What rates and fees should building services companies expect to pay on UK business loans?
Written by: UK Business Loans Content Team | Last updated: 30 Oct 2025
Quick summary — what to expect
Building services companies (HVAC, electricians, plumbers, mechanical & engineering contractors) should expect widely different costs depending on product, security and credit profile. Typical indicative ranges:
- Term business loans: ~6%–25% APR (lower on secured/long-term deals; higher for unsecured or higher-risk profiles)
- Asset finance (hire purchase / finance lease): ~3%–15% APR (asset-secured)
- Invoice finance: facility fees or discounting typically 0.5%–2.5% per month of invoice value (effective cost varies)
- Bridging/short-term: 0.4%–1.5% per month (≈5%–18% p.a.), plus arrangement fees
- Merchant cash advance / alternative finance: can equate to APRs of 30%+ in some cases
All figures are indicative only and depend on lender underwriting, term, amount and security offered.
Why building services (HVAC, electricians, plumbers) have specific pricing
Lenders price building services firms on sector-specific risks: contract-based revenue, seasonal cycles, material cost volatility and heavy reliance on subcontractors or a few large contracts. High asset needs (vans, plant, tools) can be a strength if used as security, but fluctuating margins push lenders to add margin for risk.
Underwriting typically focuses on: recent management accounts, contract pipeline, director credit profiles, trading history (years in business), and the level of security you can provide. The clearer your contract visibility and cashflow forecasts, the better the pricing you can often obtain.
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Typical rates & fees by finance type
Product choice has the biggest impact on the cost of finance. Below are common products for trades and building services, with typical ranges and common fees.
Term business loans (secured & unsecured)
What it is: Lump-sum loans repaid monthly over a fixed term.
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- Indicative APR: 6%–25% (established businesses with security often near the low end; unsecured or higher-risk at the top).
- Arrangement fee: 0%–6% of loan (often 1%–3%).
- Security: may require a fixed charge over business assets or personal guarantees.
Asset finance (hire purchase, finance lease)
What it is: Finance secured against vehicles, plant or tools — repayments structured to match asset life.
- Indicative APR: 3%–15% depending on asset type, term and credit.
- Other fees: documentation fees (£0–£250), valuation or delivery fees for specialist plant.
- Benefit: lower risk for lenders means typically lower rates vs unsecured lending.
Invoice finance (factoring / discounting)
What it is: Unlock cash from unpaid invoices; useful when you supply to contractors who pay on terms.
- Fees: discount/handling typically 0.5%–2.5% per month of invoice value (or a percentage of advanced funds).
- Setup/admin fees: small one-off set-up and monthly administration charges common.
- Note: effective cost depends on advance rate and number of transactions.
Overdrafts & business credit cards
What it is: Flexible short-term facilities for day-to-day needs.
- Indicative: overdraft interest often Bank Rate + 1–3% (variable), plus arrangement/renewal fees on some facilities.
- Best for flexible short-term liquidity, not long-term investment.
Bridging & short-term cashflow loans
What it is: Short-term, often secured loans to bridge cashflow or property transactions.
- Indicative: 0.4%–1.5% per month (≈4.8%–18% p.a.).
- Fees: arrangement 1%–3%, plus legal and exit fees.
Alternative finance / merchant cash advance
What it is: Fast, flexible funding repaid via a percentage of card receipts or daily/weekly debits.
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- Indicative: high effective APRs — often 30%+ depending on fee structure.
- Warning: suitable for urgent needs or where credit is poor, but compare total cost carefully.
What determines the rate you’ll be offered
Rates and fees reflect the perceived risk and the cost of administering the facility. Key factors include:
- Director personal credit — personal credit histories are often reviewed.
- Trading history — years in business and recent turnover.
- Profitability & margins — lenders look at gross margin and net profit trends.
- Contract pipeline — confirmed contracts reduce uncertainty.
- Security offered — property charges, asset security or guarantees lower rates.
- Loan amount & term — larger secured deals frequently attract better pricing.
- Sector risk — concentration in a single client or project can raise pricing.
Metrics lenders use: LTV (loan-to-value) for secured deals and DSCR (debt service cover ratio) for cashflow lending — prepare meaningful forecasts to improve these ratios and pricing.
How to reduce the rate and overall cost
Practical steps to lower pricing:
- Offer usable security (vans, plant, property) to get asset-backed pricing.
- Improve documentation: up-to-date management accounts, aged creditor/debtor lists, pipeline of contracts and cashflow forecasts.
- Fix credit issues where possible (pay down personal balances, correct errors on reports).
- Negotiate arrangement fees and shop around — small fee reductions save hundreds over time.
- Consider matching product to need — asset finance for vehicles; invoice finance for unpaid invoices.
- Extend term to reduce monthly payments but check total interest paid.
- Use a specialist broker or introducer with building services experience to find better-priced lenders.
Checklist — what to prepare before you apply:
- Recent management accounts (or statutory accounts)
- VAT returns and business bank statements (3–6 months)
- List of assets and valuations
- Copies of key contracts or purchase orders
- Director ID and recent personal credit details
How UK Business Loans helps building services companies
We’re an introducer that matches building services companies with lenders and brokers who best fit their needs — we do not lend. Our process:
- Complete a short enquiry (under 2 minutes).
- We match your brief to lenders and brokers experienced in building services.
- Providers contact you with indicative quotes and next steps.
- Compare offers and choose the solution that suits your business.
We aim to save you time and improve your chances of a competitive quote. Ready to compare? Get Quote Now — Free eligibility check.
For more sector-specific information see our detailed page on building services business loans.
Our Business Finance Matching Process
Step 1
Complete Your Details
It takes just 1 minute on average to complete your business and contact details.
Step 2
We Match Your Business
With the best business finance broker or lender most suitable for your needs.
