Business Growth Loans
There are plenty of business finance growth loans available to help you take your business to the next level. Learn more about business expansion loans, whether you're eligible and how to get one.
- Compare a wide range of lenders and rates
- Check your eligibility in minutes
- Find out how much you could borrow
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- What is a Business Growth Loan?
- Who should apply for a growth loan?
- Small business expansion loans
- Securing growth capital for small businesses in six steps
- How to finance business expansion with Capalona
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You might have a thriving small business at the moment, perhaps you’re a sole trader hoping to become a limited company, or an SME with grand plans to expand, opening new premises perhaps or extending your product range. But it takes more than ambition to scale - you need the funds to do it!
What is a Business Growth Loan?
A business growth loan is specifically designed for established businesses looking to invest significantly in their business. Rather than a loan that helps fund daily operations like filling short-term cash flow gaps, a business expansion loan is intended for strategic investment opportunities to transform your business quickly.
Who should apply for a growth loan?
37% of business owners applied for additional funding to develop their businesses. So if you’re considering it, too, you’re not alone. For many business owners, expansion might seem like a pipedream, but it’s more realistic than you think with the help of a business expansion loan.
Should you apply for one? If...
- You’re looking for a larger business loan
- You want longer-term financing options
- You’re an established business (sole trader, limited company, LLP, etc.)
Then a business growth loan could be a viable option for you.
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Small business expansion loans
Not all business expansion loans are suitable for every business. For example, you might have a great commercial asset portfolio, but you don’t necessarily want to put it at risk as collateral. Or perhaps you don’t mind signing a personal guarantee if it means you can apply for an unsecured loan and see funds quickly.
There are a few loan options to consider when financing small business growth:
Unsecured Business Loans
These loans are great if you don’t have commercial assets or you simply don’t want to risk them. Instead, you can apply (usually by signing a personal guarantee) and receive funds within two days. As there’s less paperwork involved in an unsecured business loan application, the process is more straightforward, and the lender sends funds much faster.
With our lenders, you can apply for an unsecured loan between £1,000 and £500,000. So if you’re hoping to overhaul your branding, hire a new team, or conduct some product development, this could be a pretty great loan option for you.
Bear in mind that interest rates are usually higher with unsecured loans.
Asset Finance
If you have assets, you can use them as collateral to apply for a loan. Or you can use asset finance to lease or enter into a hire purchase agreement to purchase new and expensive equipment that’ll improve the efficiency of your business operations. Basically, asset finance can be a great way to obtain high-value assets without forking out the full amount upfront.
Invoice Finance
Let’s say your invoicing terms are 30, 60, or even 90 days. Instead of waiting and waiting for invoice payment, you can unlock up to 95% of the unpaid amount almost immediately with invoice finance. This keeps cash flow healthy and predictable, improving forecasting and planning. You can use this cash to invest in your business expansion plans./p>
Commercial Property Finance
If you’re looking for finance that can support you as you purchase or develop commercial premises, consider commercial property finance. With this financing, you can purchase new office space, open up a new store, or invest in property to rent out for another income stream. Commercial property finance is a long-term financing solution.
Acquisition Finance
As part of your expansion plans, you might be planning a management buyout or acquiring an existing business. For that, you’ll need acquisition finance. To secure this funding, lenders will need to see a comprehensive business plan and projections to ensure their investment is sound.
Which option should you choose?
One loan might be perfect to help you achieve your business goals, or you might want to combine some options to keep investments separate. I.e. you might want a loan to help support your commercial renovation project, and invoice finance to free up some cash to invest in marketing campaigns.
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Securing growth capital for small businesses in six steps
To give you the best possible chance of loan approval, follow these six steps:
Step one: Develop a clear business plan
For a large loan, lenders will want to see your business growth plans, to make sure what you’re hoping to achieve is realistic (and, therefore, their investment is in safe hands!). In your business plan, include how you plan to use the funds and how those plans will help generate a return.
Don’t forget to include market research, a competitive analysis, and cash flow projections. This will all help you build a business case for the funds and demonstrate that you can comfortably afford loan repayments.
Step two: Get your finances in order
For some loans, particularly unsecured ones, the lender will analyse your financial history. This means running a credit check and getting a full picture of your business’s financial health. They need to know you can afford the loan repayments, plus interest. This means they’ll need to see consistent revenue, good profit margins, and great cash flow management.
If you do have a poor credit history, don’t worry. There are plenty of other loan options available to you where the lender isn’t necessarily as bothered about your credit score. For example, with invoice finance, they’re more concerned with your customers’ credit history.
Step three: Apply for a realistic loan amount
If you apply beyond your means, the likelihood is that the lender won’t approve your application. Remember, it’s not just the loan amount you must repay, it’s the interest, any loan processing or admin fees, etc.
Step four: Be prepared to answer to credit issues
As the lender will run a credit check, it’s important to have your explanations ready if you have any CCJs (County Court Judgements) or late and defaulted payments. If there’s anything you can improve on your credit report, consider doing it now. Improving your personal and business credit score can give you many more financial options and more competitive interest rates.
Step five: Understand how valuable your collateral is
When applying for a secured loan, you need to know what assets are available and how much value they hold. Assets might include commercial property, high-value equipment and machinery, stock, or IP (intellectual property).
If you're applying for a secured loan, understand what assets you have available and their value. This might include property, equipment, inventory, or even intellectual property. Having valuable collateral can significantly improve your approval chances and often secures better interest rates.
Step six: Compare your options
You might think about approaching your local bank for a small business loan. But traditional banks don’t always offer the most competitive loan terms or quickest decisions. Using an alternative lender can mean more choice, better terms, and more flexibility for UK SMEs.
Checking won’t affect your credit score
How to finance business expansion with Capalona
Finding the right business growth loan doesn’t have to mean endlessly sifting through hundreds of direct lenders. We compare a range of business loans for growth from trusted UK lenders to suit your expansion plans. Our comparison tool is self-serve, so you can start your comparison journey whenever you want and leisurely compare important figures like interest rates and total repayable. And there’s absolutely no obligation to accept any quote you see.
Why use Capalona?
- It’s free
- Getting a quote doesn’t affect your credit score
- You save time by comparing all options in one place
Ready? Find and compare business growth loans.
About the author
Adrian T
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Amazingly fast, efficient service, minimal paperwork. So much faster than my business bank of twelve years.
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