Business loans·9 min read·Updated 7 September 2026

A £250,000 business loan: the point where security starts paying for itself

By the CapExpand team

Reviewed by Alex Beardsley, Founder · UK commercial finance broker

Facts checked 7 September 2026 · first published 7 September 2026

A quarter of a million pounds is where the conversation changes from what your bank statements show to what the lender can take if it goes wrong. Thirty-five brands on our panel still have a live unsecured product covering £250,000, and their median published floor is 14.5% a year, the lowest of any size we track. But seventeen lenders will look at the same amount on secured terms over a horizon running to 360 months, and for a business that owns premises or hard assets that is a different price altogether.

£250,000 is also a hard ceiling in one specific place. Funding Circle's Growth Guarantee Scheme loan is published as £25,001 to £250,000 from 13.4% a year, so this exact figure is the top of the government-backed route on its site. Ask for £260,000 and that product disappears. It is the mirror image of the £25,000 page, where the same scheme starts a pound higher.

What a lender needs to see at £250,000

Two questions dominate a £250,000 application. Does the business own anything, and will a director put their house behind it. Fleximize lends unsecured to £500,000, so £250,000 is inside its unsecured range, but its secured product takes an equitable charge and it says a debenture may be required on unsecured deals as well, depending on the state of the business. Bizcap's secured product runs from £30,000 to £1,000,000 on five months of trading, and it takes a charge over the assets of the borrower and its guarantors on anything above £30,000 regardless.

Where a lender lands on security changes the sizing rule too, and not in the direction you would expect. Fleximize lends up to four months of revenue unsecured but only up to two months on its secured product, because the secured deal is sized off the value of the asset rather than the trading. So a company turning over £125,000 a month reaches £250,000 unsecured on the four-month rule, while a company with a valuable freehold and thinner sales gets there the other way.

Personal guarantees are universal at this size, with one useful exception. On Growth Guarantee Scheme loans Funding Circle takes a guarantee but says principal private residences cannot be taken as security. That carve-out is the single most valuable feature of the scheme for an owner-manager, and it matters more at £250,000 than at any smaller number, because this is the level at which a guarantee stops being theoretical. Our guarantee explainer goes through what the wording actually permits.

What our panel does at this size

What our panel does at £250,000

Unsecured lenders

Live products

Terms

1 to 120 months

Published rates from

4.1% pa

Distinct lender brands with a live unsecured product whose range covers £250,000, plus 17 lenders on secured terms. “From” rates are the lowest floor any of those products publishes; the typical floor is nearer 14.5%. Checked September 2026; panel composition changes over time; never an offer or a quote.

Worked example

Worked example · Funding Circle Growth Guarantee Scheme loan

£250,000 over five years for a food manufacturer fitting out a second unit

Assumptions (illustrative, not a quote)

Limited company, eight years trading, full accounts filed, guarantee from two directors
Borrowing £250,000 over 60 months at a fixed rate
Interest 13.4% a year, the published starting rate for Funding Circle’s Growth Guarantee Scheme product
A completion fee applies and is charged separately; Funding Circle does not publish it as a percentage
Illustration only, not a quote; the scheme has its own eligibility and the lender prices each case

The arithmetic

Monthly rate r = 13.4% ÷ 12 = 1.11667%; payment = P × r ÷ (1 − (1 + r)^−n) with P = £250,000 and n = 60
(1.0111667)^60 = 1.94700, so (1 + r)^−n = 0.51361 and the denominator is 0.48639
£250,000 × 0.0111667 = £2,791.67, and £2,791.67 ÷ 0.48639 = £5,739.59 a month
60 × £5,739.59 = £344,375 repaid, so the interest is £94,375 before the completion fee
The same £250,000 over 60 months at 9% a year, inside the 7% to 11% band clearing banks quote for unsecured term lending, costs £5,189.59 a month and £61,375 of interest. The gap is £33,000, and it is the price of speed and of a lender that will say yes when a bank says no

At a quarter of a million the difference between bank pricing and panel pricing is a five-figure sum, which is why we always ask whether the business has actually been to its bank before we place it. If the answer is no and the accounts are clean, that conversation is worth having first.

