Unsecured Business Loan
An unsecured business loan provides funding without requiring assets as security. It's ideal for businesses needing quick access to capital for growth, cash flow, or expenses with flexible repayment terms over 3 months to 6 years.
WHAT IS REQUIRED
6 months bank statements
Latest financial accounts
Purpose of the loan
Directors details, including residential status
WHY CHOOSE IT?
No Collateral Required – You don’t need to risk your assets to secure the loan.
Quick Access to Funds – Fast approval and disbursement to meet urgent business needs.
Flexible Use – Ideal for covering a wide range of expenses like expansion, cash flow, or equipment.
Predictable Payments – Clear repayment terms make budgeting and cash flow management easier.
What is an Unsecured Business Loan?
An unsecured business loan provides funding from £10k - £2m (typically) over 3 months – 6 years without requiring assets like property or vehicles as collateral. Instead, lenders assess a business's financial health, creditworthiness, and cash flow to determine eligibility. These loans offer quick access to capital and flexibility in how the funds are used.
How does an Unsecured Business Loan work?
- Application: Business and Director information is submitted to the lender, along with loan requirement.
- Approval Process: Lenders assess credit history and financial health. Timeframe varies between lenders and more information may be requested.
- Funding: Once approved, funds are typically released within a number of days.
- Repayment: Businesses repay the loan and interest in fixed daily, weekly or monthly instalments over an agreed period.
Each Unsecured Business Loan lender has its own specifics, so it's important to understand the following:
- How is interest charged? A great question to ask is, "What is the total cost of the finance?"
- Can you make overpayments or settle early? Understand if you can save on interest by paying off the loan sooner.
- Are arrangement fees deducted or added to the loan? Clarify how fees are handled to avoid surprises.
Is an Unsecured Business Loan suitable for my business?
If your business needs funding without tying up assets or requires quick access to capital, an unsecured business loan could be the ideal solution. Because it's not secured against assets, you can access the funds you need quickly and flexibly, whether you're hiring staff, expanding to a new location, or upgrading your premises.
It's also a great option for:
- Launching new products and driving growth.
- Boosting marketing efforts to reach more customers.
- Purchasing stock in bulk to secure supplier discounts.
- Consolidating multiple debts into a single, manageable repayment.
- Seizing unexpected opportunities, such as securing a major contract or acquiring a competitor—so you never have to miss out due to lack of funds.
Whatever your business goals, an unsecured loan gives you the freedom to move forward without the need for security.
What is required for an application?
The documents required to apply for an unsecured business loan will depend on the lender and size of loan in question.
As a minimum, you should expect to provide:
- Proof of business income – 6 months bank statements & latest financial accounts
- Purpose of the loan
- Directors details – Full name, date of birth and 3 years address history
You may also need to prepare:
- A cash flow forecast and business plan
- Personal Statement of Assets, Liabiltiies, Income and Expenditure
FAQs
Can you have multiple unsecured business loans?
You can have multiple unsecured loans, but lenders will consider any existing financial commitments as part of their affordability checks.
I haven't started trading yet, am I eligible?
Startups can struggle to secure unsecured loans unless they have personal assets, experience and strong personal credit to back the application. There may be alternative options which are more suitable for start ups, including personal start up loans or asset finance.
Do I have to be a home owner?
No, but it does open up options.
Do I need a personal guarantee?
In many cases, yes. However, some lenders offer unsecured loans with a Debenture or limited Personal Guarantee instead. You may also be eligible for Personal Guarantee Insurance – please discuss this with us during your consultation.
What interest rates can I expect?
Interest rates depend on the lender, loan amount, and your business’s financial health. Since lenders calculate interest in different ways, make sure you're comparing rates on a like-for-like basis.
How quickly can I get an unsecured business loan?
There are some lenders in the market who can provide a funding decision in as little as 24 hours. If speed is your biggest priority, then you would need to apply with a lender that has this capability. Some of the quicker funding options in the market often come at a higher cost. Timeframes depend on the lender and application requirements for each business.
Can I apply with bad credit?
Although it is more challenging to obtain finance with adverse credit, it is possible. It all depends on the exact nature of your adverse credit (when, who, how much and why?). Please call us to discuss.
How much can I apply for?
I am a sole trader or partnership, can I apply?
Choice Loans is a broker, not a lender. We will connect you with a lender suitable for your needs or, if appropriate, a specialist broker. We do not charge you an upfront fee but, if your application is successful, a broker commission may be charged.
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