Best Long-Term Business Loans

Find the top long-term business loans for your SME, in this review by CompareBanks.

Updated: May 20, 2024
Matt Crabtree

Written By

Matt Crabtree

|
Rebecca Goodman

Edited By

Rebecca Goodman

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A long-term business or commercial loan might provide your company with the financial boost it needs to expand. The debt could be used to hire more staff, buy new equipment, or cover operating expenses.

In contrast, the strain on a company's cash flow from a short-term loan can restrict the amount of money a small or medium-sized business may borrow.

Therefore, a company loan with a longer term to pay back can be more cost-effective, although it also means you'll be paying interest for longer.

Here I've picked out some of the best long-term business loans to choose from, and also explained how they work, who they might be suitable for, and what to watch out for if you're considering taking one out.

ProviderScoreDetails
1. Tide★★★★★Click Here
2. Nest Business Loans★★★★★Click Here
3. Barclays★★★★★Click Here
4. Love Finance★★★★★Click Here
5. Mycashline★★★★Click Here
6. B2Bfinance Spotcap★★★★Click Here
7. NatWest★★★★Click Here

The pros and cons of long-term loans

In this section, I've summarised the drawbacks and advantages of long-term loans for your business.

Pros

✔️ Flexibility: you are free to put the money towards whatever use you see fit for your company

✔️ Lower rates of interest: long-term business loans may provide more advantageous interest rates than their shorter-term counterparts, although you will be paying back the loan for longer

✔️ Better repayment options: long-term business loans often have more flexible repayment arrangements, including a longer payback period  

✔️ Payments are set at the beginning of each month: repayments for long-term company loans are often set at a certain amount each month

Cons

❌️ Lenders may need collateral: it may be necessary to pledge collateral such as your house or car in order to get some long-term company loans

❌️ Expensive fees: additional expenses, such as origination costs, may be tacked on to your loan instalments

❌️ Extended, recurrent payments: if your monthly income drops, it might become difficult to repay your debts on time

Top long-term business loans for small businesses ― Reviewed

Here I've picked some of the most popular long-term business loans for SMEs. It's always worth checking to see if the service you intend to use is covered by the FSCS.

1. Tide ― Top long-term business loans with Open Banking

Open banking is used by Tide to provide loans to businesses of up to £15,000,000 in value.

Tide, which launched in 2015, is a safe business banking software designed to save time and money for micro and small enterprises.

Tide, on the other hand, provides its clients with access to a number of business loans and cash management resources. 

Cashflow Insights is Tide's portal where you may link your company bank account.

Tide's Cashflow Insights leverages open banking to evaluate your financial situation, then displays how much you might borrow and your available financing alternatives whether you're in the market for a business loan or other funding solutions.

What kind of commercial loans does Tide provide? Tide's open banking technology allows them to provide businesses with individualised credit solutions like business funding: Tide provides access to capital of up to £100,000 per firm and personal loans of up to £25,000 per business owner via the UK Government.

Get deep access to the lending market: long-term business loans are available from Tide, with many repayment plans to choose from.

Via the Reconstruction Finance Plan, Tide also offers company loans of up to £350,000, regardless of whether you have received a Bounce Back or Coronavirus company Interruption Loan in the past. Tide also provides business cash advances for companies in need of quick cash.

Alternative Tide Business Loans

  • Investor capital
  • Funding based on projected earning

If you opt to take out one of these credit solutions, you will be able to see exactly how much you need to pay back when using the Cashflow Insights platform, which is provided by Tide's financial partners.

Applying

Simply linking your company bank account to Tide is all that is required to apply for a business loan. Then, Tide will utilise your open banking information to determine which loans you might potentially qualify for. Your credit score will not be affected in any way by this. 

Once you're linked up, you may check out your credit alternatives and apply for them. Prior to putting pen to paper, it is usually prudent to weigh all of one's available choices.

2. Nest Business Loans ― Fast long-term business loans

Nest, founded in 2015, is a multi-lender platform that assists companies in the United Kingdom in securing financing.

The Financial Conduct Authority (FCA) oversees this business, which partners with over 200 lenders. Nest provides the following commercial lending options.

