Unsecured business loans – Fast and flexible borrowing

Unsecured business loans offer small and growing businesses greater flexibility when accessing finance quickly. Unlike traditional bank loans, unsecured business loans do not require an asset, such as property or collateral, to be offered as security for the loan.

This can be particularly beneficial for businesses that are expanding rapidly and do not have the time or resources to arrange security for a loan. Unsecured business loans are also typically easier to obtain than bank loans, as they are not subject to the same stringent lending criteria.

However, it is important to note that unsecured business loans usually come with a higher interest rate than secured loans. As such, businesses should carefully consider whether an unsecured loan is the right option for their needs before taking out a loan. We have developed a better approach to finance for small businesses, as a market leader for unsecured business loans in the UK without the need for security. 

Becoming increasingly popular funding option with business owners, unsecured business loans have competitive rates, flexible terms and funds can be within the businesses bank account within 48 hours.

What is an Unsecured Business Loan?

An unsecured business loan work by advancing an amount of cash into a business from a lender which is totally unsecured against that business. These work mainly if the company does not hold many business assets but needs to find quick working capital, this example of finance will be of welcome relief.

This sort of loan might help with the businesses growth buy new equipment, build a website, grow your business or simply carry the business during the coronavirus pandemic.

We have a number of different types of unsecured business loan options to help businesses of all sizes, from startups businesses to limited companies. The following are all unsecured business finance options:

• Startup business loans – Starting a new business venture, great this one is for you.
• Sole trader loans – offer flexibility to self trader workers, there are various lenders who can help sole traders.
• Self employed loans – a variety of lenders can provide loans for the self-employed.
• Limited company loans – If your business is registered with companies house, your limited company can apply for finance it needs to grow.
• SME business loans – If you operate as a small or medium-sized business we can assist with your business finance requirements.

How do unsecured business loans work?

Unsecured business loans work by the lender providing your business with upfront capital without requiring security. The repayment of this loan is typically repaid in monthly or quarterly instalments over a fixed period. There is a wide selection of unsecured funding products that offer flexible terms. They are typically based on the borrower’s creditworthiness.

Because they are not backed by collateral, unsecured business loans tend to have higher interest rates than other types of loans. They are also more difficult to obtain. To qualify for an unsecured loan, borrowers typically need to have a good credit history and a strong financial profile. If you’re thinking about taking out an unsecured loan, be sure to shop around and compare offers from multiple lenders.

How are unsecured business loans paid back?

An unsecured business loan has a clear and straightforward repayment structure: you borrow money from a lender, agree to make fixed monthly payments at a pre-agreed interest rate, and make payments over the loan term until the borrowed amount has been paid back in full. With unsecured loans, interest rates can be higher than with secured loans, but there is no collateral required, which can make unsecured loans a good option for businesses that don’t have significant assets.

Unsecured loans can be used for a variety of purposes, including business expansion, equipment purchases, and working capital. When considering an unsecured loan, it’s important to compare offers from different lenders to find the best terms and rates.

What is the difference between secured and unsecured business loans?

As mentioned above, unsecured business loans aren’t backed by any assets. Because of this, they pose a greater risk for the lender, and higher interest rates are usually charged. In contrast, secured business loans are financial products that require businesses to offer up collateral as part of the borrowing agreement. This collateral can take the form of property, equipment, or even accounts receivable.

The presence of collateral gives the lender a degree of protection in the event that the borrower is unable to repay the loan. As a result, secured business loans typically have lower interest rates than their unsecured counterparts.

What are the advantages of unsecured business loans?

There are many advantages to opting for unsecured business loans, it’s an easier, more risk-free way of clients getting the funding they need for their business to succeed.

In theory, this type of funding is a less risky borrowing option because there’s no danger of losing any assets if you can no longer repay the loan. They can also offer more flexibility than secured loans, repayment terms of anything from one month to three years. A prefect credit history is not always required.

As it’s not secured against property or other collateral, business banks be happy to top up a loan once a company has made a certain number of successful repayments, and will also offer repayment holidays as an additional benefit.

