Business Funding for Limited Companies UK 2026

The short answer

A typical UK limited company with 12 months of trading and £100,000+ turnover can borrow £5,000 to £500,000 unsecured, decided in 24 hours and funded in 1 to 2 working days.

The cheapest options are bank term loans and the British Business Bank Growth Guarantee Scheme (7 to 10 percent APR), followed by specialist online lenders (8 to 18 percent APR), then merchant cash advances and short-term facilities (factor rates of 1.1 to 1.45). Directors usually sign a personal guarantee on unsecured loans below £250,000.

Why limited companies have more funding options than sole traders

Three structural reasons:

Filed accounts. A Ltd files annual accounts and a confirmation statement at Companies House. Lenders can read your turnover, profit, balance sheet, and history. Sole traders have no equivalent public record.
Commercial credit file. Limited companies build a separate commercial credit profile (Experian Business, Creditsafe, Dun & Bradstreet). This unlocks higher unsecured limits.
Director personal guarantees. Lenders take a personal guarantee from one or more directors as an additional layer of security, which lets them lend more, more cheaply, than to a typical sole trader.

Every realistic UK business funding option for a Ltd in 2026

1. Unsecured business loan

Amount: £5,000 to £500,000
Term: 6 months to 6 years
Cost: 8 to 18 percent APR equivalent
Speed: 24 to 48 hours
Best for: Growth, equipment, marketing, working capital
UK lenders: iwoca, Funding Circle, Tide, Capify, Allica Bank, Cubefunder, esme Loans

2. Secured business loan

Amount: £25,000 to £5,000,000+
Term: 1 to 25 years
Cost: 6 to 12 percent APR
Speed: 1 to 4 weeks (valuations)
Best for: Larger amounts, longer terms, asset purchases
UK lenders: NatWest, HSBC, Lloyds, Allica, Shawbrook, OakNorth, YouLend (secured)

3. Merchant cash advance (MCA)

Amount: £3,000 to £500,000 (typically 50 to 150 percent of monthly card turnover)
Term: 4 to 18 months
Cost: Factor rate 1.10 to 1.45 (so a £20,000 advance repays £22,000 to £29,000)
Speed: Same day to 24 hours
Best for: Card-sales-heavy businesses (hospitality, retail, beauty, ecommerce)
UK lenders: YouLend, iwoca, 365 Finance, Capify, Liberis

4. Invoice finance

Amount: Up to 85 to 90 percent of unpaid B2B invoices
Cost: 1 to 4 percent per invoice fee plus an interest rate of around 2 to 4 percent above base
Speed: 24 to 48 hours per invoice once the facility is open
Best for: Businesses selling B2B on 30 to 90 day terms
UK lenders: Bibby, Aldermore, Nucleus, MarketFinance, Tide Invoice

5. Asset finance

Amount: £1,000 to £5,000,000 (against the asset value)
Term: 1 to 7 years, matched to the asset life
Cost: 6 to 14 percent APR equivalent
Speed: 24 hours to 2 weeks
Best for: Vehicles, machinery, IT equipment, fit-out
UK lenders: Aldermore, Close Brothers, Shawbrook, United Trust Bank

6. Revolving credit facility

Amount: £1,000 to £150,000
Cost: 12 to 24 percent APR equivalent on drawn balance
Speed: 24 to 48 hours to open, then instant draws
Best for: Day-to-day cash flow management
UK lenders: iwoca Flexi-loan, Capital on Tap, Tide Credit Builder

7. VAT and tax loans

Amount: The size of the bill (typically £5,000 to £250,000)
Term: 3 to 12 months
Cost: 6 to 14 percent of borrowed amount
Speed: 24 to 48 hours
Best for: Spreading a one-off HMRC bill
See: our VAT loan guide

8. Start Up Loans (government-backed)

Amount: £500 to £25,000 per director (up to £100,000 per business with 4 founders)
Term: 1 to 5 years
Cost: Fixed at 7.5 percent APR (raised from 6 percent on 6 April 2026)
Speed: 3 to 6 weeks (business plan and mentoring required)
Best for: Companies trading up to 60 months (extended from 36 months in April 2026)

9. Growth Guarantee Scheme (British Business Bank)

Amount: Up to £2,000,000 per business group
Term: Up to 6 years
Cost: Lender-priced but typically 7 to 12 percent APR (the government guarantees 70 percent of the loan)
Speed: 2 to 6 weeks
Best for: Established Ltds that have outgrown unsecured online lenders
Eligibility: UK Ltd, viable business, turnover under £45 million
Scheme runs until: 31 March 2030 (extended from March 2026 in the 2026 Spending Review)

Not sure which funding fits?

A 5 minute call. We will ask what the money is for, your monthly turnover, and your timing. We come back with the 2 or 3 products that actually fit, and the lenders most likely to approve you.

Call 0333 041 3933 Get a free quote

Free contract review. No obligation. We compare quotes across the UK's leading providers.

