Limited Company Business Loan

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    Limited Company Business Loans | Gable Business Finance

    Introduction

    At Gable Business Finance, we specialise in helping UK limited companies secure the funding they need to grow, manage cash flow, or invest in opportunities. Limited company business loans are tailored specifically for incorporated businesses, taking into account company accounts, director involvement, and commercial viability.

    Whether your company is a start-up, a growing SME, or an established business looking to expand, a limited company loan provides the capital to achieve your objectives while protecting personal assets and optimising tax efficiencies.


    What is a Limited Company Business Loan?

    A limited company business loan is a facility provided to an incorporated business rather than an individual. The lender evaluates the company’s trading history, financial statements, and management accounts, and often requires director guarantees or security for larger loans.

    Key Features:

    • Loans are offered in various forms: term loans, asset finance, bridging finance, and commercial mortgages.
    • Amounts can range from small working capital loans to multi-million-pound facilities.
    • Repayment terms vary depending on loan type, purpose, and risk assessment.

    Limited company loans are essential tools for businesses that want to separate personal and business liabilities, enabling directors to raise finance without directly risking personal assets (unless personal guarantees are requested).


    The Benefits of a Limited Company Business Loan

    1. Access to Larger Funding Amounts

    Lenders often prefer lending to limited companies because they are separate legal entities with clear financial records. This makes it possible to access larger facilities than sole traders might be able to obtain.

    2. Credibility with Lenders

    Limited companies are viewed as professional, regulated entities. Lenders assess company accounts, cash flow, and corporate structure rather than relying solely on personal credit scores, which can improve approval chances.

    3. Tax-Efficient Structure

    Interest on business loans is usually tax-deductible, which can reduce the effective cost of borrowing. Structured properly, limited company loans can help optimise the business’s financial strategy.

    4. Flexibility Across Finance Types

    Limited companies can access a wide range of finance options, including:

    • Asset finance and leasing for machinery or vehicles.
    • Commercial mortgages for property acquisition or refinance.
    • Invoice discounting and trade finance.
    • Bridging and short-term working capital loans.

    This flexibility allows businesses to choose the most suitable facility for their unique situation.


    Types of Limited Company Business Loans

    1. Term Loans

    Term loans provide a fixed sum of capital with agreed repayment terms, typically over 1–10 years. These loans are suitable for:

    • Expansion projects
    • Capital expenditure (equipment, vehicles, or technology upgrades)
    • Business acquisitions

    Advantages: Predictable repayment schedule, competitive interest rates, and structured planning.
    Considerations: Some lenders require security or director guarantees for larger loans.

    2. Asset Finance

    Asset finance includes hire purchase, finance leases, and equipment loans, allowing companies to acquire assets while spreading the cost over time.

    Benefits:

    • Preserves working capital
    • Faster approval compared to traditional bank loans
    • Flexible repayment schedules linked to asset life

    Use Cases: Manufacturing machinery, vehicles for logistics, IT hardware upgrades, or other business-critical equipment.

    3. Commercial Mortgages

    Limited companies often require commercial mortgages for purchasing or refinancing business premises. Lenders focus on:

    • Company accounts and trading history
    • Rental income or projected cash flow from the property
    • Loan-to-value (LTV) ratios

    Benefits: Enables property acquisition without depleting working capital; interest may be tax-deductible.
    Use Case Example: Expanding into a larger office or warehouse to accommodate business growth.

    4. Bridging Loans

    Bridging loans are short-term facilities, typically 3–12 months, designed to cover urgent funding needs, such as property purchases or temporary cash flow gaps.

    • Fast access to funds
    • Usually secured against property or other assets
    • Repaid via refinancing or sale of the asset

    Ideal For: Property developers, companies seeking rapid acquisitions, or businesses managing temporary financial gaps.

    5. Invoice Finance & Factoring

    Invoice finance enables limited companies to unlock cash tied up in unpaid invoices.

    • Factoring: Sells invoices to a finance provider at a discount.
    • Invoice discounting: Loans against invoices while the company retains control of collections.

    Benefits: Improves cash flow, reduces reliance on overdrafts, and supports day-to-day operations.

    6. Merchant Cash Advances

    Merchant cash advances provide immediate funding based on projected card sales, offering a flexible repayment tied to revenue.

