Starling Bank has emerged as one of the key players in the competitive world of business finance. It offers digital-only banking products that are tailored towards small and medium-sized enterprises (SMEs) in the UK.
But if your business is currently searching for the ideal loan provider, is Starling Bank the right option for you? That’s what we’ll answer in this post, as we delve into the features, pros and cons of Starling Bank’s business loans. Read on to get started.
Key features of Starling Bank business loans
Starling Bank offers a range of business loans designed to meet the diverse needs of SMEs. Let’s take a look at some of the key features you should know before applying:
Loan amount and terms
Starling Bank provides business loans ranging from £25,001 to £250,000, catering to businesses of varying sizes and funding needs. The loan terms are flexible, extending up to six years and come with fixed monthly payments and no fees for early repayment.
Interest rates and fees
Interest rates are fixed for the duration of the loan, so your monthly repayments won’t change. The amount of interest added to your repayments will depend on your business’s circumstances and credit rating. The better your credit rating, the lower the interest rate you’ll be offered. Be aware that there is a one-off arrangement fee, currently 4% of the loan amount, payable on the date you receive your funds.
Application process
The application process is streamlined and entirely digital, reflecting Starling Bank’s ethos for convenience as a challenger bank. Business owners can apply through the Starling Bank app or website and receive a decision within a few days. Many positive reviews have mentioned Starling Bank’s easy application process.
Eligibility criteria
To qualify for a Starling Bank business loan, your business must be based and trade in the UK – and must have been trading for at least 24 months. In addition, you must be willing to open a Starling business account and make it your primary banking provider. You will also need to pass Starling’s viability test to ensure your business can repay the loan in full.
The pros of Starling Bank business loans
Digital convenience
The entirely digital application and management process makes it easy for you to apply for a loan, meaning you can avoid lengthy paperwork or in-person visits.
Transparency
With no hidden fees and a clear breakdown of costs, Starling Bank offers greater transparency than some other loan providers.
Excellent customer support
Starling Bank is known for its excellent customer support, offering 24/7 service through live chat on the app as well as email and telephone support. It is also quick to respond to social media queries on Facebook and X (formerly Twitter).
Flexibility
The flexibility in loan amounts and terms means you can tailor your borrowing to the specific needs of your business, and minimise the risk of over or under-borrowing. In addition, there are no early repayment fees.
Cons of Starling Bank business loans
Restrictive loan amounts
Starling Bank’s business loans start at £25,001 and go up to £250,000. While that might be suitable for some SMEs, you may wish to borrow less or more than those limits. If that’s the case, you’re better off looking elsewhere.
Requirement for a Starling Bank account
If you are successful in your application, you are required to open a Starling business bank account and make it your primary business banking service. For some businesses, it makes it impractical or impossible to apply.
Stringent creditworthiness criteria
The eligibility criteria, while ensuring responsible lending, may exclude some newer or smaller businesses that have not yet built a robust credit profile. Additionally, sole traders are not eligible to apply.
What is the best alternative to Starling Bank business loans?
While Starling Bank offers attractive business loans, it won’t be the perfect option for some UK businesses. If you’re not convinced, Funding Triangle is a strong alternative that provides unsecured business loans ranging from £10,000 to £500,000 and more flexible terms.
After completing a simple application form, you can receive a same-day decision. Funding Triangle has a network of 120 lenders that have approved loans to property developers, eCommerce brands, construction companies and more.
