As previously touched on, pricing can very much vary between products, lenders and due to risk. Whilst this is a deep science, that is extremely complex, we have aimed to give you a guide, or rule of thumb if you will, regarding the types of pricing in each category;
Generally, risk is broken down into the following
- Cat A+
- – Best of the Best, clean business and personal credit files, profitable. Trading 5+ years.
- Cat A
- – Clean personal and business credit, healthy profits, trading history 2+ years
- Cat B
- – Minor scuffs on credit file in the past, but good recent performance.
- Cat C
- – Recent credit problems such as CCJs (settled) or any missed payments
- Cat D
- – Bad personal credit but an overall good business. CCJ’s (unsettled) or defaulted payments.
Unsecured business loan rates
(These are example rates)
These are usually broken down into the 5 categories – A+, A, B, C, D
| Cat | 6 months | 1 Year | 2 Years | 3 Years | 4 Years | 5 Years |
|---|---|---|---|---|---|---|
| A+ | 1.8% | 2% | 3.5% | 5.5% | 6.0% | 7.% |
| A | 1.8% | 2.9% | 4.5% | 6.5% | 8.5% | 10.5% |
| B | 4.0% | 5.0% | 7.0% | 10.0% | 13.5% | 14.0% |
| C | 7.0% | 10.5% | 12.0% | 16.0% | 18.0% | 20.0% |
| D | 9.0% | 11.0% | 12.5% | 16.5% | 18.0% | 21.5% |
Secured business loan rates
(These are example rates)
This is broken down into a similar risk category, but without the difference in terms.
| Cat | 0-24 months | 24-60 months | 60-120 months |
|---|---|---|---|
| A+ | 2% | 2% | 2% |
| A | 5% | 9% | 9% |
| B | 24% | 24% | 15% |
Working capital loan rates
(These are example rates)
Working capital; Bank Loan for Business work slightly different to term loans, in as much as they are charged monthly. Credit and risk still have a huge part to play in price. Below is a rough guide;
| Cat | 0-12 months | 12-24 months | 24-36 months |
|---|---|---|---|
| A+ | 2.50% | 1.10% | 0.80% |
| A | 3.50% | 2.50% | 1.10% |
| B | 5.50% | 3.00% | 1.90% |
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