Eligibility: what UK lenders look at in 2026

For a UK limited company applying for a typical £25,000 unsecured loan, the standard underwriting screens are:

Criterion	Typical requirement (2026)
Trading history	12 months minimum (6 months on specialist lenders)
Annual turnover	£100,000+ (some lenders £50,000)
Bank conduct (last 3 months)	No bounced Direct Debits, minimal unauthorised overdraft use
Company commercial credit score	50+ out of 100 (Experian / Creditsafe)
Director personal credit	600+ on Experian / Equifax
HMRC standing	Up to date on PAYE, VAT, and corporation tax
CCJs and defaults	Settled, disclosed, ideally over 12 months old
Director personal guarantee	Standard on unsecured loans under £250,000

Director personal guarantees: what you need to know

Almost every unsecured business loan to a UK limited company under £250,000 requires a personal guarantee from at least one director. What that means in practice:

You are personally liable if the company defaults.
The guarantee usually covers the full loan amount, not a percentage.
The lender can pursue your personal assets (your home is usually not directly secured but is reachable through a money judgment).
If you have a spouse or business partner, both signatures are sometimes required.
Guarantees can be limited by amount or by time if negotiated up front.

No-personal-guarantee facilities do exist for established Ltds (3+ years trading, £500,000+ turnover, strong commercial credit). Rates are typically 1 to 3 percentage points higher to compensate the lender for taking pure company risk.

How to apply for a UK Ltd business loan in 2026

Decide what the money is for and how much. Lenders ask, and the answer affects which product fits best.
Pull your last 3 months of business bank statements (or set up open banking access ready).
Check the company is up to date at Companies House (latest accounts filed, confirmation statement current).
Run a quick personal credit check on each director who will sign the guarantee.
Apply through a broker or directly to 1 or 2 specialist lenders. Avoid applying to 5+ lenders simultaneously, it leaves a credit footprint and harms approval rates.
Provide signed loan agreement and personal guarantee. Funds usually arrive same day or next working day.

Which UK lender is right for your limited company?

Quick rule of thumb in 2026:

Under £25,000, fast: iwoca, Tide, Capify, Cubefunder.
£25,000 to £150,000, fast: iwoca, Funding Circle, Allica, Capify, 365 Finance (MCA).
£150,000 to £500,000, mid-speed: Funding Circle, Allica, Shawbrook, OakNorth, NatWest.
£500,000+, secured: High-street banks, Allica, OakNorth, Shawbrook, Together (commercial property).
Card-sales-heavy business: YouLend, 365 Finance, iwoca MCA, Liberis.
Bad credit: Capify, Cubefunder, Just Cashflow, specialist MCA providers.

We work with all of the above and a few more. We will tell you which one suits your profile and apply on your behalf at no cost to you.

Frequently asked questions

What business funding options are available to limited companies in the UK in 2026?

UK limited companies in 2026 can access unsecured business loans, secured business loans, merchant cash advances, invoice finance, asset finance, revolving credit facilities, VAT and tax loans, government-backed Start Up Loans, and the British Business Bank Growth Guarantee Scheme. The right product depends on what the money is for and how quickly you need it.

How much can a UK limited company borrow?

A typical UK limited company with 12 months of trading and £100,000+ annual turnover can borrow £5,000 to £500,000 unsecured. Larger amounts up to £5 million are available with security or under the Growth Guarantee Scheme. Most lenders cap initial unsecured offers at 25 to 33 percent of annual turnover.

Do limited company directors have to give a personal guarantee?

For unsecured loans under £250,000, almost always yes. The personal guarantee makes a director jointly liable if the company defaults. Some specialist lenders offer no-personal-guarantee facilities for established companies (3+ years trading, £500,000+ turnover) but rates are usually 1 to 3 percentage points higher.

How fast can a limited company get business funding?

A straightforward unsecured business loan for a UK limited company can be approved in 1 to 4 hours and funded within 24 to 48 hours. Merchant cash advances are typically same-day on existing card processing data. Asset finance and secured loans take 1 to 3 weeks because they need valuations.

What credit score do I need for a UK limited company business loan?

Most mainstream UK business lenders want a company commercial credit score above 50 (out of 100) and director personal credit scores above 600. Specialist bad-credit lenders will work down to a director score of 500 but charge 1.4 to 1.6x factor rates rather than interest. Strong recent bank conduct will offset a weaker historic credit file.

Can a new limited company get funding in the first year?

Yes, but the options are narrower. Government Start Up Loans of up to £25,000 per director are available to companies trading up to 60 months (extended from 36 months in April 2026). Specialist lenders like iwoca and Funding Circle will lend from 6 months of trading with strong bank statements. Most mainstream banks want 12 to 24 months of filed accounts.

What is the cheapest source of business funding for a UK limited company?

For prime credit and established companies, a high-street bank term loan or the Growth Guarantee Scheme is usually cheapest at 7 to 10 percent APR. For most UK SMEs, specialist online lenders like iwoca, Funding Circle, and Capify sit at 8 to 18 percent APR. Merchant cash advances and short-term facilities are more expensive but faster and more flexible.

Related guides

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