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ZAExpert financial copywriter
Page written by Chris Godfrey. Last reviewed on July 8, 2025. Next review due April 6, 2026.
Not so long ago, getting a business loan meant making a trek to your high street bank and applying for traditional finance. The process was often slow, clunky and offered few solutions. The arrival of non-bank business loans has changed all that. Now you can get the money your business needs with just the click of a mouse.Â
Non-bank business loans: Choose from hundreds of lenders and dozens of loan products. In many cases, funds can be in your bank account in days or even hours.
Non-bank business loans are financing options provided by lenders that are not traditional banks or building societies. These lenders, often called ‘non-bank lenders’, ‘alternative lenders’, or ‘non-bank financial institutions’ do not offer standard bank services such as deposit, chequing or savings accounts. Instead, they specialise in providing loans and lines of credit to businesses, especially small and medium-sized enterprises (SMEs), using a variety of models and criteria.
Non-bank business loans are provided by alternative lenders, and they can be a good option for businesses seeking a streamlined funding process. This is how they work:
It doesn’t matter how big or mature your company is, what it does, or where you’re based, non-bank business loans can benefit your business.
Non-bank business loans offer flexible funding and typically come with faster approvals and less stringent requirements than traditional banks. This can make this type of lending an ideal fit for startups, small businesses and organisations with weak credit history. Non-bank business loans can also support diverse financing needs and may be tailored to the borrower’s cash flow pattern – valuable features for businesses with seasonal or erratic income.
Many UK businesses have weak or limited credit history, factors that may prevent them from obtaining standard bank financing. In comparison, non-bank business loans often come with more flexible criteria, where lenders assess alternative factors such as cash flow or business performance instead of relying heavily on credit scores. Ultimately, non-bank business loan approval is typically faster and more achievable, with less paperwork and fewer credit-based restrictions than traditional forms of financing.
Non-bank business lenders offer streamlined application processes with minimal paperwork and flexible loan criteria, making them a good option for companies needing speedy funding. From application to approval to loan disbursement can often take place within a few days, sometimes in 24 hours or less. This speed can be crucial when addressing urgent needs such as inventory restocking, equipment repair, or covering emergency expenses.
Like all forms of business financing, non-bank business loans have their advantages and disadvantages:
Pros
Cons
Non-bank business loans differ from traditional bank loans in several ways:
Non-bank lenders typically offer faster approval, more flexible terms, and have less stringent credit requirements. They often assess loan eligibility using alternative data such as cash flow or sales, making them more accessible to newer or credit-challenged businesses. In contrast, traditional banks usually have stricter criteria, require more documentation, and take longer to process applications. However, standard bank loans may offer lower interest rates and longer repayment terms.Â
In brief: Non-bank loans can be ideal for businesses needing quick, flexible funding, while traditional banks may suit those with strong credit and longer time in business.
There are many types of non-bank business loans. Popular options include:
Peer-to-peer (P2P) lending is a method of borrowing money directly from individual investors through an online platform, bypassing traditional lenders such as banks. Businesses apply for loans, and lenders may choose to fund them, often in small amounts across multiple loans. Although this lending method can be time-consuming for borrowers, it may offer access to funds when businesses are unable to obtain other types of business loan. Security may be required.
Online business loans are financing solutions offered via digital platforms and designed to give businesses fast and convenient access to capital. These types of loans can be used for almost any business need – purchasing inventory and equipment, meeting payroll, covering gaps in cash flow, etc. Benefits to borrowers include faster application and approval processes, minimal paperwork, flexible loan options, and quicker funding—often within 24 to 72 hours. Online loans can be ideal for businesses needing timely financial support without the lengthy procedures of traditional loans. Security may be required.
Available for businesses that accept customer payments by credit and debit card. A merchant cash advance allows you to borrow against the value of your card sales. As your card sales increase, your borrowing limit goes up. Pay the loan back with a fixed percentage of your card sales on a daily, weekly or monthly basis. Your sales act as security for the loan. No added collateral required.
Invoice financing (also known as invoice discounting) allows businesses to borrow against the value of their outstanding invoices. Instead of waiting 30, 60, 90 days or more, release the cash tied up in your unpaid invoices as soon as you issue them – sometimes in 24 hours or less. You retain control of your sales ledger and are still responsible for collecting payment from your customers. This means clients need never know you’re using your invoices to raise funds. No added security required.
Asset-based lending is a type of business loan that’s secured by a company’s assets, such as inventory, property, or plant and equipment. Lenders use these assets as collateral, which reduces risk and may allow businesses to access funds even when they have weak credit. Asset-based lending is typically used for working capital or cash flow support. No added security is required.
Obtaining a non-bank business loan is similar to applying for other types of business finance. Lenders will review your credit score (typically both personal and business) and ask for key business information.Â
Depending on the type of funding you are seeking, you may need to provide:
Generally, the longer you’ve been in business and the better your credit score is, the more you’ll be able to borrow and the less interest you’ll pay.Â
You can search for non-bank business loans by approaching online lenders, commercial loan providers and specialist finance companies one by one. However, be aware that this process can be slow and complicated and could take weeks or even months to complete. Alternatively, you could use the services of a loan marketplace. This type of online platform works with a large pool of funding sources and can immediately introduce you to a choice of loans from a range of lenders. They may also be able to give you advice and help you with the application process. This can be especially useful for businesses who have never applied for non-bank finance before.
If the options above are not for you, there may be other ways to get the financing your business needs.
Business grants are provided by local and national government and some foundations and charities. This is effectively free money, as grants do not need to be repaid like a loan. However, business owners should be aware that there is often stiff competition for grants, the application process can be slow and difficult, and the pool of available money is usually limited, which may restrict the amount of cash you could receive.
Available via various online platforms, crowdfunding can provide the cash you need if your presentation hits the right spot. Although it may be tough to raise large sums in small donations from hundreds of donors, the cash is essentially free as there is no interest to pay, and you don’t need to repay the money if you spend it where you said you would. An eye-catching idea and a powerful pitch are essential to succeed with this funding option. Security is not required.
Venture capital is funding provided by investors in exchange for shares in the company. Venture capital is typically used by startups and fast-growing businesses to get a business off the ground or drive rapid expansion. Unlike traditional financing, venture capital relies on the future potential of the business to support the funding instead of relying on hard assets such as property and equipment or personal guarantees. This can make venture capital a good option when avenues to more traditional sources of funds are closed. However, while this type of financing can provide substantial funding and strategic support, it also means giving up some ownership and control to investors who typically expect high returns and want a say in key decisions.
Working with business finance experts can make all the difference when applying for a loan. Contact Swoop to discuss your borrowing needs, get help with your application and to compare high-quality non-bank business loans from a choice of lenders. Get your startup going or give your business the financial boost it needs on terms to suit you, not your bank. Register with Swoop today.
Written by
Chris is a freelance copywriter and content creator. He has been active in the marketing, advertising, and publishing industries for more than twenty-five years. Writing for Barclays Bank, Metro Bank, Wells Fargo, ABN Amro, Quidco, Legal and General, Inshur Zego, AIG, Met Life, State Farm, Direct Line, insurers and pension funds, his words have appeared online and in print to inform, entertain and explain the complex world of consumer and business finance and insurance.
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