Who funds £250,000

Lender	Published range	At £250,000
Funding Circle	£10,000 to £750,000	£250,000 is the exact ceiling of its Growth Guarantee Scheme loan (£25,001 to £250,000 from 13.4% a year). Its ordinary business loan starts at 6.9% a year and runs to six years, both with a completion fee.
Fleximize	£10,000 to £1,000,000 (unsecured to £500,000)	Inside the unsecured range, but its secured product uses an equitable charge and it says there are no loan-to-value limits on terms up to 24 months, and in some cases it will lend at over 100% loan to value.
iwoca	£1,000 to £1,000,000	A quarter of iwoca’s published maximum. Its 20% of turnover sizing wants around £1.25 million of annual sales, and the additional fee on terms beyond 24 months is about 6%.
Bizcap (secured)	£30,000 to £1,000,000	Five months of trading, conditional approval quoted in as little as three hours and funds in as little as 48 hours. Its bridging product starts at £150,000, requires property ownership and runs up to twelve weeks.
Capify	£10,000 to £3,000,000	Sits in Capify’s top pricing tier, £150,000 and above. Unsecured terms run 3 to 24 months, secured lending is quoted at 24 to 48 hours, and every product carries a personal guarantee.
Nucleus Business Loans	£10,000 to £500,000	The 25% of turnover cap means £250,000 needs £1 million of annual sales. Terms of 25 to 60 months are published from 14.5% a year and need two or more years of trading, with a homeowner guarantee.
Swishfund	£10,000 to £400,000	Well inside its range but above the £75,000 line, so its own pages quote 48 hours to three working days rather than the same-day promise it makes on smaller loans. Straight-line interest over a maximum of 24 months.

Examples from the panel, not the full list, from each lender's published criteria as at 7 September 2026. Every figure is subject to the lender's own checks.

Where a charge starts paying for itself

Seventeen lenders on our panel will consider £250,000 on secured terms, and the term range on those products runs from twelve months to 360. That upper figure is the whole point. Spreading a quarter of a million over twenty or thirty years against a commercial property turns a £5,700 monthly commitment into something a trading business barely notices, and the rate drops because the lender has an asset rather than a promise.

The cost is time and control. A charge means a valuation, solicitors on both sides and several weeks rather than several days. A debenture, which is a floating charge over the company's assets generally, is quicker to put in place but restricts what you can do next: try to raise an invoice facility afterwards and the new funder will want the debenture released or ranked behind it. Fleximize says it may need a debenture on unsecured lending depending on the state of the business, which is a polite way of saying it takes one when the numbers are marginal.

Fleximize's secured page carries the most striking published line at this size: no loan-to-value limits on terms up to 24 months, and in some cases lending at over 100% of the asset value. That is unusual, and it tells you the charge is there to concentrate the borrower's attention as much as to cover the debt. Read the equitable charge wording before you decide whether that is a good trade.

The Growth Guarantee Scheme stops exactly here

Funding Circle's homepage lists the government-backed loan as £25,001 to £250,000 from 13.4% a year with a completion fee. £250,000 is therefore the last pound of it, which makes this page the mirror of our £25,000 one, where the same product starts a pound above the round number.

The rate looks high next to the 6.9% floor on Funding Circle's ordinary loan, and it is. The scheme is not there to be cheap; it is there so a lender can say yes to a business whose accounts would otherwise fail on security or track record. The two features that make it worth the difference are the longer view underwriters can take and the rule that principal private residences cannot be taken as security under it.

One caution. Because the ceiling is the number rather than the need, we occasionally see a request shaped around the scheme instead of the business. Borrowing £250,000 when £180,000 does the job costs around £26,000 of extra interest over five years at 13.4%. A scheme designed to make credit available is not a reason to take more of it.

The comparison nobody makes at this size

A large share of six-figure enquiries we see are really about a tax bill. Corporation tax fell due, VAT landed on a bad quarter, and the instinct is to borrow to clear it before HMRC gets difficult. It is worth doing the arithmetic before you do that, because HMRC late payment interest was 7.75% as at 7 September 2026, which is cheaper than every rate on this page and most of the bank band.

That is not an argument for ignoring HMRC, and paying late has consequences a lender never imposes: surcharges, a damaged relationship on the next Time to Pay request, and in the worst case a winding-up petition. But a Time to Pay arrangement negotiated properly and serviced on time is usually the cheapest money a business will ever get, and borrowing £250,000 at 13.4% to clear an amount HMRC would spread at 7.75% is a decision that ought to be made deliberately rather than out of panic.

