Medium to long-term business loans

Most businesses need a financial helping hand to either get them off the ground or expand and a medium to long-term business loan can be one of the best ways to get funding. It’s not as easy as it once was to find business loans, but the major banks still all offer them and if your business plan, credit score and homework is all in place, it’s certainly worth applying.

MoneySuperMarket doesn't offer a comparison service for this type of product, but we have compiled a list of lenders below who can help.

Medium to long-term business loans

    • Provider/Product name Small Business Loan

      NatWest

      Small Business Loan

    • Description

      The NatWest Small Business Loan gives you:

      > Fee free small business loans from £1,000 up to £25,000

      > Pay back terms to suit you - borrow for one year, or up to 10 years

      > No set up fees

    • Go to site

    Director's Guarantee may be required. Excludes Commercial Real Estate Finance. Over 18s Only.

    • Provider/Product name Business Loan

      Ortus Business Finance

      Business Loan

    • Description

      Loans for new starts and established businesses, available to UK property owners.

      Funding for business can seem overwhelming, but it needn’t be. Ortus recognises every business is different. Applications are considered on individual merit rather than solely on credit history and we can introduce a range of flexible business finance solutions to suit your needs.

      > Borrow up to £1,000,000 with repayment terms from three months to ten years
      > Once approved, funds are sent within 24 hours of receipt of completed documentation
      > Early repayment fees don't apply

      No trading history – no problem. A new start loan through Ortus can support your business during its infancy. When traditional funders can’t help, Ortus offer access to straightforward loans matched to your needs.

    • Go to site

    Min Criteria: Only UK property owners considered. No trading history required. Response within two hours (during business hours: 9:00am - 5:30pm)

    • Provider/Product name Business Loan

      Funding Circle

      Business Loan

    • Description

      UK’s leading peer-to-peer business lender

      Fast and simple business loans from £5k to £1 million - without the banks.

      Borrow from a community of thousands of people together with the Government-backed British Business Bank, local councils and universities.

      Quick & convenient process:
      > Check your eligibility in one minute
      > You'll hear from Funding Circle within two working days of completing your application 
      > Loan terms from six months to five years. No early repayment charge.

      Flexible loans: borrow for working capital, expansion, property, asset purchase and one-off business expenses.
      Now open for non-limited companies (sole traders and partnerships) to apply for a loan.

      Business Finance Partnership scheme - Local Government is lending millions through Funding Circle to support UK businesses.

    • Go to site

    Minimum criteria: Two years+ filed accounts at Companies House or formally prepared accounts for non-limited businesses, minimum turnover of £50k and a good credit score.

Medium to long-term business loans

Setting up a business or expanding your current one can be expensive. Some people opt to fund it themselves but for many, this is impossible and chances are you’ll need financial support.

The reason many business owners prefer a medium to long-term business loan is so they can be certain that they will have funding in place to support their enterprise for several years. In turn, this will help them plan and budget.

Here, we take a closer look at some of the advantages and disadvantages of medium to long-term business loans…

Longer term loans

A medium to long-term business loan typically enables you to borrow money to help your business for one to five years.

The loan is repaid in monthly instalments, with interest added to the amount you owe. Some business loans have a fixed rate of interest, which means your payments won’t change over the term of the loan, while others have a variable rate, so the amount you owe could vary over the loan term.

Make sure you know which you are getting into as this could have a real impact on budgeting for your business.

Advantages of a medium to long-term loan

A medium to long-term business loan can help with all the costs associated with setting up a business, from cashflow to expenses and paying staff.

The longer the term of your loan, the lower your monthly payments will be, as you are spreading the cost over a longer period of time. This can be useful when you are trying to get your business off the ground, as it means you won’t have to make high monthly payments at a time when there will invariably be plenty of other set-up costs to consider.

Disadvantages of a medium to longer term loan

Taking out a business loan over a longer period may mean that your payments are lower than if you’d opted for a shorter term loan, but remember that ultimately this means you will pay more interest overall.

How much interest will you pay?

The amount of interest you must pay on a business loan will depend on your individual circumstances, including how much you want to borrow and over what period of time. If your business is just starting out, the lender will usually want to look at your personal credit rating to give them an idea of how responsibly you manage your money. The higher your credit score, the more likely you are to be offered a loan at a competitive rate of interest.

Alternatives to medium to long-term business loans

As well as loans, there are several other ways that business can secure funding. You may, for example want to use a business account overdraft which can provide you access to funds as and when you need them, making them useful for any unforeseen expenses. Business overdrafts are usually available for any period up to 12 months.

Alternatively, you may want to consider a business credit card. These can provide a useful way to manage staff spending and usually give up to 56 days interest-free credit.

Other options include cashflow finance, which enables companies to borrow against the value of their unpaid invoices, and borrowing against assets, for example your business’s property or equipment.

How our site works

 When you’re looking for a medium to long term business loan, we want to give you as much choice as possible, so you can choose what’s best for you. Some lenders don’t want to be included on comparison websites, so we can’t promise to show you every single one. We show high street banks at the top of the list, with other lenders further down. We rotate the other lenders on the 1st of every month, so the ranking order changes regularly. You can find out more about how we work here.

Moneysupermarket is a credit broker – this means we’ll show you products offered by lenders. We never take a fee from customers for this broking service. Instead we are usually paid a fee by the lenders – though the size of that payment doesn’t affect how we show products to customers.

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