Unsecured business loans up to £350k

We help businesses reach their potential with unsecured finance.

Suitable for well-established businesses

Dedicated team of underwriting experts

Decision in one working day

No early repayment fees

What are unsecured business loans?

An unsecured business loan is where instead of lending against an asset, a lender will grant а loan based on the financial health of a business and solid risk analysis that looks into a broad range of financial data.

Unsecured loans are available from a variety of different lenders, including traditional and alternative providers. Due to the nature of the loan, they could be set up much faster than medium or long-term loans. However, this might vary depending on the lender or complexity of the case.

How do unsecured business loans work?

A business must first submit an application to a lender, which will include information on their current business and finances. The lender will then evaluate the application to check the financial stability of the business and the risk of lending. If approved, the business will get access to the funds, nowadays often via a personalised online dashboard. The business will pay back the amount given over a set period, in addition to the lender’s charges and interest.

Why do businesses need an unsecured loan?

Unsecured loans are an important part of the financing mix and are used by businesses to grow or pursue opportunities. With quick application processes and fast turnarounds, many lenders offer attractive solutions. Reasons you might seek an unsecured loan include:

  • Managing cash flow
  • Purchasing inventory or equipment
  • Bridging receivables
  • Remodeling and renovation
  • Hiring staff

How can you use an unsecured business loan?

Many businesses seek unsecured loans to ensure that they can focus on day-to-day business operations instead of spending too much time working on finance. Reasons you might seek an unsecured loan include:

Short-term

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Manage cash flow

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Bridge receivables

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Finance inventory

Long-term

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Purchase equipment

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Renovate your location

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Invest in staff

The Pros and Cons of Unsecured Business Loans

Pros of Unsecured Business Loans

  • No collateral
    This is the largest advantage, as many businesses have already provided collateral for a secured loan. Unsecured loans without collateral therefore often work well as a top-up in a business’ overall finance mix.
  • Straight-forward application process
    Unsecured loans do not need assets to be itemised and evaluated and therefore the application is more straight-forward and can to a larger extent be done online
  • Speed
    As asset valuations are not necessary, the application, as well as the loan approval process, is often considerably faster than the process for an asset-based loan
  • Less up-front cost
    As the process of applying for an unsecured loan is straightforward and simple, there tends to be little to no upfront costs for an application.

Cons of Unsecured Business Loans

  • Higher interest rates
    As the lender is taking over risk from the business, unsecured business loans typically have higher interest rates.
  • Not suitable for starters
    As an unsecured loan is not based on assets, your company credit needs to be strong, and you need to prove that the business is financially stable and profitable. This means well-established businesses with a longer cashflow history are more likely to successfully apply for an unsecured loan than start-up companies with a limited track-record.

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Benefits of Unsecured Business Loans

Use unsecured business loans to make your business flourish without personal collateral

  • Boost your cash flow

    Inject capital into your business to prevent cash flow challenges. An unsecured business loan can be used to ensure financial stability in the case of unexpected costs.
  • Bridge Receivables

    Unsecured business loans can help small businesses ease the financial demand of delayed payments and seasonality shifts.

  • Invest in new equipment or inventory

    You can use an unsecured business loan to supply the working capital you need to restock your inventory and meet customer demand.
  • Refurbish your business

    Many small business use unsecured loans to make vital improvements and reburishments to the premises, helping to drive and maintain customers.

Unsecured Loans FAQ

  • Who uses an unsecured loan?

    Unsecured loans are typically used by businesses that have an existing loan for which personal collateral has already been provided. It can also be favoured by directors who do not want to risk their own personal assets, and by businesses that need funds for short tenor. Read Martin Aerospace’s story, a manufacturer of parts for Boeing and Airbus engines, and how an unsecured loan helped their business..
  • What business loan types are available?

    There are more business loan types available than ever thanks to the many niche lenders that have entered the market in recent years. The main types of business loans are secured and unsecured. In addition to loans, businesses can also explore finance options such as invoice finance, merchant funding, and flexible credit lines.
  • What documents are needed for an unsecured business loan?

    In order to apply for an unsecured loan, you need to provide the following documents to a lender:
    • Personal information of the applicant/director
    • Business information such as company number, name and registered or trading address
    • Bank statements
    • Annual accounts
    • VAT returns
    • Management accounts
    To understand requirements and what lenders are looking for in successful applicants, fill in . the successful applicant checklist.
  • Can I get a business loan without a personal guarantee?

    Yes, some lenders can provide unsecured business loans that do not need personal guarantees. Upon being reviewed by a lender a business may be deemed to be of sufficient strength and a personal guarantee may not be required. Adding a personal guarantee to the loan may increase the amount a business is able to borrow, improve the interest rates or make up for a business requirement that is not quite met.
  • Why do lenders ask for a personal guarantee?

    Personal guarantees give lenders additional assurance that they will recoup some of the capital if a loan defaults. A personal guarantee agreement is where the person, often the business’ director or several directors, taking the loan will be held personally liable if the necessary loan repayments can’t be made. As a guarantor, personal assets could be taken if the business fails or is otherwise unable to repay the loan.

Want to know more?

Speak to our client services team on 0203 308 9188 or have a look at our brochure.

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