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

Who is suitable?

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.

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?