Large business loans explained, how to qualify and apply

Growing a business can cost more capital than your business has on hand, whether that’s planning to buy new equipment, or taking on a new contract. A large business loan can provide the funding you need to take that next step. In this guide, we’ll explain everything you need to know about large business loans, how they work, how to qualify, and how to choose the best option for your business.

How to get a large business loan

Getting a large business loan starts with understanding what lenders are looking for and preparing your business finances carefully. Large loans mean higher risk for lenders, so they will want reassurance that your business is in a strong position to repay the funds.

Here’s what you should do before applying:

1. Check your business credit score
   Your business credit score is one of the first things lenders will check. A high score shows that your business pays bills on time, manages credit responsibly, and is financially stable. You can check your business credit score with Capitalise, just sign up for free to get started, you’ll see where you stand and get personalised tips on how to improve it before you apply.

2. Gather your financial documents
   Lenders will usually want to see at least six months of bank statements, recent management accounts, and your latest filed accounts. Having this information ready can speed up the process and show that your business is organised and transparent.

3. Know how much you need and why
   Be clear about the amount you want to borrow and exactly how you plan to use it. Lenders prefer to see that you have a well thought out plan for using the funds to generate growth or improve cash flow.

4. Compare lenders and loan types
   Different lenders offer different types of large business loans. Traditional banks, challenger banks, and alternative finance providers all have their own criteria. Using a platform like Capitalise means you can compare loans from over 130 lenders in one place and receive support from one of our expert funding specialists, saving time and helping you find the most suitable option.

How to get a large business loan with no money

If your business doesn’t have significant cash reserves, getting a large loan can feel more difficult, but it’s not impossible. There are several types of funding designed to help businesses access capital even if they don’t have large amounts of money in the bank:

• Asset finance
  If your business owns assets such as property, vehicles, or equipment, you can use them as security to access a larger loan. Asset finance allows you to release the value tied up in your assets, helping you raise funds without needing significant cash reserves.

• Invoice finance
  If your business has outstanding invoices, invoice finance allows you to unlock up to 90% of their value immediately. When your customers pay, the balance (minus fees) is returned to you. This can be a smart way to access larger sums of money without upfront capital.

• Revenue based finance
  Some lenders offer loans that are repaid as a percentage of your future revenue. This means repayments adjust with your business income, which can be helpful if your cash flow fluctuates.

Even if you currently have limited funds, you can improve your eligibility for larger loans over time by building a strong credit history, maintaining steady revenue, and keeping financial records up to date.

How to qualify for a large business loan

Every lender has slightly different approval criteria, but most will look closely at a few key areas before offering a large business loan.

1. Business age and stability
   For large loan amounts, lenders tend to require businesses that have been trading for at least 12 - 24 months. This provides enough history to assess performance and reliability.

2. Turnover and profitability
   The size of the loan you qualify for often depends on your turnover and profit margins. Lenders want to see that your business has consistent revenue and enough to cover repayments comfortably.

3. Credit history
   Your business credit score will be reviewed to assess whether you will be offered a loan. A good credit score shows responsible borrowing and repayment behaviour, which can help you access larger loans at better rates.

4. Debt to income ratio
   Lenders assess how much existing debt you already have and whether your business can realistically handle additional borrowing.

5. Purpose of the loan
   Be clear about how you intend to use the funds. Whether it’s for expansion, working capital, or a major purchase, a clear business case can strengthen your application.

How large of a business loan can I get?

Understanding how much you can borrow starts with getting a clear picture of your business’s financial position. Every lender will assess different factors, such as your revenue, cash flow, credit score, and existing debts, before deciding how much funding to offer. One of the easiest ways to estimate this is by using a business loan calculator. A calculator helps you see what your potential repayments might look like based on different loan amounts, interest rates, and repayment terms. This can give you a realistic idea of what your business can afford to borrow before you apply. Ultimately, lenders will base the amount on what your business can reasonably afford to repay. Using a platform like Capitalise helps you get matched with lenders who are most likely to approve the amount you need, saving time and helping you find the best option.

How to get a large loan to start a business

Securing a large loan to start a business can be more challenging because new companies don’t yet have trading history or financial records. However, there are still some routes available:

• Government start up loans
  The UK government offers Start Up Loans of up to £25,000 per business owner, with fixed interest rates and free mentoring. While not technically “large” loans, they can be a strong foundation for getting your business off the ground.

• Secured loans
  If your business owns property or other valuable assets, you can use them as collateral to secure a larger loan. This reduces the lender’s risk, which can make them more willing to offer higher amounts since they have the option to recover their funds if the loan isn’t repaid.

• Angel investment and venture capital
  For high growth startups, investment funding can provide significant capital in exchange for equity. This may suit businesses with strong potential but limited trading history.

Even if you can’t secure a large loan immediately, building a strong credit profile and developing steady revenue can open the door to larger funding in the future.

Applying for a large business loan

Understanding your options and financial position can make applying for a large business loan much simpler. With a Capitalise account, you can check your business credit score, see how much you could be eligible to borrow and explore a range of finance options in one place. Along with dedicated support from a funding specialist, we can help you make informed decisions and find the right finance to support your growth. Apply today to get started.