50K Business Loans

Business loans of around £50k generally fall into the small business loans category, so there are thousands of options from high street banks to niche lenders, alternative financiers, and long-term investment.

50K Business Loans

When a business identifies a need for finance, there are all sorts of options to choose from.

You can raise capital by selling assets, reducing operations, or taking out a loan - which is usually the most attractive opportunity to improve your profitability and keep trade ticking over nicely!

Business loans of around £50k generally fall into the small business loans category, so there are thousands of options from high street banks to niche lenders, alternative financiers, and long-term investment.

Today our mortgage brokers team explains a few of the crucial factors when applying for a 50k business loan; to streamline your application and help you make informed choices.

If you'd like advice from the independent, whole-of-market business loan experts, please get in touch at 0330 304 3040 or message us at info@revolutionbrokers.co.uk.

Can I Get an SME Business Loan for £50,000?

The business loans market is substantial, and there are more lenders than ever offering small business loans for £50,000.

Each bank has a policy defining the minimum and maximum they will lend, often calculated against your turnover or company profits.

If you need a loan for £50,000, you can apply if you are an SME or any size company trading in the UK with a legitimate business purpose.

How Does Getting a Small Business Loan Differ From Personal Finance?

Business loans are very similar to everyday personal loans. The key difference is that they are only available to companies or registered businesses.

That eligibility also depends on the lender.

Some banks lend only to limited companies registered with Companies House.

Others specialise in start-up loans for new enterprises or self-employed loans for sole traders, so it's essential to work with an independent broker to direct your application to the best-suited provider.

What Types of 50K Business Loans Are There?

UK businesses can take out a range of 50k business loans, so the first step is to identify the purpose of the borrowing and how long you need it for.

Examples of loan products include:

  • Unsecured business loans for short-term requirements.
  • Working capital facilities to regularly top up your available cash.
  • Company loans with a conventional repayment structure.
  • Self-employed loans designed for sole trader businesses.
  • Asset finance usually leveraging customer invoices to raise finance against future income streams.

The best 50k business loan for you depends on exactly why you want a loan and how that ties into your ongoing business plans.

For example, a company loan is only a sticking plaster solution if you regularly need small amounts of financing to supplement your cash flow - in which case a working capital facility might be more appropriate.

How Does a 50,000 Business Loan Work?

A business loan for £50,000 usually falls under the remit of a small business loan. However, you may well want to apply for a similar financing level for a more significant business.

There are many ways to apply, such as through your regular bank, through investment loans, or on an online platform, so there isn't just one type of loan that offers this level of borrowing.

Conventional loans work whereby you apply for a fixed value - £50,000 in this case. The bank will need to know the business purpose for the loan.

You pay interest on the borrowing and repay the debt every month. Each payment includes an element of capital and interest, so when you get to the end of the loan term, the debt is repaid in full.

Terms on £50k loans vary, but you're looking at anything from two to five years as an average.

There are both secured and unsecured loans available for this amount, so it's up to you whether you have a business asset to offer as security or want to take out an unsecured loan.

With advantages and disadvantages to both, it's vital to understand the comparable costs, interest rates and risks.

For example, a secured loan is often cheaper because the lender has a business asset as security and won't charge as high an interest rate. However, you stand to lose your asset if anything goes wrong and you can't repay the loan.

Unsecured lending is faster, easier to apply for, and usually more flexible. The pitfall is that costs tend to be higher, and you might be asked for a personal guarantee.

How to Get a Business Loan for £50k?

High street banks will typically consider your application if you have been trading for at least two years.

Don't panic if your business is newer, as niche lenders will work on forecasts and management accounts if you haven't been trading for as long.

The standard criteria include things like:

  • Being registered as a limited company or limited liability partnership (LLP).
  • Having at least two years of filed accounts.
  • Trading in the UK, with a registered domestic office.

However, let's reiterate that those are basic policies for most mainstream lenders and aren't a universal requirement!

Alternative lenders usually take a case-by-case view, so they won't be as concerned with ticking boxes as with analysing the risk exposure of the loan and identifying whether they feel confident the business will be able to pay back the lending.

