January 28, 2026
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Lenders with lowest interest rate business loans

Lenders with lowest interest rate business loans

Find the best business loans with the lowest interest rates in the UK. Compare top lenders to secure affordable finance for your business growth in 2026.
Jesse Spence
Finance content writer / Market researcher

4 years of experience in market research. He focuses on turning lender criteria and market insights into practical, plain-English resources that help business ownersb improve approval chances and choose the right type of finance

Lenders with lowest interest rate business loans

For UK franchise buyers and operators, this guide compares loan periods and amounts, APRs, and terms across leading providers, with a focus on eligibility and fit. Amounts that could not be verified are left blank, prices accurate as of 2026-01-28.

1. Funding Agent

Funding Agent is focused on providing a straightforward comparison service for UK SMEs seeking various business finance options. It typically suits businesses looking for quick eligibility checks and simplified application processes. The platform offers flexible access across multiple product types without demanding collateral and supports a range of repayment options.

Loan Details

  • Min Amount: £10,000
  • Max Amount: £1,000,000
  • Min APR: 4%
  • Max APR: 20%
  • Loan Duration: 3–60 months

Services & Industries

  • Finance Types: Unsecured business loans, MCA Loans, Working capital
  • Industries: UK SME's

Pros

  • fastest and easiest application process
  • No collateral required

Cons

  • lower track record, only trading 1 year

Sources: Funding Agent

2. Barclays

Barclays provides a broad range of bank business loans with competitive rates and flexible terms. Its products primarily suit franchise buyers and established SMEs requiring secured or unsecured financing. The lender offers adaptable repayment schedules and access to multiple loan types, often requiring traditional credit assessments and potential security.

Loan Details

  • Min Amount: £1,000
  • Max Amount: £25,000
  • Min APR: 11.2%
  • Max APR: 34.5%
  • Loan Duration: 1 to 10 years

Services & Industries

  • Finance Types: Fixed rate loans, Variable rate loans, Business mortgages
  • Industries: Agriculture, Healthcare, Real estate, Technology

Pros

  • Established brand
  • Multiple loan types
  • No early repayment fees

Cons

  • High APR for certain amounts
  • Limited to UK businesses

Sources: Source

3. NatWest

NatWest specialises in small business loans for UK enterprises, offering quick access to funds. It is suitable for franchise buyers and SMEs looking for straightforward financing with manageable terms. NatWest loans typically require credit assessment and provide a balance of speed and flexible repayment options.

Loan Details

  • Min Amount: £1,000
  • Max Amount: £250,000
  • Min APR: 10%
  • Max APR: 15%
  • Loan Duration: 1 to 7 years

Services & Industries

  • Finance Types: Small business loans, Start-up loans
  • Industries: Legal, Real estate, Financial services

Pros

  • Quick fund access
  • Supports a wide range of businesses

Cons

  • Higher APR
  • Limited loan products

Sources: Source

4. Funding Circle

Funding Circle is a peer-to-peer lending platform focusing on term loans for SMEs in the UK. It is generally suited for established businesses rather than start-ups. The platform offers competitive rates with flexible terms, requiring a solid credit profile and no traditional collateral, with straightforward repayment structures.

Loan Details

  • Min Amount: £10,000
  • Max Amount: £750,000
  • Min APR: 6.9%
  • Max APR: 15%
  • Loan Duration: 6 to 72 months

Services & Industries

  • Finance Types: Term loans, Peer-to-peer loans
  • Industries: SMEs

Pros

  • Fast processing
  • No early settlement fee

Cons

  • Not suitable for start-ups
  • Requires a solid credit profile

Sources: Source

5. iwoca

iwoca provides short-term and flexible business loans for a diverse range of UK SMEs. It typically suits businesses needing working capital or quick access to funds. Loan offerings include discretionary terms with variable rates, focusing on speed and accessibility, often without traditional collateral.

Loan Details

  • Min Amount: £1,000
  • Max Amount: £1,000,000
  • Min APR: 6%
  • Max APR: 15%
  • Loan Duration: 1 to 24 months

Services & Industries

  • Finance Types: Short-term loans, Working capital
  • Industries: Retail, Hospitality, Services

Pros

  • Very fast approval
  • Flexible discretionary terms

Cons

  • Higher rates for extended terms

Sources: Source

6. Metro Bank

Metro Bank offers fixed-rate commercial loans and business banking solutions suited for growing UK SMEs. Their products focus on predictability and transparent fees, suitable for enterprises that prefer straightforward lending with clear repayment terms. Collateral requirements and eligibility depend on the loan type.

Loan Details

  • Min Amount: £2,000
  • Max Amount: £60,000
  • Min APR: 9.6%
  • Max APR: 9.6%
  • Loan Duration: 1 to 5 years

Services & Industries

  • Finance Types: Commercial loans, Term loans
  • Industries: Retail, Hospitality

Pros

  • User-friendly service
  • Transparent charges

Cons

  • Limited maximum loan amount

Sources: Source

7. Virgin StartUp Loan

Virgin StartUp Loan specialises in funding and mentoring support for UK startups. It is most suitable for new businesses seeking low fixed-rate loans with guidance. The scheme focuses on ease of access and supportive services, with defined loan durations and fixed APRs.

