Metro Bank Review

Metro Bank was granted its license in 2010, making it the UK’s first new high street bank in over 150 years. As a young brand, Metro often does things differently – which is evidenced in the way it lends to businesses.

Metro Bank’s reputation tends to be stronger than other high street banks, with higher ratings on customer review websites like TrustPilot. However, this doesn’t necessarily mean the bank is the right choice for your business – that requires an understanding of what types of loans are on offer and how they may or may not suit your business. 

Here at Rangewell, we’ve created a full overview of Metro Bank’s business loan offering to help you make up your mind. If you’re considering taking out finance, talk to our team before contacting a lender so we can help you make the right decision. We’re experts in finance and work on your behalf at no cost to you, so you’ll have a helping hand during a crucial stage of your business’s life. 

If you need finance and have applied to Metro or you’re thinking about it, give us a call first and we’ll make sure you get the best deal.

What is Metro Bank? 

Metro is the UK’s youngest high street bank and as such, adopts many of the more innovative digital practices of alternative providers. For businesses looking to secure finance, Metro offers a business banking service that includes the ability to take out small, flexible loans across short term lengths of up to 5 years.

What types of loans does Metro Bank offer?

Metro Bank only offers loans to business banking customers. The bank offers a few types of finance, with the main product offer focused on a small business loan of up to £25,000. Anything over that falls into more bespoke terms. 

Fixed rate business loans

Metro Bank’s business loans are specifically offered to business customers, offering short-term lending for 1 to 5 years for amounts between £2500 and £25,000 on a fixed rate. This is a relatively limited loan offer compared to many other banks, though higher borrowing can be agreed with more bespoke rates.

This loan comes with no arrangement fees and usually won’t require security.

Tailored rate business loans

Metro Bank also offers more bespoke loans if you contact the team to request amounts greater than £25,000. This tailored rate offer is entirely dependent on your application and the bank’s decision, so there is little information available to help illustrate an example rate or cost of the loan. 

When offering a tailored loan, Metro Bank will usually demand security and will charge an arrangement fee of 1.75% of the loan’s value.

Commercial loans

For businesses which are classed as ‘larger and more complex’, Metro Bank offers a ‘commercial’ account with higher deposit limits and more flexibility around cashflow. Commercial customers are able to apply for higher loans over £25,000 for up to 30 years – though again the rates and terms will need to be negotiated privately with the bank.

Business banking credit offers

Like any other highstreet bank, Metro also provides business credit facilities with loan alternatives such as overdrafts and credit cards. Credit cards come at a rate of 14.9% APR and overdrafts are available for up to £60,000 – so if you’re a business customer it may be worth considering these options if they’re more suited to your needs. 

Metro also offers invoice financing and asset financing, which you’ll be able to learn more about on this business borrowing page.

Are you eligible for a loan from Metro Bank?

With all forms of business loan from Metro Bank, eligibility isn’t made clear on the website or any public messaging – instead applicants are encouraged to contact the business banking team to enquire about borrowing. Based on other similar high street banks, we imagine that to be able to apply for a loan, Metro Bank expects you to be:

• 18 or older
• An existing business banking customer
• Be a sole trader or director of a LTD business
• Be able to demonstrate an annual turnover of £2m (though some exceptions will apply)

What information do you need to provide? 

Metro Bank doesn’t make it clear on the website with regards to which documents or information it expects during a loan application. However, there are some general things every lender expects to review that we can list here to help you plan an application. 

Firstly, the bank will review your business plan and expect it to justify why you’ll need the finance and what you may use it for. You should ensure your business plan is up to date as a result as it may be the difference between approval and rejection. 

Additionally, banks expect to see evidence of financial performance via cashflow forecasting and your latest set of accounts. Make sure you have these to hand whenever you apply for finance – it’s also a good idea to gather your historical accounts too. 

Does Metro Ban offer secured or unsecured lending?

The standard business loan from Metro Bank, provided you borrow less than £25,000, may be able to be offered on an unsecured basis. However, the bank does state that it may require some security – though it does not state explicitly what will be required. If you’re looking to borrow more than this, expect to have to offer security as a definite.

What are the rates and terms? 

The business loan offers from Metro Bank come in two main formats, with each offering a different interest rate. For loans of up to £25,000, the interest rate is typically fixed to 9.6% APR for between 1-5 years. For loans of more than this, interest rates will be offered on a bespoke basis but will still be for between 1-5 years. If you want longer terms, you’ll either need to be a commercial customer or choose a different provider. 
 

Want better rates or different terms? 

Metro Bank’s loan offer is fairly limited – not only is it only for business banking customers, but it is also only to a maximum of £25,000 unless you want to move into the tailored loan product which can be spread out for up to 30 years. To spread out a loan across longer terms, you’ll need a new lender. Choose Rangewell for our expertise and we’ll find you a lender offering the best rates and terms to suit your needs. 

What are the fees and charges?

Metro Bank’s relatively limited business loan comes with a few advantages – one of which is the lack of arrangement fees incurred on the loan provided you’re borrowing less than the £25,000 limit. You may have to pay early repayment fees on this loan. If borrowing more than £25,000 via the tailored loan offer, you’ll also face a 1.75% arrangement charge. 

How to apply for a Metro Bank business loan

Unfortunately, applying for a Metro Bank business loan is not as simple as with other lenders as the process is gated behind becoming a business banking customer. You’ll need to register with the bank as explained on its website, then contact your business banking team to apply for the loan. 

What if you’ve been rejected by Metro Bank?

If you’ve been rejected by Metro Bank, or you can’t apply for a loan because you don’t have a business account with the bank, there are lots of alternatives available. Whether you opt for another high street bank or an alternative finance provider from the rapidly-growing digital lending platforms, there are many different ways to still raise the finance you need. 

Speak to Rangewell today if you’ve been rejected and we can help you find a business loan that suits your requirements, whether you’ve got a bad credit history or just don’t want to be forced to open a business banking account for your loan. 

Want to refinance your Metro Bank loan? 

When a loan is approaching the end of its term length, you can usually consider refinancing. Rather than simply approaching Metro Bank and agreeing to another loan with the same provider, you can instead explore alternatives across the wider market. Refinancing allows you to raise more credit or extend repayment terms across longer timeframes – giving you more flexibility over your finance and your business’s financial future. Speak to our team if you’re interested. 

Need more funding than Metro Bank can offer? 

Due to the low £25,000 limit for the fixed-rate loan offer from Metro Bank, you may be considering a different provider. Speak to Rangewell if you need to loan larger amounts and we can help you select the right lender – whether that is indeed Metro Bank and its tailored loan offer, or an alternative provider more suitable for your goals.

Remember, all of our advice is free and we are not affiliated with any particular lender, meaning you’ll enjoy fair, impartial guidance to help you get the right loan.