9 "Best" Business Loan Brokers In 2024 (+ Pros & Cons) (2024)

In the absence of prior expertise, the process of locating and qualifying for company funding may be time-consuming and convoluted. Using the services of a business loan broker may help you save time, get valuable insight, and find the most favourable terms for a loan for your small company.

This guide will detail the steps you need to take to apply for a loan, explain what you can do to increase your chances of approval and provide advice from others who have been in your shoes.

Let’s begin by discussing the best commercial loan brokers.

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At a Glance, Pros and Cons

This section summarises the pros and cons of top business loan brokers in the UK.

Pros

✔️ Potentially helpful for expanding your company.

✔️ Your business remains entirely under your management.

✔️ As long as payments are made, the bank will stay out of it.

✔️ Interest rates that might be more beneficial than those on credit cards.

✔️ Use a known brand with a solid track record.

Cons

❌ Conditional acceptance.

❌ Long application procedure.

❌ You run the risk of losing the collateral for a secured loan.

Top business loan brokers — Reviews

As always, ensure your choice is covered by the FSCS.

1. Capital on Tap — Top-rated business loan broker

If you'd prefer not to deal with a bank or a lender with a high-interest rate, Capital on Tap might be a great option.

A secure credit card may be used for the same purpose as a loan. You are borrowing money from a bank and agreeing to pay it back, along with interest. Capital on Tap is fantastic because it paves the way for you to collect rebates and incentives that may be reinvested in your business.

Visit Capital on Tap

Since there is no limit to the number of cards available, you may let as many employees in as you need without giving up any power. The card offers a rebate of 1.5% on all purchases, which may be used towards future purchases or withdrawn as cash. Although organisations and sole proprietors stand to gain substantially from this, they should keep a few things in mind.

Capital on Tap is aware that all your company really needs are answers. That and more is what you get with this one. You have access to an open line of credit with a variable interest rate between 0% and 34%, allowing you to charge and repay purchases as you see fit. You may use it to cover costs, pay it off, and then use it again. This kind of revolving loan is quite uncommon.

You can operate your company without worrying about who has access and when since you have an infinite supply of access cards. The card gives you 1.5% back on every purchase, and you can use that money towards whatever you like.

2. Metro Bank — Popular business loan broker in the UK

Customers can rely on Metro Bank to provide all of their banking needs in a one location. You need to be one of their business customers to apply for their fantastic small business loans.

The terms may be adjusted to meet the needs of your business, letting you streamline your processes. Visit one of their many UK sites to talk to a human being in person.

Visit Metro Bank

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Their APRs might fluctuate between 9% and 12% depending on the state of the economy. A loan of up to £25,000 is available to anybody who needs it for personal expenses or business expansion. It's possible that you'll need to put up collateral or a guarantee to be approved for an unsecured loan using this approach.

Acceptance criteria and repayment

Any Metro Bank small business loan candidate must have an active Metro Bank business checking account. While this is somewhat inconvenient, having everything in one place has its advantages. Having everything in one place also provides a sense of safety and protection. The small company loan is intended for companies with yearly sales of less than £2 million.

Your total payments are calculated from the allocated APR and the period that you choose, and repayment is typically made monthly. The terms of these loans might range from one to five years. The repayment schedule and loan amount that is manageable for your company may determine your best option.

When deciding on a loan term with Metro Bank, you should be aware that there may be early repayment penalties in specific circ*mstances.

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3. Tide — Digital business loan broker accounts

Whether or not a company's financial provider supports open banking services, Tide's app can still interact with them securely.

Tide can now gather data quickly and apply its algorithms for loan approvals thanks to this technology. Tide offers new business financing, invoice discounting, and working capital. There are a variety of funding options available, such as grants, grants, and merchant cash advances.

Visit Tide

Quick bank account activation

There are no surprise fees or penalties associated with a Tides loan. A smaller loan may be obtained without the need for collateral or stringent credit checks.

Tide is a dangerous rival because to its widespread popularity and high rate of satisfied customers. Since they are now in charge of the firm, Funding Options, they have access to the organisation's extensive financial expertise. Also, integrate with other accounting software.

4. Yorkshire Bank — Trusted UK business loan broker

When compared to loans from other financial institutions, a small company loan from Yorkshire Bank stands out for its distinctive features. The first is the accessibility of an otherwise difficult-to-obtain fully unsecured loan.

This financial institution has generous maximum approval amounts and revenue thresholds before labelling a company as “small”. It is quite unusual for small businesses to get authorised for sums of up to £150,000.

Visit Yorkshire Bank

Online applications and prepayment incur no additional costs, by the way.

Their strong points

Yorkshire Bank is one of the few commercial lenders that provides unsecured loans to qualifying borrowers.

Although the sums available via unsecured loans are often significantly less, having that option is still useful. The annual percentage rate (APR) is also manageable, capping out at roughly 20% for unsecured loans. The annual percentage rate (APR) for most loans is between 3.5 and 19.

After 18 months in business and reaching the required turnover, you have a good chance of being accepted. And even if you don't fit this description, you could still get the green light.

