business loans

Unsecured Business Loans

If you don’t have any assets, or don’t want to use any assets as a form of security against finance, then an unsecured business loan could be the right option for you. 

This type of commercial loan is used to gain funds quickly, without using any business assets such as property or equipment, as a form of security. 

Not too sure if an unsecured business loan is right for you? Don’t worry, we explain much more about what they are, how they work, the advantages and why you might need one, so that you understand everything you need to know to get the right commercial finance you need. 

What are unsecured business loans?

With an unsecured business loan you don’t need to use any assets as a way of security to gain funds. This means you don’t need to secure any of your personal or business assets in order to get finance. 

Unsecured business loans offer a quick, flexible way to access funds without putting assets such as property, land or equipment at any potential risk. It’s a particularly beneficial type of commercial finance for those businesses that don’t yet have any assets, or those that simply don’t want to use them as security against a loan. 

How do unsecured business loans work?

Unsecured business loans work in a very similar format of any other business or personal loan, in the sense that you simply apply for the funds, receive them once accepted and begin to pay it back, plus any interest, over a set period of time.

  • The process of applying for an unsecured business loan is pretty straight forward, and our team of financial experts will work with you to ensure you understand the options and agreement.
  • We’ll then do the research for you to find the best possible deal and lender suitable for your specific financial needs.
  • Once you’re happy with the agreement and sign it, we’ll arrange the funds to be with you in a matter of hours.
  • You will then pay off the loan in monthly, or quarterly instalments, in-line with the agreement, over the course of the period, which can be anything from a few months to a few years.

What are the advantages of an unsecured business loan?

Well, as discussed, the main advantage is that you don’t need to have or use assets as security to access funds. This is most advantageous to many businesses of all shapes and sizes, as understandably not everyone has equity in assets to use. 

Other advantages include;

  • Quicker, easier access to funds - The process of applying and securing funds via an unsecured business loan is more simplistic than a secured business loan. This means, you can typically receive funds much quicker.
  • Use the funds for whatever you need - Once you have the finance, you can use it for whatever business reasons you want or need.
  • You can borrow anything from £25,000 to £250,000 amount of funds.
  • Fixed monthly repayments over flexible terms from 3 months to 3 years.

Whilst there are many great advantages, you may want to consider other options. 

Unsecured loans can also include signing of Personal Guarantees. This means the director of the company agrees to be personally liable for the company’s debt. These guarantees are enforceable by the lender.

Who are unsecured business loans suitable for?

Unsecured business loans are a suitable financial option for businesses of all sizes and industries who either don’t have assets or simply don’t want to use them to secure funds. 

They are most suitable to businesses who require a quick, and relatively small amount of money to support their survival or growth. Many businesses don’t have tangible assets to use, whether they are start up businesses or have rented spaces and equipment. 

Are unsecured business loans better for startups?

Unsecured business loans are often a preferred form of financing for many start ups, because they don’t have assets to secure it against. That said, it isn’t necessarily the best option, so it is always worth researching first and you can discuss your needs with our team for more information and advice.

How to get an unsecured business loan

Applying for an unsecured loan through a broker ensures that given your unique circumstances, you apply with the most appropriate lender, considering your length of time in business, loan amount sought and many other factors. 

Most lenders will require you to have been trading for a minimum of 6 months, in many cases this can be 2 years or more, and the financial accounts available must be able to demonstrate the new loan is affordable.

Can I still get an unsecured business loan if my credit is poor?

Quite often yes you can still be approved for an unsecured business loan if your credit isn’t favourable. This is because there are many other factors, above, to be considered when securing a loan.

Apply for an unsecured business loan with Hilton Smythe Finance

We understand taking out a loan of any size is a big commitment, therefore the decision should be made confidently with all of the information you need to make an informed decision. 

Our friendly, expert team will take the time to discuss your requirements and explain your commercial finance options in the simplest form possible. 

Taking out a loan is a significant financial commitment for any business, so it's essential to have all of the information you need before applying. 

Other types of Commercial Loans

Whether it's a secured loan or a quick unsecured loan, companies can benefit from a range of business loans for a variety of purposes and to support different situations.

Commercial Bridge Loans

A commercial bridging loan is what it’s name suggests. It is a short term loan that is used to secure funds quickly against the commercial property bridging the gap between other methods of financing, often used to support the purchase of a property swiftly.

Secured Business Loan

A secured loan is used to gain funds by using an asset owned by the business as a form of security. 

A commercial asset could be a property, furniture, company vehicles or any equipment. In the event of the business being unable to make any loan payments they could use the assets to recover the funds.

Not sure what you need? Speak to us today and we will work out the most affordable, hassle-free solution for you to meet your business needs and not leave you with financial headaches down the line.

Other types of Commercial Loans: