The UK borrowing picture in plain English

Small business borrowing in the UK typically sits between £5,000 and £500,000, scaling with your turnover, trading history, and security. For growth plans with robust financials, standard loans can reach around £1 million, while secured facilities can exceed this where strong assets and performance back the case. For earlier stage ventures, government-backed Start Up Loans provide a low-barrier route from £500 to £25,000 per person.

The practical ceiling for many SMEs is guided by affordability rules that benchmark borrowing around 25% of last year’s turnover. That keeps monthly repayments within the comfort of your cashflow. Lenders also weigh profitability, credit profile, and sector risk. For context, well-known providers illustrate the range: Funding Circle lists £10,000 to £750,000, NatWest offers up to £100,000 for smaller firms, and specialist brokers can open doors to multi-million facilities when the numbers stack up.

The takeaway is simple: your limit is not just a headline figure - it is what you can repay predictably without straining operations. Done well, finance is a lever for stability and scale, not a gamble.

Sensible borrowing starts with what you can repay in a slow month.

Rule of thumb: aim for funding that your existing cashflow can comfortably cover, not just your optimistic forecast.

Who should use this guide

If you run a UK start up, micro business, or established SME and want a level-headed view of how much you could borrow without overreaching, this guide is for you. It will help you translate lender ranges into real-world sums tied to your turnover and margins, and will show how different products fit different stages of your growth. Whether you are replacing equipment, smoothing seasonal cashflow, hiring, or pursuing expansion, you will find practical ranges and eligibility signals here. If you are unsure which option matches your risk appetite and timeline, we map the terrain so you can choose with confidence.

Routes to finance at a glance

1. Government Start Up Loan - £500 to £25,000 per person at a fixed 6% with 1-5 year terms, plus mentoring and business plan support.

2. Unsecured SME term loan - commonly £10,000 to £500,000 with fixed rates and 1-7 year terms, based on turnover, trading history, and affordability.

3. Marketplace lender loan - examples include £10,000 to £750,000 with rates from around 6.9% per year and calculator tools to model repayments.

4. High street bank small business loan - often £1,000 to £100,000 for firms with up to £2 million turnover, fixed monthly repayments.

5. Secured business loan - higher limits, often reaching or exceeding £1 million, secured against property or assets for lower rates.

6. Broker-arranged facilities - aggregated access to lenders for tailored solutions, from working capital to large expansion up to multi-million levels.

7. Asset finance and equipment loans - fund vehicles or machinery with repayments aligned to useful life, preserving cash.

What it could cost - and what you gain

Are you likely to qualify?

Eligibility in the UK hinges on three pillars: turnover, affordability, and track record. Many lenders cap borrowing around 25% of last year’s turnover to ensure your cashflow covers repayments without strain. Profitability and positive trends help, especially if your sector is cyclical. For unsecured SME loans, expect checks on trading time, bank statements, filed accounts or management figures, and your business and personal credit. Marketplace lenders often move quickly if the numbers are clear. High street banks may be stricter but reward stability with predictable fixed terms.

If you are at the idea or very early trading stage, government-backed Start Up Loans offer £500 to £25,000 per person at a fixed 6% with 1-5 year terms, plus mentoring and planning support. Multiple partners can apply, taking a single business up to £100,000 in total. For larger ambitions or asset-heavy plans, secured lending can stretch limits significantly where property or equipment strengthens the case.

Kandoo is a UK-based retail finance broker and can help you navigate these options, compare indicative limits across lenders, and align the product to your objectives and affordability profile.

From enquiry to funds in your account

1. Define the purpose, amount, and desired payback window.

2. Gather accounts, bank statements, and management information.

3. Calculate affordability using a 25% turnover benchmark.

4. Check personal and business credit for errors.

5. Compare products, terms, and early repayment rules.

6. Use lender calculators to stress test repayments.

7. Apply with complete documents and clear use-case.

8. Review offer, sign digitally, and plan drawdown.

Advantages and trade-offs

Read this before you sign

Before accepting an offer, reconcile your requested amount with the real purpose and expected return. If revenue uplift or cost savings are uncertain, scale the loan to the most conservative scenario, not the rosiest projection. Examine the full APR, including any arrangement or completion fees, and check how early settlement is handled. Some products charge interest to term, which can blunt savings if you repay early. Finally, pressure-test affordability against a slow quarter and a 10%-15% rate shock. Sensible buffers beat sleepless nights. If you are refinancing, confirm there are no hidden exit fees on your current facility and that covenants will remain achievable.

Alternative paths to consider

1. Business overdraft - flexible buffer for short-term working capital.

2. Invoice finance - release cash against unpaid invoices to smooth cashflow.

3. Asset finance - fund vehicles or equipment with the asset as security.

4. Merchant cash advance - repay as a percentage of card takings.

5. Equity investment - no repayments, but dilution of ownership.

6. Grants and incentives - non-repayable funds for innovation or training.

Your questions, answered

Q: How much can my small business realistically borrow? A: Many SMEs secure between £10,000 and £500,000. As a guide, lenders often set limits near 25% of last year’s turnover, subject to profitability and credit profile.

Q: I am a start up. What are my options? A: Government Start Up Loans offer £500 to £25,000 per person at 6% fixed with 1-5 year terms, plus mentoring. Multiple founders can apply up to £100,000 combined.

Q: How do banks compare with marketplace lenders? A: Banks can be competitive for established firms, often up to £100,000 with fixed repayments. Marketplace lenders typically offer faster decisions up to the mid six figures.

Q: Can I get £1 million or more? A: Yes, where financials are strong. Standard term loans can reach around £1 million, and secured lending can exceed this if assets and performance justify the risk.

Q: What rate should I expect? A: Rates vary by risk and product. Start Up Loans are 6% fixed. Many SME loans fall around 7%-16% APR, with marketplace rates from roughly 6.9% for strong cases.

Q: How do I check affordability quickly? A: Start with your monthly free cashflow. Stress test repayments against a slow month and use the 25% of annual turnover guide as an outer boundary, not a target.

How Kandoo helps you move faster

Kandoo connects UK businesses with a breadth of lenders, matching your goals to the right product and limit. We help you assess affordability, prepare a clean application, and compare real repayment scenarios so you can borrow confidently. Speak to us for tailored options and a clear path from application to funding.

Important information

This guide provides general information, not financial advice. Eligibility, rates, and limits depend on your circumstances and lenders’ criteria. Consider independent advice where appropriate and always check the full terms before committing.

Next step: map your cashflow, set a sensible ceiling, then compare offers with like-for-like APR and early repayment rules.