Unsecured business loans for fast, flexible borrowing

With an unsecured business loan, you can access finance quickly without offering an asset, such as property or collateral, as security for the loan. Unsecured business loans offer greater flexibility for small and growing businesses that want to borrow while keeping their company assets safe.

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What are unsecured business loans?

An unsecured business loan is a type of finance that does not require the borrower to provide security. Because the loan is ‘unsecured’, businesses aren’t at risk of losing valuable business equipment, property or land when they choose this funding route.

Unsecured business loans offer a straightforward funding solution for UK businesses. You could borrow up to £500,000 without having to secure the loan against important company assets.

Did you know: Unlike a secured business loan, which requires you to offer tangible assets as security against the loan, unsecured business loans can be accessed quickly and repaid over a short or medium term.

A business loan without security provides a flexible source of funding for businesses that lack assets or do not want to secure them against a loan. You can access finance quickly – often within a couple of hours – and simply pay it back within an agreed timeframe.

We have various unsecured business loan options to help businesses of all sizes, from startups businesses to limited companies. We offer the following unsecured business finance options:

  • Startup business loans - This is great if you are about to start your new business venture.
  • Sole trader loans - Great if you are set up as a sole trader, we have various lenders who can help sole traders.
  • Self employed loans - We have a variety of lenders who can provide loans for a self-employed person.
  • Limited company loans - If you are registered with companies house, we can help your limited company get the finance it needs to grow.
  • SME business loans - If your small or medium-sized business is trading, we can help you with your business finance requirements.
unsecured business loans deal

How do unsecured business loans work?

Unsecured business loans work by providing your business with upfront capital without requiring security. Typically you repay the loan in monthly or quarterly instalments over a fixed period, known as the loan ‘term’. There is a wide selection of unsecured business loans for UK firms that offer flexible terms.

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How are unsecured business loans paid back?

An unsecured business loan has a straightforward repayment structure. You borrow money from a lender after agreeing to make fixed monthly payments at a pre-agreed interest rate. Payments are made over the loan term, until the borrowed amount has been paid back in full. With unsecured loans, interest rates can be higher.


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 greater risk for the lender, and higher interest rates are usually charged. In contrast, secured loans are financial products that require businesses to offer up collateral as part of the borrowing agreement.


What are the advantages of unsecured business loans?

There are so many benefits to choosing unsecured business finance. If you need a quick injection of cash for your business without offering the security of an asset, an unsecured business loan could offer the fast, flexible and easy funding solution you’ve been looking for. The pros of unsecured business loans include:

  • Borrow £1,000 up to £500,000 +
  • Does not require any asset security
  • Flexible repayment terms from 1 month to 5 years +
  • Minimal paperwork required
  • Funds can be released quickly after approval
  • Short to medium term lending solution
  • Keep your company assets safe

Unsecured business loans offer great advantages for businesses operating in the UK. Both well-established businesses and relatively new ventures can enjoy a number of significant benefits.

No assets required - With an unsecured business loan, funds can be made available faster than other types of business loans. As assets are not required as security, they offer a highly accessible source of funding for business owners.

Use for any purpose - Whether you’re looking to invest in new equipment, expand your product range, fund training opportunities for your staff or break into new markets in the UK or overseas, there are no limits to how you use this type of business loan.

Faster approval and funding - As you do not require an asset or collateral as security for an unsecured business loan, your instant business loan could be agreed within a matter of hours. Depending on your circumstances, you could qualify for an unsecured loan of up to £500,000 or more.

Flexible repayment terms - Our alternative business funding providers can offer you a highly flexible finance arrangement; many offer fixed repayment schedules with no hidden fees and interest rates are agreed upfront. Loans can be repaid over a short or medium term, typically between 1 month to 5 years.

Top tip: Get a business finance health check. By checking and improving your business credit score, your business will open more doors for commercial funding options. Take a look at the ‘My Business Profile’ service from Experian.

Does my business qualify for an unsecured business loan?

To qualify for an unsecured business loan in the UK, you must have been trading for at least 4 months and have a minimum annual turnover of £10,000. There are unsecured loan options for sole traders too.

It is worth noting that although you will not need to secure your loan against a personal or company asset, you may be required to have a good personal and business credit history.

  • Operating for at least 4 months
  • Have a UK bank account
  • Limited company, limited liability partnership (LLP) or sole traders registered in the UK
  • Annual turnover of at least £10,000

A personal guarantee may also be required, but this could enable you to secure higher levels of funding. If your situation changes and your business is unable to repay the loan, the personal guarantor may be required to pay back the remaining balance under the agreed terms.

If you do not meet these criteria, we can still help you access the finance you need. We offer a wide range of other business finance options and can help you find the right funding solution for your business.

woman making unsecured business loan application

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

Possibly. 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.

Limited companies and LLP’s - If your business is a limited liability partnership (LLP), many lenders will expect you to provide a PG. Any stakeholders and directors with a minimum of 20% - 25% stake in the limited business may be expected to provide a PG.

