2025 Guide to UK Commercial Loans: What SMEs Need to Know

Access to funding can make or break a business, particularly in today’s fast-paced and competitive landscape. Encouragingly, SME lending in the UK rose by over 30% in the first quarter of 2025 compared to the same period last year. Whether you’re looking to expand, invest in equipment, or manage a short-term cashflow gap, commercial loans remain one of the most effective ways to support business growth.

At Rosewood Finance, we help small and medium-sized businesses across the UK secure the funding they need, comparing over 300 lenders to find the best possible deal, every time.

What is a commercial loan?

A commercial loan is a type of business finance designed to help cover operational costs, support growth, or resolve cashflow challenges. Unlike personal loans, commercial finance is tailored to business needs, and can take many forms depending on your sector, turnover, and specific requirements.

Types of commercial loans in 2025

Here’s a breakdown of the most popular commercial finance solutions available to UK businesses in 2025:

1. Unsecured business loans

• Ideal for: SMEs with steady cashflow but limited assets
• Benefits: No security required, quick approval
• Rates: Starting from 4.5% APR

2. Secured business loans

• Ideal for: Larger borrowing or asset-rich businesses
• Benefits: Lower interest rates, flexible repayment terms
• Rates: From just 1.10% APR

3. Asset finance

• Ideal for: Purchasing machinery, vehicles, or equipment
• Benefits: Preserves cashflow, spreads cost over time
• Rates: Fixed for 2–5 years

4. Invoice finance

• Ideal for: Businesses with long customer payment terms
• Benefits: Unlocks working capital tied up in unpaid invoices
• Rates: Based on invoice value and lender fees

5. Bridging loans

• Ideal for: Property purchases or short-term financial needs
• Benefits: Fast access to funds, highly flexible
• Rates: From 0.65% per month

What lenders are looking for in 2025

UK lenders are increasingly open to supporting viable businesses, but they still expect a solid foundation. Here’s what they typically assess:

• Credit history: Both business and personal
• Trading history: Ideally 12+ months
• Profitability and cashflow: Can you afford repayments?
• Assets: For secured lending
• Clear purpose for the loan: Defined plans build lender confidence

Rosewood Finance takes the stress out of this process by helping you prepare a strong application and presenting it to the most appropriate lenders.

How Rosewood Finance can help

Unlike traditional banks that often have strict criteria, we work with over 300 commercial lenders, including high-street names, challenger banks, and specialist providers. That means we can:

• Secure highly competitive rates (from just 1.10% APR)
• Arrange loans from £10,000 up to £10 million
• Tailor repayment structures to suit your business
• Speed up decisions with pre-qualified lending options

You’ll receive personalised guidance throughout the process, from initial assessment to funds being released.

Case study: Supporting retail growth in the midlands

One of our recent clients, an independent homeware retailer based in the Midlands, came to us looking for £250,000 to renovate their flagship shop and launch a second branch. Their bank turned them down due to limited trading history at the new location.

We successfully matched them with a specialist lender offering:

• £250,000 secured loan
• A 5-year term at just 1.49% APR
• Approval within 48 hours
• Funds released in under a week

As a result, both projects were completed on time, and the business has since seen a 40% uplift in sales.

Final thoughts

Commercial loans in 2025 are more diverse, accessible, and competitive than ever before. With the right support, businesses of all shapes and sizes can secure the funding they need to grow confidently and sustainably.

At Rosewood Finance, our job is to make the process smooth, efficient, and tailored to your needs. Whether you’re just starting out or planning your next big move, we’re here to help.

Ready to explore your options? Get in touch with Rosewood Finance today for a free, no-obligation funding review.