The advantages we offer our clients:

• No assets needed – Assets are not required as extra security when applying for a business loan.  This meaning they are a highly accessible source of funding for new business owners in particular.
• Use for multiple purposes – You can use the funds gained from your loan however you like. It doesn’t matter if you want to invest in new stock, hire extra members of staff, or even move the location of your business. You have no spending limitations in this sense with an unsecured loan.
• Get approval and funds faster – When compared to other kinds of funding – fast business loans that a free from the requirement of personal security. It’s the quickest way of the funds being in your business bank account, allowing you to make that much-needed next business step.
• More flexibility in repayments – Our team of alternative business funders can offer you a flexible finance solution that works well for you, tailored for the purpose of your individual needs. Loan repayments can be discussed and paid over a short or medium term, allowing you a higher level of freedom when making payments.

Unsecured business loans offer great advantages for businesses

If you are a relatively new ventures or a well-established businesses and can enjoy a number of significant benefits.

No assets required

An unsecured business loan is a type of business loan that does not require the borrower to put up any assets as collateral. This makes them a highly accessible source of funding for business owners, as they can be approved for the loan more quickly than other types of loans. However, because no collateral is required, the interest rates on unsecured business loans are often higher than on secured loans.

Use for any purpose

Business loans are a flexible way to finance your business. You can use the loan for any business purpose, including investments in new equipment, expansions of your product range, funding training opportunities for your staff or breaking into new markets in the UK or overseas. There are no limits on how you use the loan, so you can tailor it to meet your specific needs. With a business loan, you can invest in your business with confidence, knowing that you have the funds to support your growth plans.

Faster approval and funding

An unsecured business loan is a loan that does not require any asset or collateral as security. This type of loan is often faster to get approved for and funded than a secured loan, making it a good option for business owners who need access to capital quickly. Depending on your creditworthiness and the amount of money you need, you could qualify for an unsecured loan of up to £500,000. While unsecured loans typically have higher interest rates than secured loans, they can still be a very helpful tool for businesses in need of short-term financing.

Flexible repayment terms

Flexible repayment terms are one of the key benefits of working with an alternative business funding provider. You’ll know exactly how much you need to repay each month, with no hidden fees or interest rates. Loans can be repaid over a short or medium term, typically between 1 month and 5 years. This makes it easy to budget for your repayments and gives you the peace of mind that your loan will be repaid in full. With fixed repayment schedules and transparent pricing, alternative business funding providers offer a highly flexible finance solution for businesses of all sizes.

Does my business qualify for an unsecured business loan?

To qualify for an unsecured business loan, you’re in the right place and can apply online. Most cases will be accepted because there are so few requirements as well as guidelines for our customers to stick to. Find them listed below.

Our requirements for your business:

• Your business needs to have been operating for at least 4 months
• Be a limited company, limited liability partnership, or sole traders registered in the UK
• Minimum of 6 months trading through PDQ machine
• Minimum turnover of £5,000 per month through card terminals
• Have a UK bank account
• Have your last three bank statements
• Limited company, limited liability partnership (LLP) or sole traders registered in the UK
• Terms and conditions apply

A personal guarantee is an agreement between you and the lender that says you’re personally responsible for repaying the loan if your business can’t. It’s one way lenders can reduce their risk when lending to small businesses. The personal guarantee could enable you to secure higher levels of funding, but it’s important to understand the risks before agreeing to one.

If your business is unable to repay the loan, the personal guarantor may be required to pay back the remaining balance under the agreed terms. This could put strain on your personal finances and relationships, so it’s important to consider all your options before agreeing to a personal guarantee.

Will I need to provide a form of security or personal guarantee?

A personal guarantee is a legal agreement made by the business owner or director who becomes personally liable for paying any debt should the business be in the unfortunate position of not being able to repay the loan. The owner or director becomes the ‘guarantor’. It can be made with or without supported security such as a legal charge on the guarantor’s personal property.

A PG can differ between lenders. Some will insist on a PG with supporting security while others may not – it’s good to discuss the terms of any arrangement if they are required to secure the business finance. A personal guarantee is a way for lenders to reduce their risk when lending to small businesses. It gives them some assurance that they will get their money back, even if the business itself is unable to repay the loan.

If you are considering taking out a loan for your business, it is important to be aware of the implications of a personal guarantee. Remember that, as the guarantor, you will be personally responsible for repaying the debt if the business is unable to do so. This could have serious financial consequences for you and your family, so make sure you understand all the risks before signing any agreement.

