Business Loan Broker

A business loan broker is an intermediary who takes the details of your business and its directors, matches you to the lenders most likely to say yes, submits the application on your behalf and negotiates the offer with the underwriter.

The practical value is threefold. We know which funders will look at your sector, your trading history and your credit profile before an application is made — so you avoid the credit searches that come with speculative applications. We reach specialist lenders that do not accept business direct. And we handle the underwriter dialogue, which is where most declines are actually recoverable.

The process usually looks like this:

1. Fact find — what you need, what for, and when
2. Source the right lender or lenders
3. Submit the application
4. Receive the quote and offer
5. Complete the paperwork
6. Loan pays out

Three reasons that hold up in practice:

• Access. A large part of the UK specialist lending market is intermediary-only. Those funders are not on comparison sites and will not take your call directly.
• Fewer wasted credit searches. Multiple declined applications leave a footprint that makes the next lender more cautious. Checking criteria before applying avoids that.
• The offer, not just the approval. Rate, term, fee and early repayment terms are all negotiable, and an underwriter treats a broker-packaged case differently from a cold application.

Where a broker adds nothing, we will say so. If your bank will do it cheaper, take the bank’s money.

We do not charge broker fees on unsecured business loan applications. We are paid a commission by the lender for the introduction, and that covers the cost of the service.

On secured and property-backed lending a fee may apply, depending on the complexity of the case. If one does, we tell you the amount in writing before any application is submitted — never afterwards, and never taken out of the advance without you knowing.

A lender advances your business an agreed sum, which is repaid over an agreed term. Terms run from 3 months to 7 years on unsecured lending, and up to 10 years where the loan is secured on property.

Each monthly repayment is part capital and part interest. At drawdown you should receive a repayment schedule setting out every payment due, the interest included in each, and the closing balance. Ask for it if it is not offered.

Loans can be unsecured, relying on trading history and usually a personal guarantee, or secured against an asset such as property. Secured lending is cheaper and can go larger, because the lender’s downside is covered.

Some lenders allow early settlement charging interest only for the months used. Others charge the full contracted interest whenever you redeem. This single clause can be worth more than a percentage point on the rate, so check it.

An unsecured business loan takes no charge over property or assets. The lender is underwriting your trading record and, in most cases, taking a personal guarantee from a director instead.

On trading history, the market tiers roughly like this:

• 6 months trading — the practical minimum, and only a handful of funders will look at it
• 12 months of filed accounts — opens up most of the market
• 2 to 3 years of filed accounts — best rates and the largest facilities

Facilities run from £10,000 to £10 million, repaid monthly over 3 months to 7 years, with rates from 6.9% per annum for the strongest cases and considerably higher where the risk is greater.

It depends principally on whether the loan is secured, and on how the lender reads your risk.

• Secured business loans — from around 4% per annum, because the lender can recover against the asset
• Unsecured business loans — from 6.9% per annum for strong, established, profitable businesses
• Short-term and higher-risk lending — can reach 2–3% per month, which is a very different proposition and should only be used where the need is short-dated and the return is clear

What moves your rate: length of time trading, sector, recent financial performance, turnover and profitability, business credit rating, and the directors’ personal credit standing.

Compare total cost, not headline rate. A 6.9% loan over five years and a 12% loan over three years can cost almost the same in interest — see the worked examples above.

To find out what your business would actually be charged, contact us for a quote.

On a capital and interest loan with no arrangement fee:

• £50,000 over 3 years at 12% per annum — about £1,661 a month, £9,786 total interest
• £50,000 over 5 years at 6.9% per annum — about £988 a month, £9,262 total interest

Note that the total interest is nearly identical, even though one rate is almost double the other, because the cheaper loan runs for twice as long. The real difference between those two offers is monthly cash flow, not cost.

Add any arrangement fee on top — typically 1% to 5% of the facility, and often deducted from the advance rather than added to the balance, so a £50,000 loan with a 3% fee puts £48,500 in your account.

These figures are illustrative. Your rate depends on trading history, sector, performance and credit profile.

For a straightforward unsecured loan, offers can come back within 24 hours and funds can be drawn within a few days. Secured lending takes longer — typically 2 to 6 weeks, because a valuation and legal work are involved.

What speeds it up is having the paperwork ready at the outset:

• Last 3 months of business bank statements
• Most recent filed accounts, plus management figures if the accounts are more than 9 months old
• The amount you need and what it is for
• Directors’ names, dates of birth and home addresses for the last 3 years

The single biggest cause of delay is a slow response to an underwriter’s question. If we come back to you asking for one document, that document is usually the only thing standing between you and an offer.

Any legitimate business purpose. Common ones:

• Buying stock or funding a customer order
• General cash flow and working capital
• An urgent VAT or corporation tax bill
• Refitting or fitting out premises
• Office equipment, machinery or vehicles
• A marketing campaign
• Expansion, a new site, or hiring ahead of revenue
• A large unexpected bill
• Spreading the cost of a purchase
• Refinancing more expensive existing debt

Lenders will ask what the money is for and they do check. A clear, specific purpose — with the return it generates — materially improves your chances over a vague request for working capital.

Often yes, though the rate will reflect the risk and the facility may need security.

What matters far more than the adverse itself is the story around it: how old it is, whether it is satisfied, whether it was a genuine dispute, and whether current trading shows the problem is behind you. A settled CCJ from three years ago on a business now trading profitably is a very different case from an unsatisfied one filed last month.

Disclose everything upfront. Lenders find it anyway, and an adverse entry you volunteered is a conversation, while one they discover is a decline.

More detail here: business loans for bad credit, business loans with a CCJ, and business loans during a CVA.

On unsecured business lending, usually yes. Most lenders will ask at least one director or owner to give a personal guarantee.

A personal guarantee makes you personally liable for the debt if the company cannot repay it. It is not a mortgage over your home and it does not give the lender an automatic charge over your property — but it is a real obligation that outlives the company, and it can be enforced against your personal assets.

Three things to establish before you sign:

• Is it capped? A guarantee limited to a fixed amount is very different from an unlimited one.
• Is it joint and several? If so, the lender can pursue any one guarantor for the whole amount, not a share of it.
• Does it cover future borrowing? Some are drafted to extend to further facilities you have not yet taken.

Personal guarantee insurance is available from third parties and typically covers a proportion of the guaranteed sum. Where a guarantee is the sticking point, tell us — a small number of funders will lend without one, usually against security or at a higher rate.

For most unsecured lending under £100,000, no. Lenders make the decision on bank statements, filed accounts and credit data, and a full plan will not be read.

A plan starts to matter on larger facilities, on Growth Guarantee Scheme applications, where the money funds something that has not yet generated revenue, and wherever a human credit committee rather than an algorithm makes the call.

When one is needed, keep it short and make the numbers do the work: what you are borrowing, what it buys, what it earns, and how you repay it if the plan underdelivers by 30%. That last point is the one underwriters look for and the one most plans leave out.