The UK business lending market has two main types of provider: established high street banks and newer fintech (financial technology) lenders. Understanding the differences helps you choose the right route for your company's needs.
Speed and process
Banks typically require a formal application, relationship manager meetings, and a credit committee review. The process can take weeks to months for larger amounts, and even small facilities often involve extensive documentation and eligibility criteria rooted in historical relationships.
Fintech lenders use automated decisioning, Open Banking data, and real-time company analysis to make decisions in hours or days. They do not require a pre-existing banking relationship and are open to companies that have never borrowed before.
Eligibility criteria
Banks typically require a track record of two or more years, minimum annual turnover thresholds, and often personal guarantees or security over business assets. Fintech lenders typically focus on current trading performance and recent cashflow rather than long history, making them more accessible to younger or growing businesses.
What they look at
Banks often rely on filed accounts (which can be 12 to 18 months old by the time a decision is made), bank reference letters, and human relationship assessments. Fintech lenders access current bank transaction data via Open Banking, enabling decisions based on what your business is doing now, not what it looked like at last year's year-end.
Products available
Banks offer a broader product range: mortgages, equipment finance, trade finance, letters of credit, and so on. Fintech business lenders tend to specialise — in term loans, revolving facilities, or bill-spreading products — and do these things exceptionally well rather than trying to offer everything.
Regulation and protections
Both banks and fintech lenders operate under regulatory frameworks, but the frameworks differ. Banks are regulated by the FCA and PRA for most products. Fintech business lenders like Credicorp operate in the exempt business lending market — lending to limited companies is outside the consumer-credit regime, which means FOS and FSCS protections do not apply in the same way. However, responsible lending standards, contract law, and ICO data regulation still apply in full. See what protections apply without the FCA regime for more detail.
Cost
Fintech lender pricing is typically higher than bank pricing for comparable amounts — this reflects the higher risk tolerance, faster processing, and lack of asset security. However, when you factor in the opportunity cost of a slow bank process (or the cost of not getting funded at all), the difference in cost often narrows significantly.
See also: Regulated vs unregulated business loans, What is the exempt business lending market?, Lender vs broker: what is the difference?.