How Much Can My UK Business Borrow? A Guide to Lending Criteria
Callum Pond
Manager · Feb 28, 2026 · 7 min read
One of the most common questions from UK business owners approaching lenders is: how much can I actually borrow? The honest answer depends on the product type, the business's financial profile, and what security is available. This guide explains the specific metrics lenders use to calculate their maximum lending amount for each major product category.
Unsecured business loans: turnover and serviceability
For unsecured business loans from most UK lenders, the maximum amount is typically expressed as a multiple of monthly turnover or as a percentage of annual turnover. Most unsecured lenders will advance up to 20-25 percent of annual turnover or 1-2 times average monthly revenue. A business with 600,000 pounds annual turnover might typically access 120,000-150,000 pounds unsecured.
Serviceability is the other constraint: the monthly repayment on the proposed loan must be serviceable from the business's net monthly cash flow (income minus costs minus existing loan repayments). Lenders typically require that the monthly loan repayment does not exceed 25-40 percent of net monthly cash flow. A business with 15,000 pounds per month of net cash flow can typically service repayments of 3,750-6,000 pounds per month.
Secured business loans and commercial mortgages: LTV
For secured lending against commercial property, the maximum is expressed as a loan-to-value (LTV) ratio. Typical LTVs are 65-75 percent for owner-occupied commercial property and 60-70 percent for investment property. On a 1 million pound commercial property, 65-75 percent LTV gives access to 650,000-750,000 pounds, assuming no existing charge.
If there is an existing charge (first mortgage), the available amount for a second charge loan or remortgage depends on the equity remaining: current market value minus outstanding first mortgage balance. A property worth 800,000 pounds with a 300,000 pound first mortgage has 500,000 pounds of equity, of which 65-75 percent (325,000-375,000 pounds) might be advanced on a new first charge refinancing.
"The maximum a business can borrow is not a fixed number. It depends on which product, which lender, and what financial evidence is provided. Getting the right product for the right purpose is what makes the number meaningful."
- Callum Pond, Manager, Spark Finance
Asset finance: 100 percent of asset value
Asset finance amounts are directly tied to the value of the asset being financed. Most UK asset finance lenders will advance 100 percent of the cost of a new asset (or close to it) for creditworthy businesses. For second-hand assets, the advance is based on the assessed market value, typically 70-90 percent of the value depending on the asset type and condition.
For a fleet purchase, multiple assets are financed separately or as a portfolio, with each individual asset providing security for its own portion of the facility. The total available is the sum of the individual asset values multiplied by the advance rate, which means large fleets can access significant capital through asset finance alone.
Invoice finance: available sales ledger
Invoice finance amounts are not set by a lender limit in the same way as term loans. The amount available at any given time is the qualifying sales ledger value multiplied by the advance rate (typically 80-90 percent). For a business with 400,000 pounds of outstanding invoices at an 85 percent advance rate, 340,000 pounds of funding is available.
The effective limit is therefore the business's debtor book, which grows automatically with revenue. For growing businesses, this self-scaling property means invoice finance provides more capital as the business needs more, without requiring a new application or limit renegotiation.
The bottom line
Spark Finance can give you a realistic assessment of what different products could provide for your specific business profile before any formal application. Apply at apply.sparkfinance.co.uk with an initial soft search.
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