5. NatWest — Well-rated business loan broker

Although the annual percentage rate (APR) on a NatWest small business loan is becoming a little high, it is still preferable to most other lending choices.

The fact that there are no fees or penalties for early repayment is only the beginning of the many attractive features of this loan offer.

You must have a business checking account, but it need not be with this institution. They will hold you personally liable for the loan, and will demand you to submit security as a guarantee.

Visit NatWest

Specifics regarding the loan

NatWest advertises a rather accommodating range for their small company loans. If you make a particular request, they may be willing to bend the rules in other areas as well, such as the payback period.

And remember, you have the option to make early payments.

6. Funding Circle — P2P business loan service

While Funding Circle is now a commercial lender, that wasn't always the case.

It started off as a marketplace for people to lend money to small and medium-sized enterprises directly from one another, or a “peer-to-peer lending exchange”.

Visit Funding Circle

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This online marketplace allowed small firms to possibly get finance at more affordable rates than they could have gotten from a traditional financial institution. Unfortunately, “retail investors” were unable to continue using the Funding Circle market when the epidemic began. This service was discontinued between 2020 and 2022, and it is no longer available to individual investors.

Conditions

Loans are now made available via the company's internet marketplace. Direct investments from investors into small businesses are made possible via the platform.

Loans of up to £1 million are available to British enterprises. In other nations, the maximum allowable sum may be different. In North America, the cap is little over £350,000, whereas in Europe it's roughly $500,000 (about £300,000).

This means that Funding Circle does not directly provide small company loans to its customers. Instead, this platform acts as a matchmaker, helping investors identify small firms that are comfortable with the same degree of risk as themselves.

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7. HSBC — International business loan broker

With a market capitalization of almost £2.5T, HSBC is Europe's biggest bank. Known for continuously innovating, more than 60 nations may make use of HSBC's banking services, making it one of the world's most recognisable financial institutions.

The London, England headquarters of HSBC, a global universal bank, is located there. With a market capitalization of almost £2.5T (as of 2022) this British bank is the biggest in Europe.

Visit HSBC

Today, this financial institution provides a full range of banking, asset management, financing, and insurance products and services to corporations and individuals alike. As could be expected, the options for small company financing are quite diverse.

Your company's specific industry will determine the maximum credit amount you may apply for. If you're above the age of 35, you could qualify for special pricing. A minimum 10% security deposit on a property or other asset may be required.

Interest

Again, there will be a wide range of possible outcomes depending on the specifics of your company's situation, HSBC's existing interest rate standards, and the bank's reaction to the very unstable market conditions.

Whether or whether your loan is secured by collateral affects its terms and conditions. Due to the lack of security, the interest rate on an unsecured loan will be higher.

8. Lloyds Bank — UK business loan broker

In contrast to HSBC, Lloyds Bank is not a global institution. Rather, it has locations all throughout England and Wales.

However, it is still included among the UK's “big four” financial institutions. Indeed, it is the largest retail bank in Britain, with widespread availability of checking accounts, branches and automated teller machines (ATMs) across Wales and England.

Visit Lloyds Bank

Availability of services

This bank's key selling feature is its enormous branch network, which consists of 1300 locations throughout England and Wales. All of them provide banking and financial services. Guernsey, Jersey, and the Isle of Man make up the Channel Islands, all of which have their own local offices.

They are subject to stringent oversight from agencies like the Financial Conduct Authority and the Prudential Regulation Authority. In addition, it participates in the Financial Services Compensation Scheme and the Financial Ombudsman Service.

Overall, interest rates might be quite high if market pressures are extreme.

9. Bank of Ireland UK — Alternative business loan service

Another prominent commercial lender is the Bank of Ireland. One of the “Big Four” Irish banks, they are based out of Ireland. When discussing the four biggest banks in Ireland in terms of market capitalization, the phrase “big four” is often used. Naturally, these financial institutions serve both the Republic of Ireland and Northern Ireland.

Standard deposit and checking account services, overdraft protection, mortgages, international asset finance, debt financing, access to foreign currency markets, and small business loans are all part of the package.

Visit Bank of Ireland

The bank's history and liquidity are two major selling points. This is of great importance. Since it is a sizable institution, this bank may legally manufacture its own currency. Despite the fact that it isn't a traditional bank, it has this effect. Moreover, it participates in the European Banking Association as a member institution.

Loans

You'll need to apply to HSBC and other financial institutions with a wide variety of products and services to get an idea of your interest rate and likelihood of approval. Reportedly, small firms may apply for a loan to fund the purchase of equipment including copiers, telephones, and computers. Loans may also be used towards expansionary goals.

It's possible that you'll need to put up 10% collateral, such as a home, in order to get a loan. The Bank of Ireland may impose an application fee of up to £1,000 on applicants who are not permanent residents of Ireland. The market conditions, the outlook for your firm, and other factors will determine the competitiveness of the business loan.

Another old-school bank that can't compete with the likes of Monzo and Starling.

Top business loans brokers — Buying Guide

Let’s explore business loan services further as a topic.

What is a business loan broker?