Limited companies and LLP’s – If your business is a limited company or LLP, many lenders will expect you to provide a Personal Guarantee (PG). Any stakeholders and directors with a minimum of 20% – 25% stake in the limited business may be expected to provide a PG. The purpose of a PG is to protect the lender in the event that the borrower is unable to repay their loan. If you are asked to provide a PG, it is important to understand the risks involved before making a decision.

Sole traders and partnerships –  The downside is that the business owners are personally liable for all debts and losses incurred by the business. This means that their personal assets, such as their home or savings, could be at risk if the business fails. Another disadvantage of sole traders and partnerships is that they can find it difficult to raise finance from external sources, as the funding will be based on the personal credit history of the business owner.

What are the documents required for an unsecured business loan?

The documents that are required for an unsecured business loan if dependent on a lender by lender basis.  These are the most common types of documentation you should be ready to present:

• Proof of identity and address
• Business verification documents
• Supporting documents ( e.g. business bank statements)
• Personal guarantee (if required for your unsecured loan agreement)

Can I compare unsecured business loan rates?

When it comes to unsecured business loans, it’s important to compare rates from multiple lenders in order to get the best deal. While unsecured business loans tend to have higher interest rates than secured loans, they also offer a number of advantages, difference between secured and unsecured business finance such as faster funding and less paperwork. When comparing unsecured business loan rates, be sure to compare the total cost of the loan, including fees and interest charges.

That’s why we’ve streamlined the process of comparing business loan products, lenders and rates. We work hard to do the legwork for you and find the best loan product for your limited company. We’ve also created a handy calculator to help you work out how much you could expect to repay. Please take a look at our business loan calculator for more information.

By taking the time to compare loans and rates, we can help you save money in the long run and get the best possible deal for your business. Also, be sure to compare the repayment terms and conditions in order to find the loan that best meets your needs.

Read more: Unsecured Business Loan Costs

Unsecured business loan calculator

Our unsecured business loan calculator can help you do just that. Simply enter the amount of the loan, the interest rate, and the repayment period, and the calculator will show you the total repayable amount. You can also use it to compare different repayment options before applying for quotes from lenders. So whether you’re looking for a business loan or trying to figure out the best way to repay one you already have, our unsecured business loan calculator can be a helpful tool.

Can I get an unsecured business loan with bad or poor credit?

A bad credit score can make it harder to qualify for a loan, but it’s still possible to get financing from some lenders. That said, you may end up paying more in interest and fees if you’re approved for a loan with bad credit. If you’re in the market for a business loan, keep in mind that most lenders will perform a credit check as part of their underwriting process. This is used to assess your creditworthiness and determine whether you’re a good candidate for a loan. While there’s no guarantee that you’ll be approved for financing, working with a reputable lender can give you the best chance of getting the money you need to grow your business.

Poor and a bad credit history has an effect on the way lenders look at businesses and individuals looking to borrow money via an unsecured business loan. This is stumbling block usually starts after an application has been made to their high street banks, which leaves a foot print on the credit file and the credit file is impacted again. Accessing alternative business finance can be the lifeline for many business owners as lenders look at the ability to make repayments not history.

A poor credit history is a fact of business life this is due to the amount of credit searches that has been carried out against directors names. Your customers may have failed to pay you on time and your business not being able to pay suppliers, which then a creditor may have called upon a personal guarantee.

Credit history in some cases can be reasonably straightforward to remedy and increase your overall credit score. We always recommend you submit an application you give it a quick check, this way it gives you a better chance of eligibility without leaving a footprint.

Can I get an unsecured business loan for my startup business?

Unsecured business loans can be extremely helpful for startups that may not have the collateral to secure a more traditional loan. unsecured business loans have higher interest rates, but they can be a lifesaver for a startup business that needs working capital to get off the ground. We work with numerous lenders who offer unsecured business loans to startups, so if you’re in need of funding, don’t hesitate to reach out to us.

A startup business loan is a loan given to a business that is in its early stages of development. Startups are often considered to be inherently volatile, and as such, unsecured startup business loans carry greater risk for the lender. However, if your UK startup needs an unsecured business loan, and you are willing to pay slightly higher interest rates, then we can help you arrange unsecured funding.

