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Unsecured business loans
An unsecured business loan is a method of raising funds without using any personal or business assets as collateral.
What is an Unsecured Business Loan?
A These loans are available to many company structures (Limited companies, Sole Traders, Partnerships, LLPs and so on) provided the borrower has a visible financial history and good credit rating. It stands to reason that these loans are quite “risky” for the unsecured loan lender, given there is no security taken, which can be reflected in the rate of interest charged.
As the loan is unsecured the lenders money will be at risk and likely to be unrecoverable, should the borrower fail to repay. The lender would therefore perform the necessary due diligence to make themselves comfortable.
Unsecured Loan Lenders include High Street Banks, Specialist Finance Houses and Peer 2 Peer lending platforms.
The unsecured business loan lender will need to see company financials including accounts and cash-flows showing the payments can be afforded during the period of the loan. Unsecured Business Loans are usually on a “Capital and Interest” basis, and over a shorter period than a secured mortgage might be.
What are Unsecured Business Loans used for?
They can be used for any business purpose, and to help your business grow and improve cash flow. A quick & easy application process means these loans are often easier to access, than a more conventional loan.
Business loans can be used for stock purchase, asset purchase, cash-flow, debt consolidation, property purchase and almost any other business purpose. The application process is extremely simple, and funds are typically available within 2 weeks of application.
Other examples of what a secured business loan could be used for are:
Improve Cash Flow – helps the business cope with seasonality
Help Grow your business – do you need more stock? Bigger premises?
Refurbish Premises – Give your business a new look and boost sales
Cover one-off scots – Do you have a Tax Bill to pay?
More staff – Employee people to cope with demand
New Equipment – busy assets with an unsecured business loan
What are the Key Features of Unsecured business loans?
Interest rates from 1.9% per annum.
Unsecured Loans are from £25k to £500k (note that PG’s may be required)
Note that loans from £501k to £2m are available, with security (2nd charges are acceptable)
Loan terms from 6 months to 5 years.
No upfront application fees or Early Repayment Charges.
What are the Unsecured Business Loanslending criteria?
Sole Traders, Partnerships, Limited Companies and Limited Liability Partnerships can apply.
Minimum business turnover of £100k per annum
2 years filed accounts must be available.
All directors must be UK based, with clean credit
No CCJ’s above £250 allowed.
Directors’ guarantees may be requested.
What Information do you need to progress an Unsecured business loans loan?
Company Name and type (LTD, LLP, Sole Trader, Partnership)
Directors Names, Addresses (Last 3 Years) and Date of Birth
Last 2 Years Accounts
Company website address
Explanation for the Use of Funds
Criteria overview
- Cheapest rates guaranteed
- Up to 36 months
- Loans from £100K to 100 Million
- Any location
- Options with no exit fees
- Residential commercial mixed use
Other SME and Business Product Types
Frequently Asked Questions
- What is an unsecured business loan?
- Who can get an unsecured business loan?
- Can I borrow in a limited company?
- What rates should I expect to pay?
- How long can I have an unsecured business loan?
- How Fast is an unsecured business loan application?
- Can I repay early? Are there any repayment penalties?
- What is the next Stage to apply for a business loan?
- Where will the loan money be paid to?
- Does the money need to be for business purposes?
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