Before You SignWhat business finance actually costs, in the UK and the US

Where the money goes

Borrowers negotiate the rate because it is the number they are given. It is only one of five places a facility takes money, and on the offers we have priced it is rarely the largest. Here is the whole cost.

Written by Kaz · Sources re-read 6 September 2026 · Page revised 30 September 2026 · What changed · How figures are checked

1. The spread, not the rate

On an SBA 7(a) loan you do not pay a rate the SBA sets. You pay a base rate plus a spread, and the SBA caps only the spread — at base plus 6.5% for loans of $50,000 or less, base plus 6.0% from $50,001 to $250,000, base plus 4.5% from $250,001 to $350,000, and base plus 3.0% above $350,000.

Two consequences. The base rate moves and takes your payment with it, unless you have fixed. And the size of your loan changes the ceiling on what may be added — which means the amount you ask for is itself a pricing decision.

In the UK the same logic applies with a different reference point: the Bank of England's Bank Rate is 3.75%, held at the July 2026 decision. A variable facility quoted "over base" moves with it.

2. The fees, which are quoted small and charged large

Fees are quoted as percentages, which makes them feel small, and charged up front, which makes them large. For SBA 7(a) borrowing, the upfront fee and the lender's annual service fee are published each fiscal year through an Information Notice; the FY2026 notice is 5000-872051, 7(a) Fees Effective October 1, 2025 for Fiscal Year 2026, issued 28 August 2025. Two of its rules decide who actually carries the cost: the lender pays the upfront fee and is permitted to pass it on to the borrower, and the lender's annual service fee cannot be charged to the borrower at all. Ask for the notice, then ask which of the two fees is in your quote.

The clean version of this cost is rare, and it stands out when you see it. Start Up Loans states: "No fees for arranging the loan or paying it back early." When there is no arrangement fee, the headline rate is close to the real cost. When there is one, it is not.

3. Time, which is priced backwards on some products

On a loan, longer costs more. On a fixed-cost advance, longer costs the same in cash and much less in annualized terms — so a good trading month makes your financing more expensive. The two products cannot be compared without converting both to total cash and an estimated term.

4. The guarantee, which costs nothing until it costs everything

A personal guarantee has no price on the offer sheet. It is still the largest term in the document. In the UK, lending to limited companies where directors provide personal guarantees sits outside the FCA consumer-credit perimeter, so the wording of that clause is the protection you have. Being outside the perimeter is a separate question from whether you can complain: the Financial Ombudsman Service says it can consider complaints from eligible micro-enterprises and small businesses, and from an individual who gave a personal guarantee for their own business's borrowing where the guarantee was given on or after 1 April 2019.

5. The scheme you assumed protected you

The Growth Guarantee Scheme gives the lender a 70% government-backed guarantee against the outstanding balance. "The borrower always remains 100% liable for the debt." Scheme backing improves your chance of approval. It does not reduce what you owe. The scheme was extended to 31 March 2030 at the 2025 Spending Review, and the British Business Bank says it "remains fully operational under the existing terms" while the July 2026 enhancements are being put in place.

Turn an offer into one number

The cost tool converts a term loan, an advance or a revenue-share facility into total cash out of the account and an estimated effective annualized cost, so two offers can sit next to each other. That figure is our own calculation from the payment stream, not a statutory APR. It runs entirely in your browser; nothing you type is sent anywhere, and an offer you save to compare against the next one stays in that browser.

Free, no sign-up

Put your offer's figures in and get the total cash cost and an estimated effective annualized cost.

Open the cost tool

When you are ready to approach lenders

The two buttons below currently lead to our UK and US editorial guides.

United Kingdom

Business facilities for UK limited companies and sole traders. Read the guarantee guide before you apply — the clause matters more than the rate.

Explore UK financing

United States

SBA and conventional business facilities. Ask for the total dollar cost and the estimated term in writing, whichever state you are in.

Explore US lenders

Every figure above is quoted from the source named beside it, on the date shown, or is this site's own arithmetic with its inputs in the text. Which of the two it is, and how each is checked, is set out in the methodology.

Sources

What changed on this page

30 September 2026 Correction — Replaced inactive lender buttons with working links to the UK and US editorial guides, and clarified that these are guides rather than lender shortlists.

7 September 2026 New — The cost tool now asks how often you pay - monthly, weekly or every business day - takes a factor rate directly, and separates a fee deducted from the advance from the amount that reaches your account. How often you pay turned out not to be a detail: the same advance, repaid every business day rather than monthly, does not cost a penny more in cash and returns a materially higher estimated annualized cost, because the money goes back to the lender sooner. Daily and weekly collection is the normal shape of an advance, so the figure the tool gave before was the gentler of the two.

7 September 2026 Your data — The cost tool can now keep up to four offers so it can put them side by side, and can produce a link that carries the figures you typed. Saved offers are written to your own browser on the device you are using; they are not sent anywhere and we never see them. A shared link carries the numbers in the part of the URL a browser does not send to a server. The pages that used to say nothing you type is stored now say what is kept and where, and the privacy page sets out three ways to delete it.

6 September 2026 Correction — The site no longer says that two US states regulate commercial-financing disclosure. Six were confirmed against their own statutes, and the guides now separate the two that require an annualized rate (California, New York) from the four that require itemized dollar amounts only (Florida, Louisiana, Utah, Virginia). The question that matters to a borrower is not how many states have a rule, but whether the rule produces a rate you can hold against a bank quote.

6 September 2026 Correction — California's annualized-rate disclosure was described as expiring. SB 33 removed that sunset, so the requirement continues indefinitely, and SB 362 has required the words annual percentage rate in specified circumstances since 1 January 2026.

6 September 2026 Correction — Whether the FCA regulates a facility and whether the Financial Ombudsman Service can look at a complaint are now treated as two separate questions with two separate tests. The site previously implied that a company borrower outside the perimeter had no ombudsman route. Eligible small businesses can complain, and so can personal guarantors where the guarantee was given on or after 1 April 2019.

6 September 2026 Correction — The SBA fee notice for the 2026 fiscal year was described as unobtainable. It is Information Notice 5000-872051, issued 28 August 2025, and it is now cited by number.

The whole change log