We understand that startups need access to capital in order to grow and scale, and we are committed to helping our clients secure the financing they need. If you are interested in learning more about our unsecured business loans for startups, please contact us today.

We’ll be more than happy to help you find the unsecured business loan that’s right for your startup. Thanks for considering unsecured business loans as a option for your startup funding!

How long does it take for an unsecured business loan to be approved?

If you’re looking for a business loan, you might be wondering whether to apply for a secured or unsecured loan. Both have their pros and cons, but if you’re looking for a fast and easy loan, an unsecured business loan is probably your best bet. Unsecured loans are usually easier to arrange than secured loans, and full approval can be expected within just a few days. In most cases, you can receive funding on the same day as submitting your loan application.

This is because with an unsecured loan, there’s no need for an independent valuation of the asset you’re putting forward as security. So if you need a quick and easy loan, an unsecured business loan is probably your best option.

Are unsecured business loan lenders regulated by the FCA?

Working with unsecured business loan lenders regulated by the FCA to ensure best practices are observed and your company receives the best possible service. Lenders who are part of trade associations, such as the NACFB, also fall under the FCA’s regulatory scope.

This provides additional peace of mind that your unsecured business loan is in good hands. As always, we partner with lenders who have your company’s best interests at heart.

Are unsecured business loans safe?

All loan products come with potential risks, but when you apply for an unsecured business loan through a verified loan, you will receive a loan agreement that is safe for your business to take on. We only work with lenders who are regulated by the Financial Conduct Authority (FCA), so you can be sure that they’re operating ethically and within the law. It’s also in the lender’s best interest to ensure your business will be able to make repayments when it takes on the loan, so there’s really no need to worry about the safety of unsecured business finance

Of course, as with any financial product, there are always risks involved. But if you carefully consider the terms of your loan agreement and make sure you’re working with a reputable lender, an unsecured business loan can be a great way to finance your business goals.

Apply for a unsecured business loan

We will first ask you some basic details to verify your business with our “Get a Quick Quote” needed to apply for an unsecured business loan.

• The amount you want to borrow
• Average monthly card sales
• Annual turnover
• Trading name of your business
• Company number if registered in England and Wales
• Number of years trading

We will also need the following information.

• Title, first name and surname
• Email and phone number

Once completed just click our terms and conditions. Your application will be processed and reviewed by one of our account managers, you are welcome to call us to track the progress.

Once the application has been reviewed by a direct lender, one of our dedicated account managers will be in touch to discuss the terms of your loan agreement within 24 hours with a decision on the same day.

At this point you are welcome to ask the lender any questions or have concerns about the loan, these questions could including repayment plans, to make sure there are no nasty surprises along the way and are comfortable with repayments for the loan amount.

After you have carefully read through all the terms of the agreement, you will need to sign all of the relevant documentation and return it to the lender. You will then be able to access the money from your account once the lender has received your completed agreement

FAQ’s

What is an Unsecured Business Loan?

Unsecured Business Loans are a type of borrowing that banks or alternative lenders offer to businesses in the UK without the need for the directors to offer security or a debenture on their businesses.

Is there a requirement for a PG for a Unsecured Business Loans

Yes most lenders with as for a PG ( Personal Guarantee ). This means if the business fails to make the repayments to the loan company, you will personal have to pay the outstanding amount off.

Can I get an Unsecured Loan for a Start Up?

No most lenders will require the business to have a trading history. Most start up loans require the founder to give security.

Can I get a Unsecured Business Loan with Bad Credit

Most lenders do not sit comfortable with bad credit regardless if it is personal or if the company has suffered from adverse. A funder will more than likely as for security until the default or CCJ has been removed.

Conclusion

Unsecured business loans can offer several benefits to a company that is looking for funding. Firstly, unlike secured loans, there is no requirement for collateral, which means that businesses do not have to put their assets at risk to secure the funding they need. Additionally, the application process for an unsecured business loan can be faster and more streamlined, making it easier for businesses to access the funds they need quickly.

Furthermore, unsecured business loans can help businesses build credit, as timely repayment can improve their credit score and lead to better borrowing options in the future. If your business is in need of funding but you don’t have collateral to offer, an unsecured business loan could be the solution you’re looking for. Contact a us today to learn more and see if you qualify.