Loan Details

  • Min Amount: £500
  • Max Amount: £25,000
  • Min APR: 6%
  • Max APR: 6%
  • Loan Duration: 1 to 5 years

Services & Industries

  • Finance Types: Start-up loans
  • Industries: Startups

Pros

  • Mentoring support
  • Fixed low rate

Cons

  • Targeted only at startups

Sources: Source

8. British Business Bank

British Business Bank offers government-backed support for small UK businesses through debt and equity programmes. It is aimed at new and growing enterprises needing accessible finance with manageable terms. Products typically feature fixed APRs and support a broad range of sectors without complex security requirements.

Loan Details

  • Min Amount: £500
  • Max Amount: £25,000
  • Min APR: 6%
  • Max APR: 6%
  • Loan Duration: 1 to 5 years

Services & Industries

  • Finance Types: Start-up loans, Small business finance
  • Industries: Various

Pros

  • Supports new businesses
  • Government-backed

Cons

  • Limited loan products

Sources: Source

9. Simply Business

Simply Business is primarily known for business insurance but offers financial solutions including loans tailored for small UK enterprises. It is suited for businesses seeking straightforward finance with some flexibility on repayment options. Loan values tend to be moderate, supporting various industries with user-friendly service.

Loan Details

  • Min Amount: £1,000
  • Max Amount: £25,000
  • Min APR: 6%
  • Max APR: 9.1%
  • Loan Duration: 1 to 10 years

Services & Industries

  • Finance Types: Business loans, Small loans
  • Industries: Various

Pros

  • Tailored advice
  • User-friendly service

Cons

  • Loan value limitations

Sources: Source

10. Merchant Savvy

Merchant Savvy specialises in sourcing competitive finance options for UK businesses, focusing on unsecured loans and revenue-based finance. It typically suits businesses seeking affordable finance with flexible eligibility. The platform offers access to multiple lenders, helping clients find terms that match their cash flow and working capital needs.

Loan Details

  • Min Amount: £500
  • Max Amount: £25,000
  • Min APR: 6%
  • Max APR: 9.6%
  • Loan Duration: 1 to 5 years

Services & Industries

  • Finance Types: Unsecured loans, Revenue-based finance
  • Industries: Various

Pros

  • No application fees
  • Low entry requirements

Cons

  • Limited to lower loan amounts

Sources: Source

How to choose

When selecting lenders with the lowest interest rate business loans, consider your loan amount needs and budget for repayments. Evaluate eligibility criteria carefully to ensure qualification. Balance the speed of funding against loan flexibility and repayment options. Assess the requirement for collateral or security and understand any early repayment fees or penalties. Consider how the loan fits your franchise cash flow and seasonal business cycles to avoid cash shortages.

Conclusion

Choosing the right lender depends on your business type and loan purpose. Banks offer structured products suitable for established businesses needing larger or secured loans, while brokers like Funding Agent provide access to multiple lenders for faster comparisons. Specialists focus on startups or niche sectors with tailored financing. Understanding your priorities around speed, flexibility, and collateral helps in selecting the best fit. This guide highlights providers for typical loans up to 200 thousand pounds to aid your decision.

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FAQs

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1Funding AgentFunding Agent helps UK SMEs compare business finance options fast, with a simple application journey and quick eligibility matching.£10,000–£1,000,000; 4%–20% APR; 3–60 months
2BarclaysBarclays offers a wide range of business banking loans with competitive interest rates and flexible terms.£1,000–£25,000; 11.2%–34.5% APR; 1 to 10 years
3NatWestNatWest provides small business loans to UK companies with quick access to funds.£1,000–£250,000; 10%–15% APR; 1 to 7 years
4Funding CircleFunding Circle is a leading peer-to-peer lending platform offering competitive loans to small and medium-sized enterprises.£10,000–£750,000; 6.9%–15% APR; 6 to 72 months
5iwocaiwoca offers flexible short-term business loans to a variety of SMEs across the UK.£1,000–£1,000,000; 6%–15% APR; 1 to 24 months
6Metro BankMetro Bank offers comprehensive business banking solutions including fixed-rate loans to support business growth.£2,000–£60,000; 9.6%–9.6% APR; 1 to 5 years
7Virgin StartUp LoanVirgin StartUp Loan provides funding and mentoring for startups in the UK, offering loans up to £25,000 at a fixed 6% APR.£500–£25,000; 6%–6% APR; 1 to 5 years
8British Business BankThe British Business Bank provides financial support to UK-based small businesses through a variety of debt and equity programmes to stimulate business growth.£500–£25,000; 6%–6% APR; 1 to 5 years
9Simply BusinessSimply Business is a major UK player in business insurance offering various financial solutions.£1,000–£25,000; 6%–9.1% APR; 1 to 10 years
10Merchant SavvyMerchant Savvy helps UK businesses find competitive finance solutions and low-cost business loans.£500–£25,000; 6%–9.6% APR; 1 to 5 years