How Much Can I Borrow for a Business Loan UK?
Finn Murphy
Relationship Manager · Mar 10, 2024 · 6 min read
How much you can borrow for a UK business loan depends on the product type, your business's financial profile, and what security (if any) you can provide. There is no fixed upper limit for secured lending, and unsecured amounts vary widely by lender. This guide gives you a practical framework for estimating your maximum borrowing.
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Unsecured borrowing: the revenue multiple rule of thumb
For unsecured business loans, most lenders use your average monthly revenue as the primary sizing input. A common rule of thumb is that lenders will consider advancing up to 1 to 2 times your average monthly turnover. A business averaging £50,000 per month might access £50,000 to £100,000 unsecured. This is a starting point, not a formula, and lenders adjust based on profitability, cash flow, sector, and credit profile.
Fintech lenders often move faster using open banking data but cap amounts at lower levels, typically £10,000 to £250,000. Traditional and relationship lenders take longer but can offer higher amounts on a more bespoke basis. For amounts above £500,000 unsecured, lenders require very strong financials and usually some form of additional comfort.
Secured borrowing: property equity drives maximum amounts
For secured loans against property, the maximum is driven by the loan-to-value ratio. If commercial property is worth £500,000 and the lender lends up to 65% LTV, the maximum loan is £325,000. If the property has an existing mortgage of £150,000, the available equity reduces accordingly. Residential property used as security typically allows up to 70% to 75% LTV for a second charge.
For very large facilities (£1M+), lenders assess the full balance sheet: total assets, existing liabilities, and the ability to service the debt from cash flow. For businesses with high asset values or strong recurring revenue, amounts well into the millions are achievable through the right lender.
"The limit is not the amount you want to borrow. It is the amount your business can demonstrably afford to repay. Lenders are trying to confirm the second thing, not restrict the first."
- Finn Murphy, Relationship Manager
Frequently Asked Questions
Can I borrow more than my annual turnover as a business loan?
For unsecured borrowing, exceeding annual turnover is rare. For secured lending against property, the available amount is driven by equity rather than turnover, so it is possible to borrow more than turnover if sufficient property equity is available.
The bottom line
Spark Finance can give you a realistic view of your borrowing capacity in a soft-search eligibility check. Start at apply.sparkfinance.co.uk.
Check your eligibilityAbout the author
Finn Murphy
Relationship Manager
Finn is a Relationship Manager at Spark Finance focused on asset finance and equipment funding for UK businesses. He has placed hire purchase, finance lease, and operating lease facilities across construction, healthcare, and manufacturing sectors.
