How to get a business loan

To get a business loan for your business, there are a few things you need in place before applying.

A business loan can be the engine that powers expansion, smooths cash flow or funds new equipment. Only about 45% of UK SMEs used external funding in 2024, meaning many rely on savings or delayed investment. Government programmes do exist, such as the Growth Guarantee Scheme (which Rise Funding offers), as well as the UK’s Start Up Loans scheme, which has provided over £1 billion to more than 100,000 new businesses. 

In this article, we outline how to get a business loan, how to assess your financing needs, all the different types of loans you might need, and how to prepare your application to get a business loan that is right for you.

Assess your financing needs

Before you get a business loan, it is important to build a picture of exactly what your requirements are to best help lenders. This way, your application process will be as smooth as possible.

Identify your funding needs

Before talking to lenders to get a business loan, clarify exactly why you need a loan. Are you buying stock, machinery, or covering a cashflow gap? Lenders will want to know the intended use of the funds. Be specific: for example, “£20k to expand into a new market” or “£10k to replace a delivery van.”

The British Business Bank advises explaining exactly how you will use the money – a clear plan showing the loan’s purpose will strengthen your application.

Calculate how much to borrow

To successfully get a business loan, you need to determine how much you can borrow and repay. This should match the revenues and expenditures you have projected. You can then use a calculator to determine how much you can repay each month. You need to determine how much you can pay each month without affecting your cash flow negatively. This will also be taken into consideration by the lender, and you should have this prepared.

If you are not sure how much you need to borrow, or how much you can borrow, then this is something we can assist with at Rise Funding.

Explore loan options

To get a business loan, it is crucial to assess a range of options before making a final decision – don’t rush into anything.

There are many different types of loans, each suited to different businesses and situations:

Secured vs unsecured loans

There are different types of business loans, but they can be broadly classified into secured loans, which require collateral, and unsecured loans, which do not require any collateral. While a secured loan requires collateral, it provides a lower interest rate as there is less risk involved for the lender. On the other hand, an unsecured loan does not require any collateral, but it has a higher interest rate due to the greater risk involved in lending money without any security.

Term length and interest rates

Next, let’s look at the term of the loan and the structure of the interest. A short-term loan, which is typically several months to a few years, offers a higher repayment each month with potentially less total interest. A long-term business loan has a term of likely 72 months, reducing the amount repaid each month but increasing the total interest.

Government and alternative finance

Don’t overlook special schemes and niche lenders. There are many government schemes which are specifically designed to help SMEs get a business loan that works for them.

The Growth Guarantee Scheme (GGS) is a UK government-backed program designed to help UK SMEs access funding.

The GGS is only available to UK businesses that have been trading for at least two years and have an annual turnover of less than £45 million. It is designed to grow the small business sector in the UK and give support where it is needed.

There is also the Start Up Loans programme, which offers government-backed, fixed-rate funding to new businesses. Other options include bridging loans (short-term loans often used for property purchases) or invoice finance (borrowing against unpaid invoices). These products have different costs or criteria, but they can fill specific needs when a standard loan isn’t suitable. It pays to consider all available options.

Choose the right lender

There are two main routes to finding a lender to get a business loan: finding them individually or using a loan specialist such as Rise Funding.

Banks vs alternative lenders

Now that your loan requirements are clear, you need to determine the place to apply. Banks such as Barclays, Lloyds, HSBC, etc., have a set procedure and usually strict criteria (good credit history, trading history, collateral). New challenger banks and online lenders now account for around 60% of small business lending in the UK. They might be easier to deal with and may also process your application faster.

Using a loans specialist

You don’t have to approach lenders one by one to get a business loan. A finance specialist like Rise Funding can match you with suitable lenders quickly. Brokers in the UK arrange around 67% of UK SME loans by knowing which lenders fit each case. They submit your information to multiple lenders on your behalf, saving you time and boosting your approval chances.

You also have the benefit of:

• Access to more lenders, including those that don’t accept direct applications
• Positioning your proposal to give it the best chance of approval
• Saving time, as you will only need one application process, which is sent to multiple lenders (whilst not affecting your credit)
• Negotiating with more influence, as your application is coming from a verified source

We can pinpoint the most appropriate lenders based on your exact needs and circumstances, which could otherwise take weeks of research and mistakes.

In practice, using a specialist like Rise Funding means you get offers from lenders better suited to your sector and loan size without doing all the legwork yourself. You also have a higher chance of approval.

What lenders look for

Different lenders have different appetites, but all will assess similar factors. They typically check your credit history (business and personal), trade record (how long you’ve been trading), financial health (profit, loss and cash flow), and security (assets or guarantees).

Strong signals include steady revenue growth, consistent profits, affordability in bank balances, and any collateral you can offer. Before you apply, resolve any credit or tax issues and ensure your accounts are in order – lenders want to see a clean financial picture.

In this video, we discuss some of the finer points about what lenders look for in a business loan application.

