What counts as a good business loan rate right

2 min read

Relative, not absoluteDepends on your risk

Base-rate anchoredMoves with the market

Compare quotesBest judge of 'good'

Total repayableThe real yardstick

There is no fixed 'good' number

Because rates are risk-priced and anchored to the base rate, a 'good' business loan rate is a moving, relative thing — not a fixed figure you can memorise. A rate that is excellent for a first-year company would be poor for an established, secured borrower. The useful question is not 'what is a good rate' in the abstract but 'is this a good rate for a business like mine, right now'. See the fuller answer on judging a rate.

How to judge your quote

The reliable test is comparison. Get firm quotes from two or three lenders for the same amount and term, then compare them on total repayable with all fees included. If your quote is at or below the others for your profile, it is a good rate. If it is well above, either your accounts need strengthening or that lender is not keen — either way you have learned something useful.

Improving on it

If the quotes come back higher than you would like, the levers are in your hands: fuller filed accounts, a stronger debt-service coverage ratio, a longer trading record, or offering security. Each pulls the margin down. A competing written quote is also a genuine negotiating tool. See how to get a better rate.

Compare firm quotes on the true cost calculator, and to add a Credicorp quote to your comparison, apply.

Frequently asked questions

Is there an average business loan rate I can compare against?

Averages exist but are of limited use, because they blend very different borrowers, products and security levels into one figure. Your rate is set on your specifics, so an average tells you little about whether your quote is fair. Comparing several firm quotes for your own business on total repayable is a far more reliable yardstick than any published average.

Do rates change often?

The base-rate component can change whenever the Bank of England meets, and lenders adjust their margins over time with market conditions and appetite. So a rate that was competitive six months ago may not be today. This is why judging a rate against current, live quotes for your business matters more than against an older benchmark or a remembered figure.