Choose guarantee-free company financing: There is no collateral required for this form of loan. If you find it difficult to repay the loan, you won't have to worry about losing your house or other valuables. The money from an unsecured company loan may be utilised for anything, and the transfer of cash just takes a few hours.

Or get long-term loans for cash flow purposes: Cash flow facilities allow you to access money on an as-needed basis. This may assist with cash flow or bill paying, and all you have to do is pay back the interest on the borrowed money.

Cash advances for businesses are also available: A merchant cash advance is a kind of company loan that is repaid from a fixed percentage of future credit card profits. You'll pay back more when your company is flourishing and less when it is slow, making them a smart alternative for enterprises with changing revenue.

Or, with invoice financing, you can get a loan for as much as 90% of the entire value of your outstanding bills. If you need cash fast and don't want to commit to anything long-term, this may be a decent alternative to consider.

According to Trustpilot ratings, Nest Business Loans has a solid reputation amongst its clientele. Over 30 reviewers have given it an “excellent” rating (4.7 out of 5 stars) since it was last updated in March 2023. Fast and simple access to funding, as well as helpful customer care, are highly regarded by the business's clientele.

Can I get a loan from Nest for my company? The precise standards for qualification are specific to each kind of loan. You should expect a more favourable interest rate and a better possibility of approval with a solid credit history.

Nest, on the other hand, has a “unique approach” that it claims will have your firm appraised based on things like discretionary income and cash flow projections. A broader variety of financing opportunities will be available to you as a result.

Applying

The application procedure is quick. According to Nest, the application process takes only 60 seconds. In certain cases, you may get an offer in less than 24 hours. Large sums borrowed. Borrowing amounts start at £10,000 and go up to £5,000,000. 

Many potential financiers are available. If you need a loan, Nest will search among more than 200 lenders for the best possible rate. Help from an expert. Professionals at Nest are available to assist you during the whole application procedure. 

Nest Financial Services accepts online loan applications. Complete the form to be matched with the best lender for your needs; getting pre-approval won't affect your credit score. After receiving many proposals, an account manager will walk you through each one to help you choose the best one.

After that, your account manager will reply to any inquiries from the lender on your behalf. Your account manager will keep you updated at all times and work to have the money moved as soon as feasible.

3. Barclays ― Top long-term business loans for SMEs seeking a highly established bank

From unsecured loans to asset financing and commercial mortgages, Barclays has your company's financial needs covered. There is no need for your business to already have an account with Barclays in order to apply, although doing so can expedite the process by providing you with a temporary loan limit.

Barclays Bank, one of the largest in the United Kingdom, is a mainstay of global banking. It all started in Manchester, England, in 1690.

Barclays provides many financing options for small and medium-sized firms (SMEs) in need of capital to expand their current operations.

There are alternatives for repayment breaks and payback lengths that may go up to 20 years, however, interest will still accumulate throughout that time.

Barclays's microloans: These loans are interest-free for as long as you choose to pay them back. They have a fixed interest rate and a grace period of up to six months before payments are due. Interest will continue to accumulate, however, even during these times. Barclays provides term options for their small company loans ranging from 1 to 10 years.

The length of time you have to pay back these secured loans might go up to 20 years. In addition, you may choose between a fixed and variable interest rate, plus make interest-only payments for up to a year.

When it comes to financing, business loans from Barclays Bank might be an excellent stepping stone. The terms of a loan for a small company typically range from one to ten years, while those for a medium company might be anywhere from one to twenty years.

Loans to medium-sized businesses are secured, whereas those to small businesses are unsecured. If you are having trouble making your payments, you may utilise whatever asset you own to make up the difference. This might lead to the repossession of your house if you use it.

Also, lock in a set rate of interest. These may be used for either a small or medium-sized business loan. Interest rates for medium-sized business loans may be both fixed and variable.

Plus, a moratorium on payments is a possibility. Medium-sized business loans provide this option. However, remember that interest will continue to accumulate throughout this time. 

