RBS business loans: products, limits and eligibility

RBS publishes two business loan products on its loans and finance pages: the Small Business Loan and its Fixed and Variable Rate Loans. Alongside them it lists a business overdraft, business credit cards, commercial mortgages, real estate finance, asset finance through Lombard, invoice finance through RBS Invoice Finance Limited and Social and Community Capital for organisations that cannot access mainstream loans.

If you are weighing RBS against other lenders, our guide to comparing business loan lenders shows how to line offers up on total cost, fees and security rather than the headline rate.

The Small Business Loan is a term loan for smaller borrowing. RBS says you can borrow from £1,000 to £100,000 on a fixed interest rate, subject to approval, over terms of one to seven years. Because the rate is fixed, the monthly repayment stays the same for the life of the loan.

• Representative APR. The loans and finance page quotes a representative 12.63% APR for loans between £10,000 and £19,999, and says other amounts are available at other rates.
• Fees. RBS says you won’t pay set-up fees, or early repayment or early closure fees.
• Your rate. RBS says the rate you pay depends on your personal circumstances, so it can differ from the representative figure.

RBS says the online application takes around 10 minutes, and that getting an indicative quote does not affect your credit score, while a full application with a credit check may. It also says that, if approved, you could have the money within 24 hours, and on the same day if you are unconditionally accepted and sign your documents by 16:30 on a weekday. Treat that as the bank’s stated aim, not a promise.

For more than £25,000, RBS offers Fixed and Variable Rate Loans. It says you can borrow from £25,001 to £10m on a fixed rate, with no upper limit on a variable rate, and repay over up to 25 years.

• Fixed rate. Rates can be fixed for 3, 5, 7, 10 or 15 years within a repayment term of up to 25 years.
• Variable rate. Terms run from 3 months to 25 years, with interest set above the Royal Bank base rate.
• Capital repayment holiday. RBS describes a capital repayment holiday of up to six months for a “Family First event”, subject to credit approval. Interest is still paid, and the loan may cost more overall.
• Security. The loans and finance page says security may be required, and any security fee is charged under the bank’s tariff.

If the money is for premises, RBS lists a separate commercial mortgage on the same terms from £25,001. Our page on commercial mortgages covers how property-secured lending differs from a term loan.

For the Small Business Loan, RBS lists these requirements:

• 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 or a Court Decree.
• The business holds a business current account with any provider.

You do not need to bank with RBS. The bank says you are not required to open or maintain a business current account with it, although for the larger loans it says a fee-free loan servicing account may be needed in some cases. The application asks for three years of address history, turnover for the last 12 months and projected turnover for the next 12.

A personal guarantee may be part of the deal. Our guide to personal guarantees for business loans explains what signing one means. RBS does not publish a minimum turnover or trading period for the Small Business Loan on the pages we read, so lending is assessed case by case and is subject to status.

Not always. A term loan suits a one-off cost repaid over a set period. RBS publishes other facilities for needs a loan fits less well, each with its own terms on rbs.co.uk:

• Business overdraft. £500 to £50,000, unsecured and subject to approval, with an arrangement fee of £50 to £750 depending on the amount and a representative 13.37% EAR for overdrafts of £500 to £5,000. Interest is charged only on what you use. See our guide to business overdrafts.
• Invoice finance. Provided by RBS Invoice Finance Limited, advancing up to 90% of outstanding invoices, subject to status. RBS lists turnover of £300k for invoice discounting and £6.5m for asset-based lending.
• Asset finance. Provided by Lombard: hire purchase, contract hire, finance lease and operating lease, with monthly payments and an optional larger final payment.
• Social and Community Capital. Loans of £30,000 to £500,000 for social enterprises and community businesses that cannot access appropriate mainstream loans.

Matching the facility to the need matters more than the brand. Equipment usually suits asset finance, and slow-paying customers usually suit invoice finance.

Royal Bank of Scotland is one of NatWest Group’s brands, alongside NatWest, Ulster Bank, Coutts, Lombard, RBS International and others. Lombard, the group’s asset finance brand, provides the asset finance RBS lists on its own site.

The two banks publish matching Small Business Loans. NatWest’s page also offers £1,000 to £100,000 at a fixed rate over one to seven years, with the same representative example, the same eligibility list and the same note that a personal, director or member’s guarantee may be required. Because both brands sit in one group, applying to each is unlikely to give you two independent views of your business. Our guide to the NatWest small business loan covers that product in detail.

Scottish businesses can borrow from any UK lender, and several lenders in the Capzy lender directory are based in Scotland or publish products that overlap with RBS’s range:

• LendingCrowd, based in Edinburgh, publishes business loans of £75,000 to £500,000 over 6 to 60 months with a fixed monthly repayment.
• TSB, also headquartered in Edinburgh, lends to existing TSB business account holders, including a fixed rate loan of £1,000 to £25,000.
• Santander UK publishes an unsecured business loan of £1,000 to £50,000 over one to seven years.

If a bank turns you down for lack of security, the Growth Guarantee Scheme gives accredited lenders a government-backed guarantee, though the borrower remains fully liable. For smaller unsecured borrowing from online lenders, see our page on unsecured business loans.

Capzy is a credit broker, not a lender, and is paid by the lender. You can check your options with a soft search that does not affect your credit score; a lender’s full application may use a hard search.