UK business loan rates 2026
UK business loan rates in 2026 sit at 6.9% to 26.9% APR for mainstream unsecured term loans, from 6.5% APR for asset finance, and effective APRs of 30% to 90% for merchant cash advance (factor rates 1.10 to 1.45). Bank of England base rate is 3.75% as of April 2026. The rate you are offered depends on five inputs: trading time, turnover, credit profile, security and product. The cleanest applicants get the headline; most land mid-range.
Director, BestBusinessLoans
Oliver leads BestBusinessLoans's editorial reviews and methodology. With a background in UK commercial finance, he oversees lender research, rate verification and review independence.
Last reviewed: 26 April 2026
Where rates sit in April 2026
Bank of England base rate is 3.75%. Mainstream UK SMB term loans price between 6.9% (top-tier applicants) and 26.9% (sub-prime / specialist). Asset finance prices from around 6.5% APR for clean credit. MCA pricing uses factor rates of 1.10 to 1.45 over typical 6 to 12 month terms; effective APR equivalent is 30% to 90%.
What drives your rate
Five inputs: trading time, turnover, credit profile (business and personal), security on offer, and the product itself. A 10-year-old Ltd with clean credit and £2m turnover applying for a £100k secured term loan lands near the headline rate. A 14-month-trading sole trader with a recent missed payment lands at the top of the range or is declined.
How base-rate changes flow through
SVR-linked products move with base rate immediately. Fixed-rate products are priced relative to expected base rate over the term, at signing, you lock in the lender's view of where rates are going, not today's base rate. When base rate falls, new fixed-rate offers fall but existing fixed-rate loans do not.
Effective APR vs headline rate
Headline rate (e.g. "from 6.9%") and effective APR (rate plus all fees plus prepayment economics) often differ. Always ask for the effective APR before signing. For MCA, ask for the equivalent APR rather than just the factor rate.
FAQ
Will rates fall in 2026?
Market expectation as of April 2026 is for one or two further small base-rate cuts. New fixed-rate offers should follow. Existing fixed-rate loans will not move.
Is variable or fixed better right now?
Depends on your view of where base rate goes. If you expect cuts, variable lets you ride them down. If you expect rises or just want certainty, fixed locks the cost in. Most UK SMB borrowers prefer fixed for predictable cashflow.
Reviewed by Oliver Mackman, Director. Last reviewed: 2026-04-26.