Unsecured Business Loans

Don’t have any collateral to secure a bank business loan? Looking for a hassle-free fast online loan for your business? Apply here for unsecured business loans from Cashfloat! We’ve teamed up with the UK’s leading unsecured business loans lenders to give you a simple and easy online business borrowing experience.

  • Apply for £1,000 to £200,000
  • Loan terms up to 12 months
  • Rates starting from 2% a month
  • 1-day decision
  • No penalty for early repayment
  • No setup fees or hidden fees

Apply now!

Am I eligible to apply with Cashfloat for an unsecured business term loan?

First things first, we don’t require any assets or collateral for you to apply for a loan with us! However, if you are a Ltd company, we may ask for a personal guarantee from a company director later on in the process. You can save time before applying by checking that you fit our basic criteria:

The loan applicant must:

The business must:
  • Be over 18 years old
  • Be a company director
  • Live in the UK
  • Have an Equifax score of 350+
  • Be UK based 
  • Be An LTD, LLP or PLC company
  • Have been trading for at least a year
  • Have an annual turnover of at least £50k

Does that sound like you? Apply now and get a final decision within just 1 working day!

Apply now!

Secured Business Loans vs Unsecured

Both secured business loans in the UK and unsecured business loans have their advantages and disadvantages. Ultimately, the type of loan you choose depends on how much you need to borrow and what type of business you run.

For example, if your company owns real estate, you may consider business loans secured against property. On the other hand, if your company does not own any property, heavy equipment or anything valuable that can be used as collateral, your best option could be an unsecured small business loan.

Unsecured Business loans pros: Unsecured Business loans cons:
  • Quick and easy
  • No risk of losing any assets or collateral
  • Fully online process
  • More expensive than secured loans
  • Personal guarantee usually required for LTD companies
Secured Business loans pros: Secured Business loans cons:
  • Cheaper than unsecured business loans
  • You can borrow up to £1 million
  • Bad credit accepted if you can provide collateral to the value of the loan
  • Risk of the lender seizing assets in case of non-payment
  • An in-person meeting is usually required
  • Only offered by a few companies
  • Lots of paperwork involved
  • Longer processing time

When should I borrow an unsecured business loan?

Whatever you choose to use the loan for, always try to borrow over the shortest period possible to keep the loan costs low. Of course, if your business has not been doing well for a while and a loan will just barely keep you afloat, borrowing more may not be a smart choice.

There are times when an unsecured business loan could be just the thing your business needs. For example:

  • Expanding – If you’ve built a successful business model and want to expand but do not have the necessary assets for a cheap secured loan, unsecured business finance can help accelerate your growth with little hassle.
  • Overcoming short-term money problems – If you need to solve a cash flow problem that you know is temporary, unsecured business funding could be the perfect way to bridge the gap quickly and affordably.
  • Refurbishing – If you own an already-successful business, renovating the premises can likely boost your sales. An unsecured business loan could be the perfect way to get that lump sum you need fast without the stack of paperwork and long waiting times of secured loans.
  • Covering a large one-time purchase – Even successful businesses don’t always have the money to pay for a large one-time purchase. As long as business is going well, unsecured business finance can be a sensible solution.

Unsecured Commercial Loan Interest Rates

Lenders use credit checks to determine the interest rate they will offer you. So if the lender thinks that lending to your business is low risk (because your company has good credit), they’re likely to provide you with a lower interest rate. However, if they decide that lending to your business is high risk (because your business has bad credit), they’re more likely to offer you a high interest rate. Sometimes it may be worth taking time to work on improving your business credit before applying for an unsecured commercial loan. Improving your buiness credit score will most likely increase your loan options.

Before borrowing unsecured business loans in the UK, always compare your options to make sure you’re getting the best deal. However, keep in mind that the interest rates that websites publish are ‘representative’, meaning your rate could be higher or lower depending on your circumstances.

The length of the loan will also impact the amount you pay back. With a short term loan, you’ll find that repayments are higher, but you pay less interest overall. On the other hand, if you borrow unsecured business loans long-term, your repayments will be lower, but you’ll pay more interest in total. It’s always important to be realistic about what you can afford to pay each month when deciding how long you need to repay your loan. This will ultimately help you choose the best credit option for your business.

FAQs about Unsecured Business Loans in the UK

What is a personal guarantee on an unsecured business loan?

A personal guarantee is when the lender requires a company director to sign a contract stating that he/she will personally pay back the loan if the business fails to do so. In other words, the director is acting as a guarantor for the business loan.

Can I get an unsecured business loan with no personal guarantee in the UK?

Yes, some UK lenders offer unsecured business loans with no personal guarantee, but they may be more expensive.

Most lenders offering unsecured business loans require a personal guarantee from the company director. The advantage of unsecured business loans with a personal guarantee is they usually have lower interest rates. On the other hand, the director signing the guarantee will likely be credit-checked first to make sure they are a reliable guarantor for the business.

Can I get an unsecured business funding for my startup?

Yes! Government-backed startup loans are available for people looking to start or grow new businesses in the UK. These loans are completely unsecured, which means they don’t require any collateral. You can apply for these directly on the government’s website here.

What kind of assets do I need for a secured business loan?

Unlike unsecured loans, secured loans require you to sign off an asset as security for the lender. An asset can be any valuable commodity that your business owns. For example, hard assets – like property, equipment or vehicles – or soft assets, like stock. So, if your company has access to valuable assets that you can offer to the lender as security, you might prefer to use a secured loan as it will come at a much cheaper interest rate.

However, keep in mind that secured lenders will often ask to carry out a valuation of the asset. Consequently, they will only lend you an amount that is equal to or higher than the value of the asset. Then, once you’ve borrowed the loan, the asset is considered under their legal authority until the company pays the debt off. Of course, if you don’t pay the loan, you risk losing your assets.

How fast can I get a business loan from Cashfloat?

As a business owner, your time is precious– and we won’t waste any of it. Our application takes just 5 minutes to complete and we’ll get back to you within 1 working day. Want to speed up the process? Have the following documents ready:

  • All your business information, including your company registration number
  • Last three months of your business bank statements
  • The most recent set of management accounts.
  • Last VAT return

Simple. Fast. Reliable. That’s what you get when you work with Cashfloat

Apply here!
More About Business Loans