What is an Unsecured Business Loan?
Unlike Secured Business Loans, for an Unsecured Business Loan lenders don’t require any assets (e.g., equipment or property) as security for the funds. Unsecured Business Loans are provided by a wide range of traditional lenders, such as banks, and alternative lenders typically for one to five years. Lenders will want to know what you are using the money for e.g. hiring a new employee or entering a new market and how it will benefit your business. Typically, suitable for businesses that are more established and profitable.
Amount
£1,000 - £500,000
Funds can be in your account within a couple of days, subject to turnover levels and affordability.
Period
1 - 5 Years
Unsecure business loans typically have fixed monthly repayments for terms of 1 – 5 years
Cost
7% - 20% APR
Costs vary significantly based on your credit rating, volume of lending, and other factors. Expect annualised costs of around 7%-20% APR
The information above shows the terms typically associated with a unsecured business loan. Your terms will depend on your own situation.
Unsecured Business Loans at a Glance
Two Years Trading
To apply for an Unsecured Business Loan you should be trading for a minimum period of two years. Your revenue exceed £100,000 per year and your business should be profitable.
Good Credit History
Some lenders require businesses and/or their directors to demonstrate a good credit history. It’s likely that they’ll want to have insight in the equity and net assets in the business. For this reason it’s less suitable for businesses with a limited track-record, that are loss-making or have recently restructured.
Affordable Repayments
An unsecured business loan is typically taken over 1-5 years, with agreed fixed monthly repayments.
Personal Guarantees
An agreement that means a director takes on a certain level of personal responsibility for the debt through their own finances/assets - is typically required when applying for an unsecured business loan.
Your Resources
SME Funding Guide - Understand your Options
Want to know more about the options available to you? Click here to see our SME Funding Guide, in association with our partners at KPMG Small Business Accounting. We've compiled all the information you need to research and choose the right funding for your business, including unsecured business loans.
Case Studies
Funding Xchange helps businesses all over the UK, to access the finance they need on the best terms available. Click here to read just some of the stories of the businesses we have helped
Call us on 020 3695 9206
More questions? Just pick up the phone and give us a call. We'd be happy to help you in your research for business funding.
How to Get Unsecured Business Loans
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