Business loan

Borrowing a fixed sum repaid over a term. Predictable, and secured on something.

What it means

A term loan advances a lump sum repaid with interest over an agreed period, secured or unsecured.

Why it matters

It suits a known one-off need — equipment, a fit-out, an acquisition — where the asset or the return lasts as long as the loan.

What it looks like in practice

Compare on the total cost of credit, not the headline rate: arrangement fees, early repayment charges and whether interest is fixed or variable.\n\nThe Recovery Loan Scheme's successor, the Growth Guarantee Scheme, provides a government guarantee to the lender — not to you.

What to watch out for

Government-backed does not mean you are off the hook. The guarantee protects the lender, and personal guarantees are still commonly required above a threshold.

Where to get proper advice

An FCA-registered commercial finance broker, and your accountant on affordability. The British Business Bank's guidance is independent of any lender.