Guide by business size
Small Business Loans for UK Businesses
A “small business loan” isn’t a separate type of loan. It’s usually the same business loans and finance any company can apply for, sized for a smaller business. What changes when your company is smaller is how a lender sees it, and which route fits best.
This guide explains funding for smaller UK businesses, including how size and trading stage affect the options. Wize Finance can also discuss startup referrals if you have not started trading.
Wize Finance can help smaller UK businesses access suitable funding through its referral route. You can enquire before or after you start trading; the options and provider criteria depend on your stage and needs.
Tell us the amount, what it's for and how your business is set up. The team reviews your enquiry and talks you through the routes that may fit.
Not trading yet? Start with startup business loans.
Which route fits your situation?
- One-off need
- Ongoing access
- Day-to-day cash
What counts as a small business?
There’s no single definition, and lenders don’t use one shared definition either. Two official UK definitions are often quoted. They’re useful background, but neither decides whether a lender will lend to your company.
Lenders set their own criteria, which usually look at trading, finances and the purpose of the borrowing rather than a size label.For accounts filed at Companies House
A company counts as small if it meets any two of these: a turnover of £15 million or less, £7.5 million or less on its balance sheet, and 50 employees or fewer. A micro-entity is smaller still: any two of £1 million turnover or less, £500,000 or less on its balance sheet, and 10 employees or fewer. These bands decide what a company has to file, not what it can borrow.
For government statistics
Official business statistics count a small business as one with up to 49 employees, and a small or medium-sized enterprise (SME) as one with up to 249. On that measure, almost all private-sector businesses in the UK are small.
Which route fits a company your size?
Being small doesn’t point you to one kind of loan. It’s the situation that decides the route. Find the description closest to yours.
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Situation 1: Not trading yet
- Sounds like you if…
- You’ve set up, or are planning, a business but aren’t selling yet.
- What a lender may look at
- Your plans and forecasts, and you personally.
- Where to look
- Start with startup business loans, which explains the routes for businesses at the very start.
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Situation 2: Recently started trading
- Sounds like you if…
- You’ve made your first sales but don’t have much history yet.
- What a lender may look at
- Early bank statements and how the business is trading so far.
- Where to look
- New Business Loans explains how lenders may look at a young company.
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Situation 3: Established, with a one-off need
- Sounds like you if…
- Your company trades regularly and needs a set amount for something specific.
- What a lender may look at
- Your accounts, bank statements and what the money is for.
- Where to look
- A business loan may fit. The loan amount guides look at what different amounts involve.
Where Wize Finance can help
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Situation 4: Needing ongoing access to funds
- Sounds like you if…
- You need money on and off rather than once.
- What a lender may look at
- Your trading pattern and how you’d use the facility.
- Where to look
- A Business Line of Credit gives access to an agreed limit.
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Situation 5: Short of day-to-day cash
- Sounds like you if…
- Money for wages, suppliers or running costs is the pressure.
- What a lender may look at
- Cash flow and what’s causing the gap.
- Where to look
- Working Capital Loans cover cash to run the business.
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Situation 6: Taking most sales by card
- Sounds like you if…
- Much of your income comes through card payments.
- What a lender may look at
- Your card takings over time.
- Where to look
- A Merchant Cash Advance is repaid from future card sales.
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Situation 7: Waiting on invoices, or buying equipment
- Sounds like you if…
- Money is tied up in unpaid invoices, or you need a specific asset.
- What a lender may look at
- The invoices, or the asset being bought.
- Where to look
- Invoice Finance works from unpaid invoices. Asset Finance is tied to the equipment or vehicles you need.
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Situation 8: Dealing with credit problems
- Sounds like you if…
- The company or a director has had credit issues.
- What a lender may look at
- How the issue arose, and how the business is trading now.
- Where to look
- Bad credit business loans explains how lenders may look at past credit problems.
Whichever situation is closest, one enquiry covers it. Tell us the amount and what it's for, and the Wize Finance team will discuss the routes with you.
