What does it cost to borrow £40,000?

2 min read

Security shapes rateThe pricing fork at £40k

≈ £1,503/monthIllustrative: 9.5% × 30 months

≈ £5,095Illustrative interest over the term

Three structuresUnsecured / guarantee / charge

Secured, guaranteed or neither

Up to around this size many lenders will still lend to a solid company without taking security, but the pricing fork becomes visible: the same £40,000 tends to cost more unsecured than with a personal guarantee behind it, and more with a guarantee than with a charge over assets. Whether a guarantee actually buys you a lower rate — and whether that discount is worth the personal exposure — is a genuine decision at £40,000, not a formality. Weigh the rate saving against what you're putting on the line.

Illustrative numbers for £40,000

For orientation only: £40,000 on a reducing balance at 9.5% over 30 months runs to about £1,503 a month — roughly £45,095 repaid in total, so about £5,095 of interest. A sharper rate earned through security or stronger accounts feeds straight through: every half-point off the rate on this schedule is worth several hundred pounds. As ever, your quote reflects your own accounts, sector and structure, so treat these figures as a worked pattern rather than a price list.

Where the savings are at this size

Three levers matter most at £40,000: the security decision above, the term (shorter always costs less in total on a reducing balance), and application strength — current filings, clean conduct on existing facilities and a clear use of funds all pull the offered rate down. The broader playbook is covered in cutting the cost of borrowing. Put your own rate and term into the true cost calculator, and request a £40,000 quote from Credicorp to see where you actually land.

Frequently asked questions

Can I borrow £40,000 without a personal guarantee?

Sometimes — it depends on the lender and the strength of the company. Purely unsecured lending at this size exists but is priced for the lender's extra risk. See whether a limited company can borrow without a guarantee, and if you do sign one, understand its scope: amount, whether it covers costs and interest, and what releases it.

What would £40,000 cost per month?

In the illustration — 9.5% a year, reducing balance, 30 months — about £1,503 a month. Stretching the term drops the monthly figure and raises the total; shortening it does the reverse. Your affordability in a weak trading month, not the best-case month, should decide which end of that trade you take.