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Unsecured Business Loans

Unsecured loans for UK businesses

Unsecured business loans can be an attractive option for asset-light businesses that need fast access to growth capital. Unsecured loans are a very flexible way to access the funding you need - and our brokers are here to help you navigate the market and find the right deal.

At UK Business Finance, we work with over 50 lenders and access the whole market to bring you the best quotes. Whether it’s an unsecured loan for a small business or an established SME, we guide you through the whole process and even write your loan applications on your behalf. Our services are also obligation and fee-free, so you can find the right deal for your business without paying more than you need to.

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What is an unsecured loan?

An unsecured loan allows you to borrow money for your business without having to provide an asset, such as property or machinery, as security. Instead, a lender will decide whether to approve the loan based on your trading history and the creditworthiness of you (sole trader) or your business (limited company). This makes it a fast and relatively simple way to get your hands on growth capital.

Typically, you can borrow up to £200,000 with an unsecured loan, so you can improve cash flow, purchase stock, invest in machinery or fund an expansion. You repay the loan at a pre-agreed interest rate in monthly or quarterly instalments over a fixed period. Unsecured loan terms are a short to medium-term funding option, with repayment terms typically ranging from three months to seven years. 

If you run a startup or an early-stage business, you may not have enough of a credit record or trading history to get an unsecured loan. In that case, a secured loan or some other type of funding may be more appropriate.  

What are the benefits of unsecured business loans?

The unsecured business loan market is very competitive, which means there are plenty of good deals out there if you know where to look. Other benefits include:

  • You don’t need to put up any assets as security
  • The lack of collateral means there’s minimal paperwork
  • Loans can be approved and the funds can be released quickly
  • The repayment terms are very flexible 
  • There are no restrictions on what you can use the loan for

There are also a few other things to think about. The loan amounts are usually smaller with shorter terms and at higher interest rates than secured loans. You may also be asked to sign a personal guarantee, which could make you liable to repay the loan if the business is unable to.

Am I eligible for an unsecured business loan?

As the lender has no security, they will look at your business’s profile, including your trading history, turnover and credit record, to determine the risks. They may also consider your personal credit rating.  

To be eligible for an unsecured loan, your business will typically need:

  • To have been registered in the UK for at least six months
  • A minimum monthly turnover of around £3,000 a month
  • A good trading and payment history
  • Financial forecasts and business plans
  • A strong customer or client base

Lenders will usually calculate how much you can borrow as a multiple of your business’s monthly turnover. If you want to borrow more, you’ll also need a strong cash flow position and a balance sheet that shows you can comfortably afford the repayments.

Find the right unsecured loan for your business

Every business has different needs, circumstances and goals. At UK Business Finance, we can help you find unsecured loans that meet your requirements at the best rates. There are no fees to pay for our service and we don’t ask you to sign a 30-day exclusivity contract like other brokers. 

Request a quote online or get in touch via phone or email to discuss your funding requirements with our team.

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Our team of finance experts can provide industry-leading advice on mortgages to suit a range of different scenarios. Call the team on 0808 301 0624 or Contact Us