Applying

Where should I start if I want a loan from Barclays? You can fill out an application for a Barclays Small Business Loan on their website. There, you'll find instructions on how to apply or determine your eligibility. You'll need to pick up the phone and apply for a Medium Business Loan.

Access to money is provided quickly by Barclays. The funds from your Small Business Loan will be deposited into your account within one business day after approval. The funds from your Medium Business Loan will be deposited into your account within 48 hours after approval. 

Loan interest rates may be either fixed or variable. Your credit history, income, and how long of a loan you need all play a role in determining your interest rate. There might be discrepancies with the advertised item.

4. Love Finance ― Well-regarded loans for SMEs

Birmingham-based Love Finance was established in 2012. To better assist companies in the United Kingdom in locating the most suitable loan or financing solution, it collaborates with a wide network of financial institutions.

You can use the Love Finance website to see whether you qualify for any of the numerous loan options they provide. Your credit score will not be impacted in any way.

Finance for SMEs: Loans for small businesses are available for a wide variety of company expenditures, including start-up fees and the acquisition of machinery and equipment, with interest rates beginning at only 2.9%. In most cases, you may borrow up to £250,000, and financing can occur the very next business day.

Unguaranteed company loans: With this option, there is no danger of losing your house or other valuables in the event of default on an unsecured business loan since you are not required to put up any collateral.

In contrast to secured loans, which are only used for certain objectives, unsecured loans may be used for everything a firm needs. Borrow up to £500,000, and the money should be in your account within 24 hours.

Get same-day financing in as little as 4 hours is possible with instant business loans of up to £500,000. Unanticipated costs, such as those associated with repairs or renovations, may benefit from this sort of financing. The lowest available interest rate is 2.9%.

Loans for limited corporations are tailored to their needs, allowing them to borrow up to £500,000. You never have to put up collateral when you get a loan from Love Finance for your limited liability business.

When compared to other forms of business loans, limited company loans often have higher interest rates and more stringent repayment restrictions. To qualify for a limited company loan from Love Finance, you will also need a business checking account.

Indirect Tax Credit Loans: When it comes to making tax payments, many firms turn to VAT loans. Short-term loans are generally repaid between three to twelve months. Businesses that are having trouble paying their VAT payment on time may benefit from applying for a VAT loan, which may also be used for other company needs.

While Love Finance's maximum loan amount is £250,000, most borrowers take out much smaller amounts due to the short repayment periods associated with VAT loans. When compared to alternative loan options, the interest rate may be favourable.

Applying

The specific conditions for getting a loan for your company will be different from one loan to the next. However, your chances of acceptance improve if your business has been established for at least a year, has excellent credit, and has no outstanding County Court Judgements.

There is often a minimum monthly sales volume requirement as well, however, this varies by kind of credit. A small company loan, for instance, typically requires a yearly revenue of £50,000 or more. To qualify for an unsecured company loan, your monthly revenue must be above £10,000.

5. Mycashline ― Alternative long-term business loans provider

Mycashline is a direct lender, not a broker, that provides “help business owners reach their goals” with unsecured personal loans with a wide range of options.

Mycashline, established in 2018, employs novel funding methods to level the playing field for small company financing and encourage the expansion of small and medium-sized enterprises. Its novel aspect is in the manner in which it assesses your company.

By analysing a company's liquid assets, payment history, and predicted cash flow, the company claims it can provide a more accurate assessment of the company's financial health than a traditional bank.

Mycashline promises to develop a loan package specific to your company if you match their requirements. From £5,000 to £100,000 in unsecured business loans over 1–24 months may be found at mycashline. The loans are risk-based, meaning they're tied to the company's creditworthiness and repayment capacity.

You won't need to pledge physical assets, but you will need to have at least one company director sign a personal guarantee. Credit is available for use, replenishment, and withdrawal whenever you choose.

“My Boost” allows you to securely borrow from mycashline's complete credit range on your own terms. Get a loan between £5,000 and £100,000. Spread out your payments over a short period of time (1-6 months). Loan rates begin at 2.5%.

“My Impact”, on the other hand, provides more manageable payments over a longer time frame. Get a loan between £5,000 and £100,000. Pay down between 6 and 24 months. Loan rates begin at 2.5%.