A business loan broker acts as a liaison between borrowers and lenders. The business loan broker will learn about your company and financial objectives, then utilise their expertise in the field and their connections with lending institutions to source loan offers that best suit your needs.

Business loan brokers may contact lenders on your behalf, assisting you with the application process and answering any issues you may have as they arise.

There may be a price associated with using a broker, despite the fact that their services might save you time and get you better rates.

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Why do people choose bank loans?

1. Help your company expand.

To finance business growth before your company is profitable enough to do it on its own, consider applying for a bank loan. Getting a loan will allow you to implement your strategies and seize chances much sooner, speeding up the pace at which your firm expands.

Although the application and approval process for a bank loan might take many weeks or months, it is a viable option for acquiring capital for company expansion.

2. The business is entirely under your management.

Gaining access to working capital without giving up management control is the primary benefit of a bank loan, as well as any other kind of small business loan. If you want to pursue other financing strategies, such as equity finance, you will have to split future earnings with investors in exchange for quick cash.

A small business loan is intended to be a short-term financial solution; once repaid, the borrower will no longer owe any money to the lending institution.

3. Reputation.

A bank's well-known brand and reliable reputation are two of the main reasons why customers choose it over competing lending institutions. Some smaller companies may feel more comfortable applying for a loan from a well-established financial institution like a bank.

Traditional brick-and-mortar banks may seem safer than the newer, online-only lenders at first glance, but as the latter continues to gain traction, the former may become less of a concern.

4. There will be no meddling from the bank.

A small business bank loan has the additional benefit of not limiting or restricting your firm's operations as long as the loan is being repaid.

To help the bank choose whether or not to grant you a loan, you will need to submit a business plan detailing the intended use of the money. Once you have the funds, though, you are free to alter your strategy as you see fit so long as you keep up with your loan payments.

5. Low, attractive rates of interest.

A small business bank loan can have better interest rates than what you'd get from an internet lender. If you need money for a longer period of time, a bank loan will almost always be more cost-effective than an overdraft, credit card, or personal loan.

If your company has been around for a while, has a solid financial track record, and has a high credit score, bank financing may be the most cost-effective alternative for you. Banks are more likely to accept your loan application and provide favourable interest rates the more established and successful your firm seems to them. You may save money on interest by taking out a secured loan.

The interest you pay is also tax deductible, which is a major feature of a bank loan for small companies.

In what ways do bank loans fall short?

1. Conditional acceptance.

A key drawback of a bank loan is that banks are often wary of providing loans to startups. Start-ups and other recently established businesses may have a hard time getting a loan from one of these institutions due to their stringent eligibility requirements and lack of established credit, revenue, and repayment records.

Therefore, the benefits of a typical bank loan are more likely to accrue to more established enterprises with a strong credit history and high development prospects.

2. Process of applying is time-consuming.

The time spent getting ready to apply for a company loan might be substantial. To prove that your company is a good bet for a lender, you'll need to complete out an application form with each one and include supporting documents like a business plan, bank statements, and projections.

When asking for a significant quantity of money, traditional banks might take a long time to review the application and make a judgement. This means that enterprises seeking a speedy infusion of funds may have a hard time doing so through a traditional bank loan.

3. Inadequate for day-to-day operations.

Another drawback of bank loans is that they are often only given for certain, growth-related projects or objectives and cannot be used for day-to-day operations. Lending institutions seek for enterprises that will put their funds to good use by investing, expanding, and reaping profits in order to ensure their own repayment.

Other financing alternatives, such as overdrafts, credit cards, or working capital loans, may be more suited for a small company seeking finance to address a temporary cash flow crisis or seeking a short-term infusion of cash.

4. There is danger involved with unsecured loans.

It's important for companies to note that taking out a secured business loan from a bank, with its lower interest rates, puts their assets at risk should they fail to make the required repayments. While it's expected that companies will pay their loans on time, it's important to keep this in mind while shopping for financing.

Despite this danger, if you need to borrow money for your company, you should make arrangements so that you won't lose your home or other personal possessions if you can't make your loan payments.

However, if your company lacks collateral, some banks may still consider a loan secured by your personal assets. This kind of company loan, also known as a director's or personal guarantee, necessitates the use of a personal asset (such as your home) as collateral, which might put your home at danger if you were to default on your loan payments.

Leading business loan brokers: The Verdict

One thing that many new ventures and expanding small companies have in common is the need to raise capital.

Although it would be preferable if small firms could finance their expansion efforts from internal resources, the truth is that most do not. So ordinarily they would have to go elsewhere for help. There are a variety of financing choices available, but this begs the issue of which is best for your company and your particular circ*mstances.

Loans to companies are a widespread kind of financing, but even within this category, there is a great deal of variety. You may receive loans from online-only lenders with terms ranging from one to twenty-five years, in addition to the conventional high-street banks.

There is a wide variety of business loan options accessible. Start-up charges, building upgrades, new machinery, employee expansion, inventory purchases, and other operating expenditures are all possible financing requests.

Lenders, particularly banks, recognise that firms have varying financing requirements and have created a wide range of loan products to meet those needs. These include asset financing, invoice financing, and working capital loans.

For more, see our top business loan accounts.

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