Starling Bank business loans: overview and digital alternatives

Starling Bank offers digital-first business loans tailored for small and medium-sized enterprises (SMEs) in the UK. Their loans are designed to provide funding for businesses to expand, invest, or manage cash flow. 

Since Starling Bank is a bank, they will require you to not only open a bank account with them, but to make it your primary account. This makes a Starling Bank business loan more complicated than other small business loans.

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Key features of Starling Bank business loans

Starling Bank provides unsecured business loans to limited companies and limited liability partnerships, offering a streamlined and entirely digital application process.

• Loan Amounts: £25,001 to £250,000.
• Repayment Terms: between 12 and 72 months.
• Interest Rates: fixed rates are applied, but the specific rate is determined by the business’s creditworthiness and other factors during the application process.
• Fees: a one-time arrangement fee of 4% of the loan amount, payable at drawdown. No fees for early repayment.
• Security: requires a personal guarantee from business owners or directors, making them personally liable if the business fails to repay the loan.
• Eligibility: available to UK-based businesses that have been trading for at least 24 months. Businesses must also open a Starling Business Current Account as part of the loan conditions​.

Starling Bank business loan application process

To apply for a Starling Bank business loan, businesses must open a Starling Business Current Account and make it their primary account. The application process includes:

1. Completing an online application form.
2. Providing business details, including accounts and bank statements if not already banking with Starling.
3. Undergoing a credit and fraud check, which assesses both the business and its directors.

What you’ll need to provide for your application

To apply for a Starling Bank business loan, you’ll need to submit the following:

• Personal and Business Details: the application must be completed by a director or partner of the business who is authorised to act on its behalf. The loan is specifically for limited companies or limited liability partnerships.
• Company Registration Number: this should be registered with Companies House, confirming your business’s legal status.
• Purpose of the Loan: clearly state why you need the loan, such as for purchasing equipment, expanding the business, or managing working capital.
• Latest Financial Accounts: include the most recent Profit and Loss statement and balance sheet for your business.
• Bank Statements: if your primary business banking is not with Starling, you will need to provide the last six months of statements from your current bank.

What you need to know about the application

• Credit Checks: Starling conducts credit checks on both the company and its directors. This includes a thorough review of credit history, fraud checks, and an assessment of the business’s ability to afford the loan repayments.
• Repayment Responsibility: your company is responsible for repaying the loan in full, including all interest and the arrangement fee.

Eligibility criteria

• Starling Account Requirement: if you are not already a Starling business customer, you will need to open a Starling Business Current Account and make it your primary banking provider.
• UK-Based: the business must be registered and trading in the UK, with active Persons of Significant Control (PSCs) who are also UK-based.
• Trading History: the business must have been actively trading for at least 24 months.
• Credit Assessment: a full credit assessment will be performed to confirm the business can afford the loan repayments. This includes checks for missed payments, defaults, County Court Judgements, or insolvencies related to the business or its directors.
• Up-to-Date Filings: your business must have current accounts and confirmation statements filed with Companies House, and must not be listed as dormant.

Pros and cons of Starling Bank business loans

Pros:

• Quick and easy online application with a decision typically within a few days.
• Fixed interest rates provide predictable monthly repayments.
• No fees for early repayment, offering flexibility if the loan can be settled early.

Cons:

• Interest rates may be higher than some other lenders, especially if you don’t have a strong credit history
• The minimum loan of £25,000 may be more than some businesses require
• Loan amounts are capped at £250,000, which might not meet the needs of larger funding requirements.
• Must open a Starling business account and make it your primary banking provider, which could be inconvenient for some businesses​.

Alternatives to Starling Bank business loans

For businesses that don’t want to change their primary bank account, there are a range of alternative, digital-first finance options that can have the capital you need in your account just as fast – if not faster - than a Starling Bank business loan. 

iwoca is a leading UK provider of short term business loans for small businesses that can work with any bank account registered to your company – borrow from £1000-£1,000,000 for up to 60 months on your terms.

• Apply in minutes – just provide a few details about your business and find out how much you could borrow (try our business loans calculator).
• Get approved within 24 hours – once approved you can start drawing down funds straight away.
• Repay your way – there are no long-term commitments and you can repay early with no fees.

We’ve helped over 90,000 companies grow and succeed. Find out how to apply for an iwoca loan and see what you could achieve.

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