Preparing your application

Preparing your application is a crucial step in the process to get a business loan, and often SMEs will get their application wrong, resulting in rejection and delays to funding.

We help you get everything ready before your application. Here are some of the steps we will take in order to prepare your business loan application.

1. Gather financial documents

Lenders will want to see your recent financials. Typically, this means bank statements, management accounts (profit & loss and balance sheet), and last filed accounts. Ensure all figures are accurate and up to date. It’s wise to also prepare a brief business plan or cashflow forecast explaining how you will use the funds and repay the loan. Having this documentation ready before you apply will make the process much smoother.

2. Check your credit history

Obtain your business and personal credit reports and check them for errors. A strong credit score will usually secure better loan terms, and you might be surprised to know that in some cases, personal credit score is more important than business credit score.

If you see any old defaults or mistakes, try to correct them before you apply. Likewise, settle any small outstanding debts you can – this shows lenders that you manage your finances responsibly. A solid credit profile demonstrates your credibility.

3. Refine your proposal

Write a clear, concise case for your loan, and why you need to get a business loan. State exactly how much you need and why, using realistic figures. For example, say “£30k to purchase new machinery that will increase capacity by 20% and add £50k per year to turnover.” Attach any relevant data (sales forecasts, market research, contracts) to back up your claims. A well-supported proposal shows you’ve done your homework and are confident in your projections. To get a business loan, you must explain to a lender how the loan will benefit your business, and be a benefit to both them and your business.

Submit and follow up

After submitting your application, there is a subsequent process from the lenders, which requires follow-ups and, in some cases, pushbacks to the lenders. 

With Rise Funding, we fight your corner, and you may get a business loan in as little as 24 hours, depending on the lender and the terms.

After you submit

Once your application is complete, submit it to your chosen lender(s). Many banks and online lenders allow direct online applications; if you’re using Rise Funding, we will handle submission for you. After submission, expect a review period – some lenders decide in a few days, others may take a couple of weeks. During this time, keep an eye on your email or portal messages and answer any lender requests quickly. 

Fast communication can help avoid unnecessary delays, and with a loans specialist like Rise Funding, you will potentially have access to faster turnarounds, because we chase on your behalf, negotiate and keep you updated throughout.

Reviewing offers

You may then be offered one or more loans. It is essential that you compare the offers carefully before making your decision. This should include the rate (fixed or variable), the length of the loan, and any fees (arrangement fee, annual fee, or penalty for repaying the loan early). It may be that a slightly higher rate with no fees is better for you, compared with a low rate with large fees. You may also wish to ensure that you can repay the loan without penalty.

Before you accept and get a business loan immediately, you should consider the term versus the rate. A rate for a longer-term loan may look better and have a lower monthly repayment, but total repayment may be higher than for a short-term loan. It could also mean that access to further funding may take longer.

You may also need to consider if there are any early repayment savings, and how interest compares to capital in your monthly repayments. 

If you are confused or concerned about this, then at Rise Funding, this is exactly where we can help you. Get an instant quote from our website, and one of our specialists will be in touch about the best funding options available.

Dealing with rejection

If your application is declined, don’t be discouraged. Common reasons include low turnover, insufficient profit or cash flow, or a short trading history and credit. Use any feedback to improve – for example, boost your cash reserves or reduce debts – then try again, possibly with a different lender. Many businesses secure funding after refining their proposal or approaching another lender.

Also, check if the rejection reason is fair and appeal if you feel you have evidence to show otherwise. A specialist like Rise Funding will also look to appeal on your behalf if there is justification and can have an influence over this.

Benefits of a specialist

A specialist will help you prepare and polish your application so that it meets the requirements of the lender. Instead of you filling in multiple forms, we will submit your proposal to several lenders. This will save you time and prevent you from leaving anything out. In other words, we will help you by providing our expertise, while you continue to run your business.

Selecting the right lenders

At Rise Funding, we know which lenders are most likely to fund your business. We match your sector, size and needs to lenders who specialise in companies like yours. For example, if one bank considers your business too new, we can approach another lender that often backs startups. This targeted approach often secures approvals faster. When offers come in, we’ll explain your options so you can choose confidently and get a business loan when you need it most.

Next steps to get a business loan

The process to get a business loan may seem complex, but with the right preparation, it becomes straightforward. To recap: identify exactly why and how much you need, prepare your financial documents, and compare your loan options. Then apply through the best lender or use a specialist to handle it for you.

For more guidance, see our articles on the top business growth strategies in 2026 and how to come up with a small business idea. When you’re ready to apply, let Rise Funding help – we’ll review thebenefits of a business loan, refine your application, and connect you with the right lenders. Then you can secure funding quickly and focus on growing your business.

To discuss your options, whether it be a to get a business loan, cashflow funding or others, you can call one of Rise Funding’s experts for individualised advice. Contact us through the form below, or get an instant business quote by completing our online questionnaire.