NatWest small business loans: what is on offer and who qualifies

The NatWest Small Business Loan is a fixed-rate term loan of £1,000 to £100,000, repaid monthly over 1 to 7 years. NatWest’s product page says the repayments stay the same throughout because the rate is fixed, and that you will not pay set-up fees or early repayment or closure fees. Each repayment covers capital and interest.

NatWest also lists what the loan does not do:

• You can’t take a repayment holiday.
• You can’t draw the loan in instalments (tranches). You receive it in one go.
• A personal, director or member’s guarantee may be required.
• It is for business use only, and subject to status.

NatWest says its rate depends on the loan term, the amount and your credit status, so the rate you are offered can differ from its representative APR. If you want to compare the bank against other kinds of lender, our guide on how to compare business loan lenders sets out what to check beyond the rate.

NatWest publishes four criteria for applying for its Small Business Loan:

• You are aged 18 or over.
• You are a director of the business you are applying for.
• You have not been declared bankrupt or received a County Court Judgment (CCJ) or Court Decree.
• You hold a business current account with any provider.

Meeting the criteria lets you apply. It does not mean you will be approved: NatWest still assesses affordability and credit. Its page gives one practical tip: declare your income accurately, because if you declare £250,000 and NatWest sees £180,000 going through your NatWest account, your application may be referred or declined. It also asks you to keep your personal and business details at Companies House up to date.

The application asks for:

• Your address history for the past three years.
• The date your business started trading.
• Turnover for the last 12 months and projected turnover for the next 12.
• Net profit for the last 12 months.
• Existing business loans, overdrafts, personal loans, mortgages and credit cards, with their repayments.
• Details of your business current account with any provider.

Our guide to business loan requirements covers the documents lenders ask for more generally.

No. NatWest says you are not required to open or maintain a business current account with it to obtain or manage a business loan. You do need a business current account with some provider. In some cases NatWest asks you to open a fee-free Loan Servicing Account, which it says is used only to run the loan and is not a business current account.

Customers who already have NatWest Online Banking can log in and get a quote. Those who do not bank with NatWest complete an online application form, and NatWest says it will be in touch about next steps. If you later move your day-to-day banking elsewhere, NatWest says you can keep the loan.

NatWest offers two tools before you apply. The Small Business Loan calculator lets you enter an amount and term to see possible repayments. The quote, or eligibility check, uses your details to show what you could borrow and at what rate. NatWest says getting an indicative quote does not affect your credit score, but that if you go on to apply and consent to a credit check, the outcome may affect it.

That difference matters if you are approaching several lenders. A soft search leaves no mark that other lenders can see, while a hard search at full application does. Our guide to soft and hard credit checks explains the difference.

NatWest’s Fixed and Variable Rate Loans start at £25,001. On a fixed rate it publishes a maximum of £10m, and on a variable rate it publishes no upper limit. Both have repayment terms up to 25 years.

NatWest says its online quote for these loans shows whether you are likely to be approved up to £750,000, and that larger enquiries go to a dedicated team. Any security fee follows its security fee tariff.

NatWest also lends under the Growth Guarantee Scheme. Its scheme page gives term loans from £25,001, generally up to £2m per business group, over three months to six years. The government guarantee of 70% is to the lender: NatWest’s page says the borrower remains 100% liable for the debt, and a principal private residence cannot be taken as security under the scheme.

NatWest’s Small Business Loan asks for the date your business started trading and its turnover, and is written for businesses that are already trading. For a business that is new or not yet trading, the government-backed Start Up Loan is the route most founders look at, whichever bank they use.

GOV.UK says a Start Up Loan is £500 to £25,000, an unsecured personal loan at a fixed 7.5% a year, repaid over 1 to 5 years, with no application or early repayment fee and up to 12 months of free mentoring. You must live in the UK, be 18 or over and have, or plan to start, a UK business that has been fully trading for less than five years. Our guide to start-up business loans covers the other options.

A decline from one bank is a decision about that application against that bank’s criteria. Before reapplying anywhere, ask why, then fix what you can. Our page on why business loans get declined covers the common reasons.

Other routes depend on what the money is for:

• Unsecured loans from other lenders. Online and challenger lenders publish their own criteria. Our directory of UK business lenders sets out each one’s published terms.
• A revolving facility. For costs that rise and fall, a business overdraft or line of credit may fit better than a term loan.
• Asset finance. For vehicles and equipment, asset finance uses the asset as security.
• Invoice finance. If customers pay you on credit terms, invoice finance advances money against unpaid invoices.

Capzy is a credit broker, not a lender, and the lender pays us when a facility completes. You can check your funding options with a soft search that does not affect your credit score. A lender’s full application may use a hard search, and all funding is subject to status and lender criteria. We do not give financial advice.