How Much Can My UK Business Borrow? A Guide to Lending Criteria
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.
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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% of annual turnover or 1-2 times average monthly revenue. A business with £600,000 annual turnover might typically access £120,000-£150,000 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% of net monthly cash flow. A business with £15,000 per month of net cash flow can typically service repayments of £3,750-£6,000 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% for owner-occupied commercial property and 60-70% for investment property. On a £1 million commercial property, 65-75% LTV gives access to £650,000-£750,000, 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 with a £300,000 first mortgage has £500,000 of equity, of which 65-75% (£325,000-£375,000) 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% 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% 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% 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%). For a business with £400,000 of outstanding invoices at an 85% advance rate, £340,000 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.
Check your eligibilityAbout the author
Callum Pond
Manager
Callum manages a portfolio of commercial finance cases at Spark Finance, specialising in structuring lending for growth-stage businesses and management buyouts. He has arranged facilities from short-term working capital loans to multi-million pound secured deals.
