The cheapest-looking loan is not always the best. Comparing business loans properly means weighing total cost, flexibility and fit — not just the headline rate.
1. Total cost, not just the rate
Compare the total amount repayable and the representative APR, then add every fee: arrangement, early repayment, late payment and any broker charges. A low rate with heavy fees can cost more than a higher rate with none.
2. Repayment structure
Fixed monthly instalments make budgeting easy; flexible options like a merchant cash advance flex with income. Check the term length and whether you can overpay without penalty.
3. Speed and effort
If you need funds this week, prioritise lenders with automated, open-banking decisions. Weigh how much paperwork each requires.
4. Eligibility and security
Match offers to what you can realistically get — trading time, turnover, credit profile, and whether a personal guarantee or asset is required. Read secured vs unsecured to weigh the trade-offs.
5. Lender reputation
Check FCA authorisation, reviews and the clarity of terms. Avoid anyone demanding fees before an offer.
Mistakes to avoid
- Making multiple hard credit applications — use a soft-search comparison instead.
- Borrowing more than the purpose needs.
- Ignoring early-repayment penalties.
The shortcut
A whole-of-market broker compares 40+ lenders from one soft-search application, so you see real, comparable offers side by side. Get a free quote to start.
Frequently asked questions
What is the difference between APR and factor rate?
APR expresses annualised interest on a loan; a factor rate is a flat multiplier used by merchant cash advances. They are not directly comparable, so look at total cost in pounds.
Will comparing loans affect my credit?
Comparing through a broker uses a soft search; a hard check only happens when you formally apply with a chosen lender.
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Get your free quoteThis article is general information, not financial advice. Eligibility, rates and terms vary by lender and your circumstances. The Loans Hub is a finance broker, not a lender.