Where borrowing does win is when the tax bill is a symptom rather than the problem, or when a Time to Pay request has already been refused. In that case the useful question is not which lender is cheapest, but which one will take a view on a business with arrears showing on the statements. That is a much shorter list, and it is not the list at the top of a search result.

Need £250,000? Find out who would say yes first.

One enquiry and we check your figures against every lender above before anything is submitted. We arrange; the lender decides.

Start an enquiry 0333 041 3127

Frequently asked questions

About £5,740 a month over five years at 13.4% a year, which is the Growth Guarantee Scheme rate in our worked example, or about £5,190 at 9% a year at the middle of the bank band. Stretch the same amount over a 15 or 20 year secured facility and the monthly figure falls sharply, at the cost of far more interest over the life of the loan.

Yes. Thirty-five brands on our panel have a live unsecured product covering it, and Fleximize lends unsecured to £500,000 while Funding Circle goes to £750,000. What varies is whether a debenture is added on top of the director guarantee, which Fleximize says depends on the state of the business, and whether the lender takes a charge over assets as Bizcap does above £30,000.

Around £1 million a year at the tighter end. Nucleus caps its Business Loan at 25% of annual turnover, so £250,000 needs £1 million. iwoca’s 20% of turnover figure needs £1.25 million. Fleximize’s four months of revenue rule needs £62,500 a month, or £750,000 a year, which is the most generous of the published rules at this level.

Secured terms buy a longer runway, with panel products running to 360 months against 120 unsecured, and a lower rate. Unsecured buys speed, with Bizcap quoting funds in as little as 48 hours on its secured product and considerably faster on unsecured. In the deals we arrange, businesses with a freehold and a slow-burn use for the money take security; businesses funding a contract that starts next month do not.

At this size, often. Bizcap states in its FAQs that on any loan above £30,000 it takes a charge over the assets of the borrower and corporate guarantors. Fleximize takes an equitable charge on its secured loans and may take a debenture on unsecured ones. A debenture registered at Companies House is visible to every other lender and will complicate a later invoice finance or asset finance facility.

Unsecured, days. Funding Circle quotes a decision in as little as one hour with funds typically within 48 hours, and Swishfund quotes 48 hours to three working days for loans above £75,000. Secured, weeks, because a valuation and legal work sit in the middle. Fleximize is the exception it publishes: an equitable charge lets it release funds on the same day as approval.

It is a normal-sized request for a business banking relationship manager, and at 7% to 11% a year for unsecured term lending the pricing is materially better than the alternative panel. The barriers are time and the accounts. If you have two clean filed years, a supportable margin and eight weeks, start there. If any of those three is missing, that is why this panel exists.

Sometimes, and it is one of the better uses of a facility this size, because consolidating three daily-sweep facilities into one monthly payment can transform cash flow. Capify will refinance a competitor only once that loan is more than half repaid, and it pays the other lender out rather than sitting behind them. Expect any lender to want the redemption figures in writing before it prices.

Sources and method

Lender ranges were checked against the sources below on 7 September 2026. Panel counts come from our September 2026 lender-platform extract, available products only.

Funding Circle, homepage product table (Growth Guarantee Scheme £25,001 to £250,000 from 13.4% a year; business loan from 6.9% a year)
Funding Circle, support pages (Growth Guarantee Scheme guarantee wording, principal private residences excluded)
Fleximize, secured business loans (equitable charge, no loan-to-value limits on terms up to 24 months, same-day release)
Fleximize, FAQs (unsecured to £500,000, four months of revenue, debenture wording, two months on secured)
Bizcap, secured business loans and bridging finance (£30,000 to £1,000,000, five months trading, 48-hour funding, £150,000 bridging floor)
Bizcap, FAQs (charge over assets above £30,000)
Capify, homepage and FAQs (£10,000 to £3,000,000, top pricing tier, 3 to 24 month unsecured terms, refinance rule)
Nucleus Commercial Finance, Business Loan factsheet (25% of turnover cap, from 14.5% a year, homeowner guarantee)
iwoca, calculator and FAQ (20% of annual turnover, fee on terms beyond 24 months)
Swishfund, FAQs (funding times above £75,000, straight-line interest, 24-month maximum)
Bank of England, Bank Rate 3.75% as at 7 September 2026
CapExpand funding fact check, September 2026 (HMRC late payment interest 7.75%; bank unsecured term lending 7% to 11% a year)
CapExpand panel extract, September 2026 (35 unsecured brands and 72 products at £250,000; 17 secured lenders, terms 12 to 360 months)