UK business loan interest rates and fees comparison 2026

Business loan interest rates in the UK currently start from around 7% APR for established businesses with strong credit profiles. The rate your business receives depends on your trading history, credit score, annual revenue, and the lender's appetite for risk. Crucially, the lowest advertised rate does not always mean the cheapest loan, arrangement fees, processing charges, and early repayment costs can significantly increase what you end up repaying. This guide compares UK business loan interest rates and fees across high street banks, alternative lenders, and government backed schemes, so you can understand the true cost of borrowing before you apply.

Current UK business loan interest rates in 2026

The Bank of England base rate currently sits at 3.75%, and every lender applies its own margin on top depending on their own criteria and appetite. Businesses with strong financials, healthy cash flow, and an established trading history tend to access the most competitive rates.

High street banks typically offer the lowest rates, but come with stricter eligibility requirements and slower approval times. Most expect at least two years of trading history, filed accounts, good business credit, and stable revenue. Alternative lenders are more flexible and can often fund a business within days, making them popular if you need quick access to working capital, but this speed usually comes with higher rates and more complex fee structures. Here’s a comparison of rates and fees by provider:

Government backed start up loan interest rates and fees

For newer businesses, the UK Government backed Start Up Loans scheme remains one of the most transparent and affordable finance options currently available. Unlike many commercial lenders, the scheme offers a fixed interest rate, no arrangement fees, no early repayment penalties, and free mentoring support for eligible businesses. The table below outlines the current start up loan terms.

The extension of eligibility from 36 months to 60 months means more established early stage businesses can now access the scheme. The fixed rate structure also provides predictable monthly repayments, making budgeting and cash flow forecasting significantly easier for newer businesses.

Business loan fees to compare

Business loan fees can have just as much impact on borrowing costs as the interest rate itself. The table below explains the most common business loan fees to look out for.

Even relatively small fees can make a meaningful difference to the total borrowing cost, particularly on shorter term loans or higher value borrowing.

How much difference do business loan interest rates actually make?

Small differences in APR can translate into thousands of pounds in additional borrowing costs over the life of a loan. The table below shows the approximate repayment cost of a £10,000 business loan repaid over three years at different rates.

The impact becomes even more significant on larger borrowing amounts. A £50,000 business loan at 12% APR over five years would result in total repayments of approximately £66,700. Repaying the loan early after two years rather than five could reduce interest costs by around £18,000. This highlights why repayment flexibility and early settlement terms are just as important as the headline interest rate. You can also use our business loan calculator tool to see how different interest rates will impact the total repayment amount.

Figures are illustrative only. Actual repayments will vary depending on lender criteria and your business profile.

Compare business loan rates and fees with Capitalise

Applying directly with multiple lenders is time consuming and rarely gives you a clear picture of what's available. At Capitalise, we connect you to more than 130 UK lenders through a single search, making it straightforward to see which lenders are likely to approve your business and what rates and fees you may qualify for. You can compare options side by side, check your business credit score, understand your approval likelihood before committing, and access support from our dedicated funding specialists throughout the process.

Business loan rates, fees, and eligibility criteria are subject to change and will vary depending on your business circumstances, financial profile, and lender requirements.All figures included in this guide are based on publicly available information as of June 2026. Always confirm the latest terms directly with the lender before making a financial decision.