Applying

The mycashline portal has an online application in which you may send in your most recent tax returns, three months' worth of bank statements, a copy of your valid government-issued photo identification, and some basic information about your firm (its name and nature, for example).

Complete this form as precisely as possible, since mycashline will use it to do a soft check on your credit report using the information you supply. MyCashLine will not report your inquiry to credit bureaus until they have made a decision on your application.

You'll then get a call from an account manager who may provide an estimate and walk you through the following steps of the loan process. If you are a startup, they will also want to see a business plan including financial forecasts.

6. B2Bfinance Spotcap ― Top long-term loans for startups

Spotcap is an industry-leading alternative financing company, having amassed £90 million in funding, 500 active partners, and over 1000 consumers since its start in 2014.

Despite their early age as a service provider, their 5-star Trustpilot rating shows that they are quickly becoming a customer favourite.

Headquarters for Europe are located in London, Madrid, Berlin, and Amsterdam. Since its founding in 2014 and 2016 UK debut, the company has issued 10,000 loans totaling £85 million. Spotcap is an online lender that offers small and medium-sized enterprises loans from £50,000 to £350,000.

Borrowing £100,000 for a year at a typical rate of 24.2% APR with interest rate of 1.40% fixed results in payback of £109,332, or monthly payments of £9,111.

A company may borrow money whenever it needs to, up to its credit limit. SMEs may borrow £50,000 to £350,000 with monthly payments for up to 24 months. Depending on the nature of your company, monthly rates might begin at 1%.

The whole application process may be completed online, and Spotcap promises to respond to your company within 24 hours. No penalties are given for paying back early.

To qualify, a company must have been in operation for at least three years and generate at least £500,000 annually in revenue.

Applying

To qualify, a company must have been in operation for at least three years and generate at least £500,000 annually in revenue.

Head to the Spotcap website, supplying financial data about your company. Your application then gets evaluated by Spotcap. Within 1 business day, you can expect a response from their team of credit specialists after they review your information and run a background check.

Your offer stays up for assessment and acceptance after it has been authorised. In one or two business days, your money will then be ready for use. Please include consolidated financial statements and an ownership structure diagram if the company is part of a larger conglomerate.

Bank statements in CSV or PDF format for the last 6–12 months are necessary. Also provide VAT returns for the previous five quarters, and management accounts and annual accounts if they are older than 6 months.

7. NatWest ― Well-established long-term business loans

The retail banking giant provides several options for secured and unsecured business financing to meet the needs of companies of all kinds. In 1968, National Provincial Bank and Westminster Bank merged to become what is now known as NatWest Bank. In a March 2000 transaction valued at £21 billion, The Royal Bank of Scotland Group purchased the bank. 

The bank provides several business loans among its many other services for both individuals and corporations. Get company loans, both big and little. They have loan amounts ranging from £1000 to £100000. Using both adjustable- and fixed-rate financing.

NatWest provides both fixed- and variable-rate business loans; the interest rate you get is determined on the specifics of your loan, as well as the health of your firm. NatWest, an approved lender for the government's CBILS and BBLS programmes, now provides fixed-rate small business loans.

NatWest provides a variety of business loans to meet the needs of companies of all sizes and stages of development.

There are a number of factors to think about when comparing NatWest business loans, including the amount you need to borrow, the purpose for which the money will be used, the loan term, and your comfort level with securing the loan with collateral. You may use this information to make decisions that are in the best interest of your company.

Applying

If you have a strong credit score, no bankruptcies or county court judgements on your record, and have been a UK resident for at least three years, then you may be eligible for a NatWest business loan. NatWest explicitly forbids the usage of its business loans for non-commercial purposes. Their only goal is to help finance your company.

You don't have to be a current client to apply for a NatWest business loan, but the approval and funding processes tend to go more swiftly if you are.

Top long-term business loans ― Buying Guide

Let me explore this topic further here, looking at what exactly is a long-term business loan:

What is a long-term business loan?

A long-term business loan is a kind of financing that may provide your firm the money it needs for long-term goals and ongoing expenses.

