Compare Unsecured Business Loans To Help You
Our lending partners
What is an Unsecured Business Loan?
An unsecured business loan allows businesses young and old to borrow money with an agreed payment schedule and interest rate. The term ‘unsecured’ means that applicants aren’t required to secure the loan against any commercial or residential property, however, some lenders may ask for a personal guarantee.
Unsecured loans can be used for many different purposes, however they must be used within the business and cannot be taken out for personal use.
Typical uses include:
- Cash Flow
- Business Growth
- Stock Purchase
- Settling Bills
- Refinancing existing debt
Unsecured loans are usually fast to arrange, competitively priced, and are ideal for SMEs who don’t own many assets or who don’t want to put their assets up as collateral. With a variety of unsecured lenders offering loans up to £500k over a maximum term of 5 years, there are options for a wide variety of solutions.
Seeking a loan of more than £500k? Look into our secured business loans instead.
Compare Unsecured Business Loan options today
Apply in Minutes
Free, no obligation quote
Applying won’t affect your credit score
Prefer to talk? Call us on 020 3355 7462
Key features and benefits
- Suitability: Businesses looking to make a cash injection into the company for general business expenses.
- Purpose: Can be used for any business expense.
- Amount: Loans ranging from £1k – £500k, dependant on the lender. You will typically be able to borrow up to 2x your monthly turnover.
- Term: You can spread the capital over 1-5 years. This will depend on credit rating, turnover, profit and trading time.
- Cost: Rates starting from 6% per annum. The lender may also charge an admin fee.
- Security: Personal guarantees will be required form owners/directors of the company. Homeowners and tenants are eligible.
- Speed: Applications can be processed within 24 hours from receiving a full proposal.
Am I eligible for an unsecured business loan?
All companies trading for at least 6 months can apply for an unsecured business loan. You do not need to be a homeowner with all unsecured lenders, however some may require you to hold assets under your name.
Each lender will assess your personal and commercial credit files to assess your credit profile. This means that if you have any outstanding CCJs, this could affect your application. Therefore, we advise that you settle these before submitting an application. Liquidations, bankruptcies and IVAs may also affect your application
How do unsecured loans work?
An unsecured business loan works in the same way as a regular business loan where repayments are made monthly, weekly or daily depending on your agreement. Loan terms can be anywhere between 1 month – 5 years according to your business needs.
The loan can be used for almost any expense in the best interest of the business. Businesses usually use these loans for growth and development, refurbishment, capital expenditure or stock.
Unlike secured loans, ‘unsecured’ means your loan is not secured against any personal or business assets, such as property, equipment, vehicles or machinery. An unsecured loan will most likely require a personal guarantee from 1 or multiple directors.
Typical information required for proposal submission
Unsecured loans are typically based on past business performance, so lenders do not require forecasts or business plans. They will usually ask for bank statements, accounts and director details, however some also ask for a personal asset and liabilities statement to calculate the guarantor’s strength.
Unsecured business loans: FAQs
How much can I borrow on an unsecured loan?
All lenders work slightly differently from each other, however most will either lend on a percentage of your turnover or a multiple of profit. Usually, they will only lend a maximum of two months’ revenue. So, if your typical monthly revenue is £50,000, you will be able to borrow up to £100,000.
Lenders will look into your historical financial data and your credit profile to assess your affordability. Loans typically range from £1k – £500k.
What are the advantages of unsecured loans?
Unlike a secured loan, where you will have to put tangible assets up as security, unsecured loans do not require this. As the name suggests, you don’t need to have any assets behind you, meaning tenants can also apply for this loan.
Unsecured loans can be sourced a lot quicker than other loans, sometimes within 48 hours, as there is no need to obtain a valuation on your assets. Although rates are likely to be more expensive than a commercial mortgage, interest rates can still be very competitive.
In addition to this, with an unsecured loan, most lenders will not penalise you for settling early. Therefore, if your business is performing better than expected you can pay off your loan before the maturity date and save yourself interest on the deal. Some lenders will also allow you to make over-repayments any time throughout the contract, free of charge.
What types of businesses do you lend to?
We can look to assist companies that have been trading for longer than 6 months and have a minimum monthly turnover of £5,000. Unsecured loans are not available for start-ups.
Will I be credit checked?
Once your application is submitted, and with your permission, we will run credit checks on the business, as well as its directors/shareholders.
How much does it cost to get an unsecured business loan?
This will vary from lender to lender, however you can expect rates to start from 6% per annum. Some lenders may also charge an admin fee – this will be a percentage of the loan amount and will likely be deducted from the loan, so there is no need for any upfront fees to be paid.
Can I get an unsecured loan with poor credit?
If your business is in need of finance and you have a poor personal or business credit score, we still have lenders that could assist. This will all depend on your individual circumstance and why you have poor credit. If you have any unpaid CCJs, recent liquidations, bankruptcies or IVA’s it is less likely that unsecured lenders will approve your deal. However, there are plenty of other options available to companies with poor credit, such as a merchant cash advance or secured loan.
Are unsecured loans good for startup businesses?
A startup business will not be able to access unsecured loans. A better option for business funding would be a secured loan.
How do I find an unsecured loan lender?
As business lending specialists, we can match you with a lender from our panel of providers across all types of business financing. When you apply for an unsecured business loan through Aurora Capital, we’ll take your information and find the lender who is best suited to your requirements and who is offering the best terms. We have unparalleled access to the entire business finance market, allowing us to guarantee the very best loan deals for our clients, every time.
What happens if I can’t pay back my unsecured business loan?
Since the amount you can borrow on an unsecured loan is usually based on past business performance, it is unlikely you will find yourself in this position. However, if you do, each lender will have a slightly different process to help you repay. Apply online for your loan now and find out more about terms from specific lenders.
Why choose Aurora Capital for unsecured business loans?
Aurora Capital are experts in business funding in all capacities, and have had years of experience helping clients raise the necessary capital to grow and expand.
Our powerful decision engine pairs businesses looking for quick loans with trusted lenders offering great interest rates and other repayment terms. Whether you’re looking for secured or unsecured business loans, merchant cash advances or property finance, we have the expertise to guide you toward the best decision for you and your business.
Get your free, no obligation quote today!
Prefer to talk? Call us on 020 3355 7462
We cover a multitude of finance options.
Aurora Capital is here to help. Navigate our range of solutions to find out more.
Like what we
have to offer?