Start your enquiryWhat being smaller changes when you borrow
The loans are the same. What changes is what a lender can see, and what it may focus on.
A lender may see less about your company. Smaller companies can file simpler accounts at Companies House. A small company can choose not to file its profit and loss account, and a micro-entity may file only a simplified balance sheet. So a lender looking you up may find very little, and is likely to rely on what you give it: your full accounts, recent bank statements and, where you have them, up-to-date management accounts.
The directors may matter more. With fewer people and less history to go on, a lender may look closely at the directors’ own credit history, and may ask a director to give a personal guarantee. Our guide to business loans without a personal guarantee explains what a guarantee means.
Proportion matters more than size. A lender is less interested in whether your company is “big enough” than in whether the repayments fit what the business brings in.
Concentration may come up. A smaller company may rely on a few customers, one site or one key person. A lender may ask about this, so it can help to explain it up front: who your customers are, and what would happen if one of them left.
Being small isn't a reason to be turned down. What matters is whether the borrowing fits the business.
Know roughly what you need?
Tell us about your company and what the money is for, and see which types of finance may suit it.
Sizing the request for a smaller company
Before you think about which lender, it helps to be clear about three things.
- 01
What the money is for.
A specific purchase, a gap in cash flow and a growth project can each point to a different route. Being able to explain the purpose in a sentence or two helps any application.
- 02
How it will be repaid.
Think about where the repayments will come from: existing trading, the extra income the money should bring, or both. Then think about what happens if that income takes longer to arrive.
- 03
Whether the amount fits the business.
Ask for what you need, not the most you think you could get. A request that’s clearly in proportion to the company’s income and purpose is easier for a lender to understand.
If you need less than £10,000, a bank or another lender may be a better place to start.
What a smaller company can have ready
Because a lender may see little about a smaller company on the public record, what you can show matters more. A lender may ask for some or all of these.
Small business loan FAQs
Is it hard for a small business to get a loan?
It depends more on the business than on its size. Lenders usually look at how the company is trading, its finances, the directors’ credit history and what the money is for. A smaller company that can show steady trading and a clear purpose may have several routes to consider.
Is a small business loan a different kind of loan?
Usually not. “Small business loan” generally describes the same business loans and finance any company can apply for, used by a smaller business. Our Business Loans guide covers the main types and how they work.
What is the easiest small business loan to get?
No type of loan is easy to get, and the right one depends on what you need. A route that matches your situation, such as finance tied to card takings, invoices or a specific asset, may be a more natural fit than a general loan. The route map above can help you narrow it down.
How does SME lending work?
A small or medium-sized company applies to a lender, such as a bank or a specialist or online lender. The lender assesses the business and decides whether to lend, how much and on what terms.
Will I need to give a personal guarantee?
Some lenders may ask a director of a smaller company for a personal guarantee, because there’s less history to rely on. Requirements vary between lenders and products. Make sure you understand what a guarantee covers before agreeing to one.
Can a small business get a government-backed loan?
Some government-backed schemes are designed to help smaller businesses access finance. How they work, and who they’re for, changes from time to time. Government Business Loans explains the current schemes.
My company files simpler accounts at Companies House. Is that a problem?
Not in itself. Many smaller companies file abridged or micro-entity accounts. A lender may simply ask to see your full accounts, recent bank statements or management accounts instead, so it’s worth having them ready.
How Wize Finance works
Wize Finance uses the information you give us to understand what your company needs. Where appropriate, it introduces the business to a finance provider. The provider assesses the application and makes the decision.
For a smaller company, it helps to tell us:
- what the money is for
- roughly how much you need
- how long the company has been trading
- how most of your income comes in, for example invoices, card payments or both
After you submit your details, the Wize Finance team reviews your enquiry and contacts you to discuss your funding needs and next steps. Where appropriate, your details can then be shared with a suitable funding provider.
Ready to see what may fit your company?
Tell us about your business and what the money is for, and see which types of finance may suit it.