | Range |
|---|---|
Facility sizes | £5,000 to £500,000 |
Decision time | 1 day to 1 week, longer on complex cases |
Personal Guarantees | Usually only required for new businesses or thin balance sheets, varies by lender. |
A Note on These Figures
The rate you are offered turns on the same handful of factors across every product: how long you have been trading, whether your accounts show a profit and a positive balance sheet, your business credit rating, and the personal credit of the directors or owners. Stronger profiles sit at the bottom of each range, and newer or weaker profiles at the top. Security, the size and term of the facility, and the sector you trade in all move the number as well. The amount of commission the broker retains will also have an effect on the rate. Typically brokers receive a small percentage of the advance as a fee.
None of the figures on this page is a promise of what you will pay, and nothing here is a quote or a recommendation to take a particular product. On the tax and accounting treatment of any of these facilities, which differs by product and by structure, please speak to a qualified accountant.
All rates, factor rates, facility sizes and decision times on this page are correct at the time of publishing and are subject to change.