Step 3
You Get Free Quote + Advice
You receive a free quote along with complimentary expert financial advice.
It’s fast and free to get a quote from one of the UK’s leading finance brokers / lenders who will contact you directly with your quote/s.
Mini case studies — real-world examples (indicative only)
1. HVAC firm — van + tools (£40,000 asset finance)
Problem: Needed reliable transport and specialist tools. Solution: Hire purchase over 48 months. Indicative cost: 6.5% APR, small documentation fee. Result: Conserved cashflow, predictable monthly payments.
2. Electrical contractor — short-term cashflow (£75,000 invoice finance)
Problem: Large progress invoices with 60–90 day payment terms. Solution: Invoice discounting facility with 85% advance. Indicative cost: 1.2% monthly discount rate + admin fees. Result: Funds to mobilise new contracts without dipping into overdraft.
3. Small building services company — working capital for new contract (£50,000 term loan)
Problem: Deposit and materials for a large job. Solution: 24-month term loan secured against equipment and backed by director guarantee. Indicative cost: 10% APR with 2% arrangement fee. Result: Completed contract smoothly with margin preserved.
How to compare finance offers
When comparing, focus on:
- Total APR and the total cost of credit (not just headline rate)
- Arrangement, legal and administration fees
- Security required and any personal guarantees
- Repayment profile and early repayment charges
- Lender speed, experience in building services and communication style
Prefer us to compare for you? Get Quote Now — Free eligibility check.
| Product | Typical APR | Typical fees | Time to fund |
|---|---|---|---|
| Asset finance | 3%–15% | Doc/valuation £0–£250 | 24–72 hrs to 2 weeks |
| Term loan (secured) | 6%–12% | Arrangement 1%–3% | 1–4 weeks |
| Invoice finance | Effective varies | 0.5%–2.5% per month | 24–72 hrs |
| Bridging | ≈0.4%–1.5%/month | Arrangement 1%–3% | Days to 2 weeks |
Frequently asked questions
Will applying affect my credit score?
Submitting an initial enquiry through UK Business Loans does not affect your credit score. Lenders or brokers may perform hard credit checks later in the application process.
What does ‘representative APR’ mean?
Representative APR is an industry standard to compare the cost of credit and should include interest plus stated fees. Always check the total cost over the loan term.
Can new building services businesses get finance?
Yes. Options include asset finance (secured against equipment), specialist lenders for younger businesses, and invoice finance if you have invoices to factor. Pricing will reflect the trading history and security provided.
How quickly can I get funding?
Times vary by product: invoice and asset finance can be fast (24–72 hours to a few weeks); term loans and bridging can take from a few days to several weeks depending on security and due diligence.
Do you charge to submit an enquiry?
No — UK Business Loans’ matching service is free for businesses. We introduce you to lenders/brokers who may charge fees if you proceed with a product.
Are the rates you show guaranteed?
No — all rates and fee ranges are indicative. Final pricing depends on lender underwriting and your business circumstances.
Ready for a personalised quote?
If you run a building services business and need funding from about £10,000 upwards, our quick enquiry helps match you to lenders and brokers who understand your sector. It’s free and takes less than 2 minutes.
Get Quote Now — Free eligibility check
Important: UK Business Loans is an introducer — not a lender and not a provider of regulated financial advice. All rates and fees shown are indicative and subject to lender underwriting. Use this guide to prepare and then request a personalised quote to compare exact terms.
1. What rates and fees can building services companies expect on UK business loans?
Typical indicative ranges are term loans 6%–25% APR, asset finance 3%–15% APR, invoice finance 0.5%–2.5% per month, bridging 0.4%–1.5% per month and alternative finance often 30%+ APR, with final pricing depending on lender underwriting, security and credit profile.
2. How do asset finance rates for vans, plant and tools compare to unsecured business loans?
Asset finance is usually cheaper (roughly 3%–15% APR) than unsecured term loans (often 6%–25% APR) because the asset acts as security and reduces lender risk.
3. Can new or start‑up building services businesses get business loans in the UK?
Yes — start‑ups and young trades businesses can access asset finance, specialist lenders and invoice finance, though pricing and options reflect trading history and any security provided.
4. Will submitting an enquiry via UK Business Loans affect my credit score or is it an application?
No — completing our short enquiry is not a loan application and won’t affect your credit score; lenders or brokers may run hard checks only later if you choose to proceed.
5. How quickly can I get funding for building services finance like invoice finance, asset finance or bridging?
Times vary by product: invoice and some asset finance can fund in 24–72 hours to a few weeks, while term loans and bridging can take from a few days to several weeks depending on security and due diligence.
6. What hidden fees should building services firms watch for when comparing UK business loan offers?
Look out for arrangement or broker fees, valuation and legal costs, early repayment charges, unused facility or renewal fees and higher default penalty rates, and always request a full APR and repayment schedule.
7. How can I reduce the interest rate and overall cost of a business loan for my trades company?
You can lower costs by offering usable security (vans, plant, property), improving management accounts and cashflow forecasts, repairing personal credit, negotiating fees and using a specialist broker to shop lenders.
8. What documents will lenders typically ask for when applying for building services business finance?
Lenders commonly request recent management or statutory accounts, VAT returns, 3–6 months of business bank statements, an asset list and valuations, copies of contracts/purchase orders and director ID/credit details.
9. Are the APRs and fees shown on the UK Business Loans page guaranteed for my business?
No — the figures on the page are indicative only; your final APR and fees are determined by lender underwriting, loan term, amount, security and your business circumstances.
10. How does UK Business Loans match building services companies with the right lenders and brokers?
We’re a free introducer that uses a quick enquiry to assess your sector, funding needs and profile, then connect you with trusted, FCA‑regulated lenders and brokers who provide tailored quotes.