Unsecured Business Loans

If you want to access a loan that does not require any security, and that you can access quickly, then you will want to consider an unsecured business loan. It is often thought to be the fastest and most flexible way to raise funds.

An unsecured loan is a good option if you do not own your home, or if your business has limited assets. The structure is straightforward. You borrow money from a lender, and then agree to pay it back, with interest, each month, until the loan is repaid. Because the loan is not secured against an asset, this type of finance does tend to have higher interest rates.  

The higher your credit score, the more reliable you look, and the better rates of interest you will be offered.

An unsecured business loan can be used by a wider variety of businesses. Sole traders all the way up to large corporations use this product. For any business that is looking for fast and security-free business loans, for growth or general working capital, an unsecured loan may be the best product fit.

 

Efficient

You can receive a large sum of money flexibly and fast. Most unsecured loans do not have early repayment fees which are ideal if you are working to clear your business debt.

BENEFITS

Simple

The application process is usually simpler and speedier than a conventional business loan, and in turn is a great way to boost your cash flow or make one off purchases.

BENEFITS

What Is An Unsecured Business Loans?

In order to borrow money for your company, you can take out an unsecured business loan. Unlike a secured loan, an unsecured loan is not backed by an asset such as a vehicle or property. It is common for unsecured loans to be appraised on the basis of the borrower’s creditworthiness and business cash flow.

If you are applying for an unsecured business loan, the financial health of your company and your credit score will have a greater impact on whether you are approved.

Short-term unsecured business loans are the norm. In some cases, unsecured business loans might be issued for as long as five years.

Who is suitable?

An unsecured company loan may be just what you’re searching for if you don’t want to put up any collateral.

Firms who don’t have a lot of assets, businesses that don’t want to provide security, or any organization that needs money urgently can benefit from unsecured loans.

Unsecured loans are a popular method of finance, they are, however, most suited to businesses that do not own many assets or who would rather not put up security against their loan. 

They are well suited to the rising numbers of businesses that have intangible assets. Because the loan is unsecured, your business does not need to have a decent credit score to prove that you are likely to make your repayments back on time and in full. The better your credit score, the more you are likely to be able to borrow, and the better rates of interest you will be offered.

To access an unsecured loan your business must fall into the right criteria. A minimum 2-year trading history, your business owner must be a UK resident, and there are no major defaults on other creditors. Assuming you fill these credentials it will then be down to the lender’s individuals criteria.

Benefits of an Unsecured Business Loan

An unsecured business loan is a wonderful option for businesses who don’t want to put their personal or business assets up as collateral, as it provides immediate access to cash.

 

  • In terms of the application procedure, it’s quick and easy to complete.
  • There is no need for a safety net.
  • The money is available to you as soon as possible.
  • It helps to create a relationship with your bank.
  • They’re more accessible.
  • Your personal and company assets are protected.
  • It raises your company’s creditworthiness.
  • The collateral is not a constraint on the loan amount.

How Much Does It Cost?

An unsecured business loan might have a headline interest rate between 3% and 10% and an APR of between 3% and 12%. 

The rate offered can depend on a number of different factors: 

  • Your credit history
  • The amount borrowed – a loan might be for any amount from a few thousand pounds to, say, £10 million, although higher amounts are unlikely to be offered to small or start-up businesses on an unsecured basis
  • How long you have been trading – some unsecured loans are repaid in a matter of months, while others are set up with terms as long as 25 years
  • Your turnover and/or profit figures

Qualifing questions

Can I Borrow?