A lot also depends on the purpose of the loan, so if you can clarify what you want the financing for and how it will improve your turnover in the future, it will improve your chances of approval.

Can I Apply for Small Business Loans Bad Credit Permitting?

If you have bad credit or know that there are a few issues on your credit file, it can be daunting to apply for a £50k business loan with the risk of being rejected.

The great news is that many niche lenders offer business support loans and will look at various other criteria to decide whether they can lend.

That could be evaluating the viability of your plan, projected sales, forward contracts, latest year profits or another metric that supports your loan application, even if you've had some trading difficulties in the past.

What Documents Do I Need to Apply for Small Business Loans Bad Credit?

The paperwork for a small business loan with adverse credit is the same as for any other loan. Usually, the lender will ask for context to understand your trading position and assess the risk associated with the loan.

Most lenders will ask for:

  • Bank statements for the last eight months (although this varies between lenders and could be more or less!). Lenders check your bank statements to verify your registered address and should be in the business's name with all your regular transactions and showing the sort code and account number.
  • Complete sets of unabbreviated accounts, usually for the last two trading periods. Most business loan providers will ask for the latest sets of filed accounts, and they'll want a full, unabbreviated version if you file micro or abbreviated reports with Companies House.

Accounts need to include your profit and loss account, a detailed profit breakdown, and your balance sheet.

How to Get a Business Loan If I've Been Turned Down Before?

The first thing to mention is that if one lender has refused your 50,000 business loan application, that doesn't automatically mean another will do the same.

There could be many reasons for the rejection, and it could be as simple as applying to a more suitable lender with less rigid application policies.

You can also take proactive steps to improve your chances of loan approval, such as:

  • Review your financial performance and provide more accurate forecasts to show how the loan will enhance your profit margins.
  • Work on improving your credit score, perhaps by closing unused accounts, repaying small debts and keeping your payments up to date.

The best way to find a business loan if you've been turned down is to work with an independent broker, such as the Revolution team, to package your application correctly and demonstrate how you can mitigate the lender's risk.

Advice Finding Business Loans For Small Business

If you need a small business loan, you can borrow from a vast range of lenders. One potential option is to look for a loan backed by the government Recovery Loan Scheme.

A bonus is that you won't be asked to provide a personal guarantee for amounts under £250,000, and so you can secure your £50,000 business loan without putting your private assets at risk.

Business loans can feel hard to qualify for, but with a skilled broker on your side, you have access to the whole-of-market, meaning you get better deals with more competitive rates that you wouldn't find through your regular high street bank.

If you're looking for a £50k loan and aren't sure where to start or have been turned down elsewhere, please give the Revolution Brokers team a call on 0330 304 3040 or drop an email to info@revolutionbrokers.co.uk.

We'll discuss your circumstances and provide independent recommendations about the best borrowing solutions to help your business move forward.

Why Revolution Brokers?
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FCA disclaimer

The content included in our articles, blogs, web pages and news publications is based on information accurate at the time of writing. Note that policies and criteria can change regularly throughout the UK mortgage lending market, and it remains essential to contact the consultation team to receive up to date guidance. The information included on the Revolution Brokers site is not bespoke to any circumstances or individual application scenarios and therefore is not intended to be used as financial advice. The content we share is designed to be informative and helpful but cannot be relied upon to provide individual advice relevant to your mortgage requirements. All Revolution team members are fully qualified, trained and experienced to provide mortgage advice of an independent nature. We collaborate with lenders and providers who are regulated, authorised and registered with the Financial Conduct Authority (FCA). Should you require specific mortgage borrowing types, some products such as buy to let mortgages may not be FCA regulated. The Revolution team can provide further information about regulated and unregulated lending as required. Please remember that a mortgage is a debt which is secured against your home or property. Your home can be at risk of repossession if you do not keep up with the repayments or encounter any other difficulties in managing your mortgage borrowing responsibly. This also applies to any remortgage or home loan secured against your property, including equity release products.

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