Business loan

Review of business loan provider Barclays – Forbes Advisor UK

Barclays offers flexible loans for your business at a fixed interest rate. And you don’t need a business bank account with the lender to apply.

Representative example

The representative APR example gives you an estimate of how much it might cost if you borrowed a certain amount of money. This helps you compare products and provides a guide to the cost of carrying a sale. Your personal offer may vary from the representative APR example.

You could borrow £25,000 over 5 years with monthly repayments of £528.72. The total reimbursable amount will be £31,723,160. Representative APR 9.80% (fixed) per year

Advantages

  • No minimum turnover requirement
  • No setup fees
  • Repayment terms up to 10 years
  • Overpay or refund in full without penalty

The inconvenients

  • May require a personal guarantee
  • Requires a business bank account (not necessarily with Barclays)
  • APR for loans over £25,000 provided on request

Lowest representative APR (varies)

9.3% (loans between £1,000 and £25,000)

Loans available

£1,000 to £100,000

Available terms

12 months to 10 years

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Main characteristics

  • Representative APRs of 9.30% (fixed) on loans below £25,000
  • Unsecured loans from £1,000 to £100,000
  • Repayment terms between 12 months and 10 years
  • Up to six months capital repayment holiday

Will I be eligible?

To be eligible for a Barclays business loan, you must be aged 18 or over and own your business. There are no minimum or maximum turnover requirements to be eligible.

You must also have a business bank account, although it does not need to be with Barclays.

When you apply for the loan, you will be asked to provide your account details, a copy of your business plan, profit and loss information and an explanation of how you plan to use the loan .

Although unsecured loans are available up to £100,000, in some cases you may also be required to take out a personal guarantee to take out the loan. This agreement between you and the lender means that if your business is unable to repay its loan, you will be held personally responsible for the payments.

When you apply for a loan, you can expect to receive a decision from Barclays within days. Once approved, the loan will typically be deposited into your business account within 48 hours of signing a loan agreement.

If you want to borrow more than £25,000 you will need to complete an application before Barclays can offer you a personalized interest rate.

Loan applications can be made online or over the phone.

What more do I need to know?

With a Barclays business loan, you can make overpayments without penalty and there are no prepayment charges. When you borrow less than £25,000 there is also no arrangement fee.

For a loan over £25,000, the lender may offer you a principal payment holiday of up to six months. For loans below £25,000, principal repayment holidays could be available for up to three months.

Keep in mind that your loan will continue to earn interest during the payment holiday. This extra interest will be divided equally between your monthly payments when you start paying them.

Is a Barclays loan right for my business?

Barclays could offer your business a loan between £1,000 and £100,000, with interest rates starting at 9.30% APR (fixed).

Keep in mind that this APR is representative, and the exact rate offered to your business will depend on the amount you are borrowing, your repayment term, and your specific business circumstances.

Borrowing from Barclays could be a good option if you want to know exactly how much you’ll repay each month, since the rate on its business loans is fixed for the term.

The lender also allows borrowers to overpay or prepay a business loan without paying a penalty.

If you miss a payment, your credit rating could be affected.

What are my alternatives?

If you are planning to borrow a small amount of money for a short period of time, using a business credit card is an alternative worth considering.

Some business credit cards offer payment terms of 50 days or more. This means that as long as you clear the balance within this time, you will not pay any interest.

The UK government also supports low-interest loans designed for startups. The Start-up loan program offers loans of up to £25,000 with a fixed interest rate of 6.0% APR and repayment terms between 12 months and three years.

To be eligible, your business must be less than three years old.