Types of business loans
Every kind of business finance, by what it’s for.
Start with the need, not the product name. Each route explains what the finance is for, who usually looks at it and what to watch before you sign.
All loan types
Asset finance
Spread the cost of the thing that does the work, from an oven to a van.
Explore this optionCommercial mortgages
Buy or refinance the place you work from, with the deposit and the monthly commitment in view.
Explore this optionSmall business loans
A lump sum for a specific job, repaid monthly over an agreed term.
Explore this optionInvoice finance
Release money that is tied up in what your customers already owe you.
Explore this optionStart-up loans
A government-backed personal loan for a new or young business, with a fixed rate.
Explore this optionSecured business loans
Larger sums backed by property or another business asset. Understand what is at risk as well as what it unlocks.
Explore this optionUnsecured business loans
Borrow a lump sum without tying it to a specific asset. A personal guarantee may still be asked for.
Explore this optionBorrowing is one option.
Grants, equity, savings, better payment terms or growing in stages may be worth considering too. The right decision starts with the purpose, the full cost and a realistic repayment plan.
Explore my starting point
Side by side
The main types of
business loan at a glance.
What each route is usually used for, what secures it and how it’s repaid. Terms vary by provider, so check the details of any offer.
| Type | Often used for | Security | How it’s repaid |
|---|---|---|---|
| Asset finance | Equipment, vehicles and machinery | The financed asset is usually central to the agreement | Instalments or rentals over the agreement |
| Commercial mortgages | Buying or refinancing business premises or investment property | Secured on the property | Monthly over a longer term, on a capital repayment or interest-only basis |
| Small business loans | A specific purchase, stock or a project | Secured or unsecured, sometimes with a personal guarantee | Regular repayments over a set term |
| Invoice finance | Cash tied up in unpaid business invoices | Advances against your invoices, often with recourse | Settled as customers pay, less the provider’s charges |
| Start-up loans | Starting or growing a young business | A personal loan for business use, with no asset security | Fixed monthly repayments over one to five years |
| Secured business loans | Larger plans backed by property or other assets | Property or another business asset | Regular repayments over an agreed term |
| Unsecured business loans | Growth, recruitment or marketing | No specific asset, but a personal guarantee may be asked for | Regular repayments over an agreed term |
Let’s clear a few things up
Questions about
loan types.
Short answers to the questions people ask first.
What are the main types of business loan?
The main routes are asset finance, commercial mortgages, small business term loans, invoice finance, government-backed Start Up Loans, and secured or unsecured business loans. Each suits a different purpose, so start with what the money is for.
What is the difference between secured and unsecured business loans?
A secured loan gives the lender rights over an asset, such as property, if the loan is not repaid. An unsecured loan has no specific asset security, but the lender may still ask a director or owner for a personal guarantee.
Which type of business loan is best?
There is no single best type. The right fit depends on what the money is for, how and when the business can repay, what security is available and the total cost. Compare like-for-like offers before deciding.
Are there alternatives to a business loan?
Yes. Grants, equity investment, savings, better payment terms with customers or suppliers, or growing in stages may suit some plans better than borrowing.
From working it out to moving forward
Your next step.
Loan options by email.
Tell us what you need and where to send your loan options. Request quotes to compare, with no obligation to go ahead.
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