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Unsecured Business Finance

Borrow capital without any collateral/guarantee.

Simple, fast and low-cost loans for SMEs looking to finance their businesses without putting their assets at risk. Opt for greater flexibility and small fixed monthly repayment options under Unsecured Business Finance.

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What is Unsecured Business Finance?

Unsecured loans allow small and medium-sized businesses to borrow capital up to £250,000 from lenders in the absence of any formality to offer security such as home or any assets to them. They are a great finance tool for those with few or no assets, for those who are reluctant to put their assets on line and lastly, for those businesses that just need fast cash flow to grow quickly.

Put it simply, unsecured loans are among the most sought after financial options as they free the borrower from risking their assets. Secured loans on the other hand, necessarily require assets as collateral to grant funds. The former loan option proves to be the more accessible option for businesses.

Unsecured business loans empower ambitious businesses to reach their goals and values without having to compromise on security. They allow businesses to effectively manage their cash flow, invest at the right places, refurbish/renovate premises, buy newer equipment and machineries and handle any case of uncertainty such as COVID-19 pandemic.

If you are a business who rightly requires some cash flow to boost their operations or any other legitimate business purposes and want to acquire a loan by opting out of the collateral/security criteria, Unsecured Business Finance just might be the perfect financial solution for you.

Who can apply for unsecured loans?

Following are the key requirements to avail unsecured loans in the UK:

  • UK trading business with a UK-based bank account.
  • Turnover of at least £10,000
  • LLPs (limited companies, limited liability partnerships) or registered sole UK-based traders.
  • More than 4 months of active operations on paper.

Businesses of any size, large or small, can apply for and get unsecured loan benefits if they adhere to above standards and certain terms and conditions of lenders.

Checks on following key factors may also be made for transparency and secure loan reimbursement.

  • Annual Turnover 
  • Historical Profit/ Loss Rates
  • Bank statements
  • Trading history
  • Credit Score

What are the advantages and disadvantages of unsecured business finance?

  • Faster capital transfer than other finance options.
  • No asset/collateral risk.
  • Pre-planned interest and repayment tenure.
  • Only a small upfront cost to avail loan.
  • More risk for the lenders, hence personal guarantee requirements.
  • Higher interest rates than secured loans.
  • Bad impression on credit score in case of repeated default repayments.
  • Small loan amount with shooter repayment period than in case of secured loans. 

Frequently Asked Questions

Unsecured loans usually have higher interest rates since they are made available without any security.

In case of default repayments under unsecured loans, lenders can still take legal action against the intentional defaulters. 

Lenders sometimes demand a personal guarantee if the applicant is seeking an unsecured loan amount. Personal loans lower the risk from the lender's perspective and help them make the decision quicker to sanction the loan.

Some lenders do not ask for any asset/collateral or personal guarantee, however this usually rakes up the interest rates. 

Yes, subject to eligibility and application, you may be able to take advantage of this aspect of unsecured loans.

Glance over at some of our other finance tools that may benefit you more.

  • Business Cash Advance
  • Property FInance
  • Recovery Loan Scheme
  • Revolving Credit Facility