Sole traders and partnerships - Business owners who are classed as sole traders or partnerships with unlimited liability will invariably be personally liable. The funding will be based on the personal credit history of the business owner.

Did you know? You can take out personal guarantee insurance to help minimise the risk of you personal assets should your company be unable to repay the loan.

What are the documents required for an unsecured business loan?

When applying for unsecured business loans in the UK, there are certain documents that you need to provide. These documents vary from lender to lender, but as a general rule of thumb you should be ready to present:

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

Can I compare unsecured business loan rates?

Comparing loans rates is a fundamental part of getting the right deal for your business. But it doesn’t just revolve around the best figures. There are differences between secured and unsecured business loans, with each having advantages and disadvantages to consider.

Sometimes the benefits of a particular type of business loan product can outweigh other products based on repayment values. Take, for example, a traditional business bank loan which can be expensive and involve a relatively slow administration process. You may find that an unsecured business loan from an alternative lender will present you with faster funding speeds, less paperwork and innovative repayment options. This is why it is always important to compare unsecured business loans.

At Capalona, we know how much time it can take to compare loan products, lenders and rates. We work to streamline this process, helping to do the hard work 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. Please take a look at our business loan calculator for more information.

We’ve already helped many businesses with their funding requirements.

"We’ve helped many businesses find the capital they need to grow. From Theme Parks, Restaurants, Factories, E-commerce websites, Cafes, Fitness Centres, Hotels to music studios - you can see how varied it can be. There are very few businesses that are not considered for this type of funding."

Rich Wilcock - Capalona


Unsecured business loan calculator

Our unsecured business loan calculator allows you to calculate the total repayable amount on a business loan that you already have received quotes for or you can use it as a guide to working out repayment options before looking for business finance quotes.

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This calculator is intended for illustration purposes only and exact payment terms should be agreed with a lender before taking out a loan.

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

Sometimes it can be trickier to find a business loan when you have a poor credit history. The lenders on our panel will perform a soft and or hard credit check on your application for fraud and affordability purposes. We often get asked about no credit check business loans. Credit checks form an important part of the lending process and we don’t work with any lenders that will process applications with no credit checks being performed. This is in your best interest as well as the lender’s.

This is usually a major stumbling block for those business owners with a bad credit history who have tried and failed to secure funding with their local high street bank. This is why accessing alternative business funding through our panel of lenders can be the lifeline for many business owners.

Having a poor credit history is a fact of business life. It happens for many reasons. Your customers failing to pay you on time and your business not being able to pay suppliers - it’s almost unavoidable during a company’s lifecycle.

Having a glitch on your credit history can, in some cases, be reasonably straightforward to remedy and increase your overall credit score. It’s worth looking at this before your application, so you have the very best chance of eligibility.

However, don’t let it stop you from applying for an online business loan. We’ve helped many businesses find an unsecured business loan with a bad or poor credit history.


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

Yes, you can get unsecured business loans for Startups. This means that even if you haven't started trading yet or have only been trading up to 24 months there is a way to raise the start-up funds you need to get going without securing the finance on any of your personal assets such as your home.

It’s unlikely that as a startup you’ll have assets readily available to put up as security for business borrowing. At Capalona we understand the importance of not risking company assets that are fundamental for business growth, particularly in the early stages of set up! Lots of the lenders we work with offer start up unsecured business loans, but it’s important to know that you might face higher interest rates.

Unsecured startup business loans carry greater risk for the lender because startups tend to be inherently volatile, without years of successful trading history behind them as evidence for successful borrowing. 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.

business meeting discussing unsecured business loans

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

Unsecured business 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.

Unlike unsecured funding, secured loans tend to take longer to arrange. This is because an independent valuation of the asset you’re putting forward as security needs to be arranged and this can take time. However, with unsecured loans, faster funding is guaranteed. A lot of the finance solutions we arrange end up being same day business loans.


Are unsecured business loan lenders regulated by the FCA?

Many lenders are regulated by the FCA (The Financial Conduct Authority). The FCA also regulates Capalona within the business finance sector. Some business loan products can fall outside the regulatory scope and are not regulated.

We only partner with professional lenders who observe best practices, many of whom are governed by the FCA and are part of trade associations such as the NACFB (national association of commercial finance brokers.)


Are unsecured business loans safe?

Unsecured business loans do not require security, and because of this they can be categorised as a less risky form of borrowing. All loan products come with potential risks, but when you apply for an unsecured business loan through a verified loan brokerage or lender, you will receive a loan agreement that is safe for your business to take on.

As mentioned, many lenders are regulated by the FCA. It is 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.

What our experts say

Testimonial

"An unsecured business loan is great for businesses that need to access smaller amounts of cash quickly, especially if they have not got any assets to secure against."

Chloe Mckenna - Finance Specialist

What our customers say

"We approached Capalona for an unsecured business loan for our hotel. Access to funding was straightforward and we’ve been able to quickly move ahead with development. We know we’ve received the right funding product that suited our business needs."

Capalona review rating4.5/5

James - Hotel Owner

Find out for free if you qualify for an unsecured business loan. Get your free, no-obligation quote today.

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