When company owners face the prospect of significant growth or investment costs, they often turn to long-term business loans. This may include anything from investing in new facilities to acquiring high-priced machinery and equipment.

Long-term company loans provide the opportunity for more manageable payback terms and lower interest rates than other types of business loans.

Eligibility

While there is no one-size-fits-all solution for financing, certain businesses may be better suited to long-term loans than others.

  • Entrepreneurs with growth aspirations: the costs associated with expanding a company tend to be substantial. A long-term company loan might provide a sizable sum of money to assist with the expenses. 
  • Young companies: to get off the ground, a new business usually requires a substantial investment. A long-term business loan might provide the financial boost you need to launch your company with manageable monthly payments. 
  • Companies with few financial resources: long-term business loans might be an excellent alternative if you need money to fuel your company operations but don't have the cash on hand to make large repayments all at once.

How to open

The approval of your application for a long-term company loan is contingent upon a number of variables.

A high credit score is preferred by lenders. You may learn a lot about your trustworthiness as a borrower based on your credit history, which includes both your personal and business credit ratings.

Having a well-established company demonstrates your business acumen to potential lenders, increasing the likelihood that they will grant you a long-term business loan. Applicants with at least a few years of relevant experience have an easier time being hired.

Lenders will also be interested in learning how much money you make each year. By doing so, they can gauge your company's health and decide whether you're financially stable enough to make loan payments.

Application submissions

A company loan application can be submitted online in a short amount of time. VAT returns and bank statements are often required with the usual identification information (company type, registered address, limited company number, etc.). You'll also be asked to explain how the money will be used from the loan.

While rapid approvals are possible for smaller loans with shorter durations, lenders are more likely to do a thorough investigation of your company if the requested loan amount is much bigger or if the risk associated with providing the loan is higher.

In such instances, it may be necessary to speak with an underwriter, which might add a few business days to the decision-making process. Once your application has been granted, the cash will typically be credited to your account the next business day.

A personal guarantee may be necessary in order to get financing. This means that the borrower is promising to cover the loan's principal and interest out of their own pocket if necessary. Loans may be unsecured, although some creditors prefer collateral like real estate, automobiles, or machinery.

Long-term loan alternatives

Do other financing options exist besides lengthy company loans?

There are other options to consider if you decide that a long-term business loan is not the best route for your firm. Some of the possibilities are as follows:

  • Receivables financing: this investment is more of a cash advance to help with day-to-day operations than it is for major capital expenditures. Accounts receivable financing often entails a bank's purchase of your outstanding bills or a loan secured by those invoices. 
  • Card for commercial use: borrowing limits on corporate credit cards are often higher than those on consumer cards. This is because your business's revenue will determine how much money you may borrow. There's a chance you may get a rebate or earn points, too. 
  • Crowdfunding: if you're looking to raise a sizable chunk of money, crowdfunding could be the way to go. To get people to donate to your cause, you'll need a convincing business case. 
  • Overdraft on a company account: business owners that require access to funds quickly or for a limited time frame may benefit from this kind of financing. Interest rates are often high, so you should be sure this is the best option for you.

What's the distinction between business debt and my own debt?

Depending on how you run your business and how meticulously you maintain your records, business debt and personal debt may get confused. If you've taken out loans to launch or maintain your firm, you have business debt.

Pay attention: if your company's annual revenue is less than £1,000,000, most of your business debt is probably classified as personal debt. Here's a foolproof method for telling them apart:

  • The loan is in your name, right? If so, you're looking at a private loan
  • If you fail to repay your business's debt, who will the loan sharks go after? It's a personal loan if they're going to go after you
  • What happens to your possessions if you fail to fulfil your obligations? If so, you are now the proud owner of a personal loan

A signature is required when you visit a bank to get a loan for your company. When you approve the loan, you are also consenting to the repayment conditions. And if you fail to make your payments on time, the bank will come knocking on your door.

And if you can't pay them back, they'll come to take your house and possessions since your name is on the loan documents.

Don't fret; there are safeguards in place to prevent just such an occurrence. The most important thing to remember, however, is that you should conceptually make no distinction between the debts of your company and those of your own person.

