Quick answer
Most UK unsecured SME loans size at one to two times monthly revenue, capped by affordability cover. For a business turning over a million pounds, that often means £80k-£200k unsecured. Asset finance is sized to the asset (often 70-90% of value). Invoice finance scales with the debtor book (advance rate 70-90%). Secured loans can reach much higher, sized by asset value rather than revenue. All figures are indicative and subject to lender underwriting.
How unsecured lenders size a loan
Most UK unsecured SME lenders use revenue as the first sizing input. A common rule of thumb is one month's revenue as a baseline facility size, with stronger affordability and trading history stretching to two months. A business invoicing £100k a month might therefore see £100k-£200k indicated.
Affordability sits on top of that. Lenders typically want monthly repayments to be no more than 25-50% of free cashflow, sometimes with a debt-service-cover ratio test (EBITDA divided by debt service, target usually 1.25-1.5x or higher). A revenue-based indication that fails the affordability test will be cut back regardless of headline turnover.
Product-specific sizing
Asset finance is sized to the asset. Lenders typically advance 70-90% of asset value, sometimes with a deposit and sometimes with a balloon at the end of the term. The total facility can run from a few thousand for a small van to several million for an industrial machine line.
Invoice finance scales with the eligible debtor book. The lender sets an advance rate (commonly 80%, sometimes higher for clean debtor lists) and applies concentration limits per debtor. A growing business with £500k of debtors outstanding might draw around £400k against the book at any one time.
Merchant cash advances size against card-receipts history. A typical advance is one month of average card turnover, sometimes stretching to two months for strong files. Revenue-based finance for digital businesses works similarly off platform sales rather than card sales.
Secured and larger facilities
Secured business loans and commercial mortgages are sized to asset value, not just revenue. Commercial mortgage loan-to-values commonly run 60-75% of the property's open-market valuation, with stress-tested rental cover for investment properties or trading-cover ratios for owner-occupied premises.
At the upper end of SME and lower-mid-market, bespoke debt facilities sized to EBITDA - typically a multiple of one to three times - become available. These deals look quite different from vanilla SME unsecured lending and require more documentation and longer underwriting.
Practical ranges by revenue tier
Below £250k annual turnover: unsecured loans typically range £5k-£50k, MCAs £5k-£40k, asset finance scaled to asset. Approval is usually possible but at the smaller end of the market.
£250k-£1m turnover: unsecured loans £25k-£250k, MCAs £20k-£200k, invoice finance scaled to debtor book. This is the core SME band and most lenders compete here.
£1m-£10m turnover: unsecured stretches £100k-£500k for strong files, secured options open up, invoice and asset finance facilities can run into the millions.
Above £10m: bespoke deals from specialist lenders and banks, structured against EBITDA or asset value rather than off-the-shelf product templates.
Key points
- Unsecured loans usually size at one to two months of revenue, capped by affordability.
- Asset finance sizes to 70-90% of asset value.
- Invoice finance advances 70-90% of eligible debtor book.
- Secured and commercial mortgages size to asset value, often 60-75% LTV.
- All numbers are indicative; lenders typically apply their own affordability tests.
Finance types that may be relevant
The product categories below are commonly considered for this situation. Suitability is subject to lender underwriting and your trading profile.
Unsecured Business Loan
Term loan or credit line repaid through fixed instalments.
Asset Finance
Finance to buy/refinance equipment, vehicles or machinery.
Invoice Finance
Funding advanced against unpaid B2B invoices.
Related guides
Frequently asked questions
- Can I borrow more than my annual turnover?
- On unsecured terms, almost never. On secured terms backed by property or strong assets, yes - the facility is sized to the asset, not the trading revenue.
- Does profit matter more than turnover?
- For affordability, yes. Lenders typically want to see that the loan is serviceable out of free cashflow, which is closer to profit than to turnover.
- How much does my credit score change the size?
- Credit affects rate more than size. A stronger file unlocks better pricing; the absolute size is mostly driven by revenue, assets and affordability.
- What is debt-service cover?
- EBITDA divided by total annual debt service (principal + interest). Most lenders look for 1.25x or higher, some require 1.5x or more for larger deals.
Compliance note
Eligibility guidance only - not financial advice, not a loan offer, not a guarantee of approval.