Small business loans in Wales: finance options for Welsh businesses

Wales is an increasingly vibrant place to start a business. The most recent 2023 Global Entrepreneurship Monitor (GEM) Wales report found that entrepreneurs are founding companies at record rates. The report found that the rate of Total Early-Stage Entrepreneurial Activity (TEA) reached an unprecedented 11.5% in 2023, up from 7.8% in 2022 – and small business loans have a major role to play in helping businesses succeed.

Research from the British Business Bank shows nearly half (49%) of Welsh SMEs currently use some form of finance. However, accessing finance can be a significant hurdle, with 1 in 5 businesses reporting barriers to securing the funding they need.

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Welsh business loans

1.  iwoca business loans

iwoca offers flexible business loans specifically designed to support SMEs. iwoca’s Flexi-Loan provides fast access to funds without the need for collateral or long applications. Here are the key features of iwoca’s business loans:

• Loan amounts: Borrow between £1,000 and £1,000,000, making it suitable for a wide range of business needs, from short-term working capital to larger investments in growth.
• Flexible repayment terms: Choose a repayment period that suits your business, from 1 day to 24 months, 
• Quick access to funds: Approval decisions are often made within hours, and funds can be deposited in your account as soon as the same day.
• No hidden fees: iwoca is committed to transparency with no hidden fees or charges.
• Interest based on usage: Interest is charged only on the outstanding balance, not the total loan amount, which can reduce overall costs.

Iwoca aims to make finance more accessible and straightforward so that Welsh SMEs can get the support they need to thrive, whether it’s managing cash flow, going after growth opportunities, or navigating unexpected expenses.

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2. Development Bank of Wales

The Development Bank of Wales provides a range of business loans tailored to different needs and stages of business growth. They offer flexible financing options that include:

• Micro loans: Ranging from £1,000 to £100,000, these are suitable for small businesses and startups needing smaller sums.
• Larger business loans: From £100,000 up to £10 million, ideal for growing businesses or those making significant investments.
• Property development finance: Loans for residential, mixed-use, and commercial property developments ranging from £150,000 to £6 million, supporting projects that meet sustainability standards.

3.  Start-up loans from Business Wales

For new entrepreneurs, Business Wales offers government-backed Start Up Loans with amounts ranging from £500 to £25,000. 

• These loans have a fixed interest rate of 6.2% APR and come with the added benefit of free mentoring and business support. 
• The loans are repayable over a period of 1 to 5 years and are available to individuals over 18 with a viable business idea.

4. Investment Fund for Wales

The Investment Fund for Wales, managed by the British Business Bank, offers a £130 million commitment to support Welsh businesses. It provides:

• Smaller loans: From £25,000 to £100,000, suitable for early-stage companies or those needing modest funding.
• Debt finance: Loans between £100,000 and £2 million for more established businesses looking to scale.
• Equity finance: Up to £5 million, ideal for businesses seeking investment for significant growth or innovative projects.

5. Welsh government business grants

Various grants are available through Business Wales, tailored to different business needs and regions. Some of the notable grants include:

• Cardiff Growth Fund: Offers grants between £2,500 and £10,000 to support companies aligned with the city’s economic strategies.
• City of Newport Business Grants: Provides matched funding up to £5,000 for city centre businesses and up to £2,500 for those outside the city centre, aimed at supporting capital investments like equipment and software.
• Swansea Pre-Start Grant: Up to £10,000 available for businesses in the pre-start stage in Swansea, covering expenses such as equipment, training, and marketing.
• Bridgend Business Development Grant: Available to small businesses in Bridgend, this grant provides between £5,000 and £25,000, covering up to 50% of your project costs. It is designed to support projects that contribute to a vibrant local community. Eligibility requires businesses to have a turnover above the current VAT threshold, have been trading for over three years, and have a business address in Bridgend County Borough.
• Powys and Ceredigion Transforming Towns Placemaking Grant 2022-25: This grant supports projects aimed at transforming town centres in Powys and Ceredigion as part of a £5.8 million investment. Businesses can apply for funding to develop or refurbish properties and improve the appearance of town centres, fostering local economic development.
• Vale of Glamorgan Council Start-Up Bursary: Provides up to £5,000 for individuals looking to start a new business in the Vale of Glamorgan. Alongside the bursary, applicants receive access to business advice and support. To apply, you'll need to submit a business plan and a three-year cash flow forecast.

Choosing the right small business loan in Wales

There are a wide range of lending options for small businesses in Wales to grow and succeed. From government grants, local financing or digital short term loans, the right financing can help develop communities and promote sustainable economic growth. 

Iwoca has helped over 90,000 SMEs across the UK turn their ambitions into reality. To find out how we can help you grow your business in Wales, check out our small business loan calculator.