Tried-and-tested methods for repaying company debt… 💵

Here are tips I’ve sourced from Dave Ramsey on how to reliably repay company debt. 

If you’ve heard of him, I don’t need to mention his debt snowball, was a strategy for eliminating debt. Step 2 of the 7 Baby Steps is the debt snowball. Once you have accumulated a £1,000 emergency fund, the next step is to jump into paying off your debt. This is how it functions:

Step 1: List out all of your debts, beginning with the lowest

Cover all but the lowest balances with minimum payments. The smallest debt should be attacked with all available resources. As soon as you've paid off one loan, put that money towards the next lowest bill while continuing to pay the minimum on the remainder.

Let the snowball accumulate. The debt snowball expands and gains momentum as you use the extra cash to pay down more of your balance.

Step 2: Pay yourself a salary

Here I'm going to suggest a somewhat different approach, however when dealing with debt on behalf of a firm, you should start by giving yourself a reasonable salary. Now, you don't want to be put away enough for that new Range Rover you've been eyeing (not yet, at least), but you also don't want to be barely getting by on ramen noodles and Spam either.

You'll start paying off the company's debt after you've taken out a reasonable salary. We advise you to invest the bulk of your earnings towards paying down your debt and growing your retained earnings (more on this below).

Step 3: Use the 80/20 principle

Being the boss means you get to decide how much of your earnings go towards paying off (Monzo vs. Starling review) that burning debt. But keep in mind that a larger sacrifice now will have you debt-free much sooner. Perhaps you've come to terms with the fact that you're more of an 80/20 person. Pay off debt with 80% of your profits while investing in your business with the other 20%.

Step 4: Have an emergency fund

Consider it your company's “rainy day” or “opportunity” fund. It will come in handy not just during the sluggish months, but also when the transaction of the century finally knocks on your door. Yes, this funding makes it possible to answer the door when opportunity knocks.

It's not uncommon for business people to work alone although it need not be the case. Whether you're doing it alone or leading a large group of employees, it's okay to seek guidance on how to improve your chances of success. 

Leading long-term business loans: The Verdict

Growing a company needs substantial resources, and yet many startups place a premium on speed and adaptability. Many companies may turn to a business loan when waiting for financing is not an option.

Repaying a company loan over a long period of time offers for more manageable monthly payments, but the longer you borrow for, the higher your total interest payments will be. A longer loan term also increases the likelihood that your organisation may go through a cash flow shortfall and be unable to meet its loan payments.

To be accepted, you'll need to meet the eligiblity requirements and this includes showing that you have a solid financial foundation, expecting a five-year loan with just six months of trading history is unrealistic.

The interest you pay on a loan over many years may add up to a significant sum, so it's in your best interest to look around for the cheapest rates possible. Also watch out for extra fees which can be charged over the loan term, including for late payments or for overpaying.

For more, see our top business loan accounts.

Related Guides:

FAQs

How long will the repayment period for a business loan will be?

Do companies need collateral for their loans?

How long of a loan term do banks offer?

Can a firm with bad credit secure a long-term loan?

Can I get a long-term company loan without a cosigner?

Do new businesses qualify for medium- to long-term financing?

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Mentioned Banks

About Barclays Bank Barclays is a British multinational investment bank and financial services company. It was founded in 1690 and is headquartered in London. Barclays originated...
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About Bank of Scotland Bank of Scotland is a commercial clearing bank based in Edinburgh. Not to be confused with Royal Bank of Scotland, it was established in 1695 and is one...
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About Havin Bank Havin Bank, formerly known as Havana International Bank, or HIB, was founded in the United Kingdom in 1972. It received its banking authorisation the following...
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NatWest, or National Westminster, is a retail and commercial bank based in the United Kingdom. It is one of the ‘Big Four’ UK clearing banks and has more than 7.5million personal banking...
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About RBS RBS, or Royal Bank of Scotland, is a retail banking subsidiary of the Royal Bank of Scotland Group. The Group’s other retail subsidiaries are NatWest and Ulster Bank....
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