    Suitable For: Retail or hospitality businesses with predictable card transaction volumes.


    Eligibility Criteria for Limited Company Loans

    Lenders assess limited companies differently than sole traders or partnerships. Typical eligibility requirements include:

    1. Trading History: Most lenders prefer at least 12–24 months of trading, though start-ups may still access asset finance or invoice-based facilities.
    2. Financial Statements: Up-to-date management accounts or audited accounts are required.
    3. Company Structure: Registered as a limited company with Companies House.
    4. Creditworthiness: Both company and director credit scores are reviewed.
    5. Security (if applicable): Assets or property for secured loans; personal guarantees may also be requested.

    Gable Business Finance assesses your company profile and aligns you with lenders whose criteria match your situation, improving chances of approval and competitive rates.


    How Gable Business Finance Supports Limited Companies

    1. Assessment: Understanding your funding requirements and cash flow.
    2. Loan Type Selection: Identifying the most suitable loan type, from term loans to invoice finance.
    3. Lender Matching: Accessing a wide panel of high-street and specialist lenders.
    4. Application Guidance: Preparing documentation, negotiating terms, and submitting applications.
    5. Ongoing Support: Advising on repayment, refinancing, or combining facilities for optimal financial management.

    Repayment Strategies

    Effectively managing repayment of a limited company business loan is key to sustaining operations and avoiding cash flow issues.

    1. Forecast Cash Flow: Develop detailed cash flow projections to ensure your business can comfortably service the loan throughout the term.
    2. Align Loan Term with Purpose: Short-term loans suit urgent working capital needs, while term loans are better for expansion and capital expenditure.
    3. Consider Early Repayment: Paying off the loan early can reduce interest costs and strengthen your credit profile.
    4. Use Funds Strategically: Allocate funds specifically to the purpose outlined in your application.
    5. Combine Finance Options: Using multiple finance products (e.g., term loan + invoice finance) can optimise flexibility and cost-efficiency.

    Case Studies

    1. Growing Manufacturing Company

    Background: A limited company manufacturer needed £250,000 to upgrade machinery and increase production capacity.
    Solution: Gable arranged a 5-year term loan combined with asset finance.
    Outcome: Production capacity increased by 40%, orders were fulfilled on time, and revenue improved significantly.

    2. Tech Start-Up Expansion

    Background: A tech start-up required funding to hire additional staff and purchase software licenses.
    Solution: A 12-month unsecured limited company loan was arranged through a specialist lender.
    Outcome: The company scaled operations, gained new clients, and repaid early, improving its credit profile.

    3. Commercial Property Acquisition

    Background: A limited company property investment firm wanted to purchase a warehouse for lease but needed capital for both purchase and refurbishment.
    Solution: Gable structured a commercial mortgage combined with a short-term bridging loan.
    Outcome: The property was acquired, refurbished, and rented successfully, ensuring steady cash flow.


    FAQ – Limited Company Business Loans

    Q: Can start-ups access limited company loans?
    A: Yes. Specialist lenders offer finance for new limited companies, particularly asset finance or invoice-based facilities, provided a strong business plan is presented.

    Q: Are director guarantees always required?
    A: Not always, but larger or secured loans often require personal guarantees. Gable advises on mitigating personal risk while meeting lender requirements.

    Q: What documentation is needed?
    A: Typically, company accounts, bank statements, tax returns, director ID, and cash flow projections. We guide you to prepare a strong application.

    Q: How long does approval take?
    A: Depending on the loan type, approval can be as quick as 24–72 hours for short-term loans or several weeks for commercial mortgages or larger term loans.

    Q: Can companies with imperfect credit still borrow?
    A: Yes. Lenders consider trading performance and future cash flow. Gable matches businesses to lenders willing to accommodate less-than-perfect credit histories.


    Why Choose Gable Business Finance?

    • Expert Knowledge: Experienced advisers understand limited company lending.
    • Wide Lender Access: From high-street banks to specialist finance providers.
    • Tailored Solutions: Loan structures designed around your business needs.
    • Transparent Process: Clear terms, fees, and guidance throughout.
    • Ongoing Support: Advice on refinancing, combined facilities, or future borrowing.

    Take the next step with Gable Business Finance and secure the funding your limited company needs to grow, invest, and thrive.