Looking for an infusion of capital to grow your business but don’t have assets to put up as collateral? Unsecured business loans allow you to borrow without pledging any business assets – making them a flexible financing option.

With loan amounts ranging from £1,000 to £500,000, competitive interest rates, and quick access to funding, unsecured loans present an accessible way for businesses to obtain capital.

But not all unsecured business loans are created equal.

With many lenders offering unsecured financing, comparing interest rates, fees, eligibility criteria, and other loan terms is important to find the best fit for your business.

Whether you need £5,000 or £100,000, these side-by-side comparisons will help you shop smart and secure the most competitive unsecured loan for your capital needs.

Funding Options
unsecured business loans illustration

Unsecured Business Loan are Business Loans Without Guarantor

An unsecured business loan is a type of loan that does not require the borrower to provide collateral. This means that the lender does not have any assets to seize if the borrower defaults on the loan.

Unsecured business loans are typically offered to businesses with good credit histories, as lenders are taking on more risk by not having any collateral to secure the loan.

Unsecured business loans can be a good option for businesses that do not have many assets to pledge as collateral, or for businesses that need funding quickly. However, they typically have higher interest rates than secured business loans, as lenders are taking on more risk.

Here are some of the key features of unsecured business loans:

  • No collateral required: The borrower does not need to provide any assets as collateral.
  • Retain ownership of assets – Businesses get to keep full ownership and use of all their assets versus tying them up as collateral.
  • Easier to obtain for newer businesses – Startups and newer businesses with few assets can still qualify for unsecured loans
  • Fast approval process: The approval process for unsecured business loans is typically faster than the approval process for secured business loans.
  • Flexible repayment terms: Unsecured business loans typically offer flexible repayment terms.
  • Higher interest rates: Unsecured business loans typically have higher interest rates than secured business loans.
  • Stricter credit requirements: Lenders typically have stricter credit requirements for unsecured business loans than for secured business loans.

If you are considering an unsecured business loan, comparing different lenders and loan terms is important to find the best option for your business. You should also carefully consider the higher interest rates and stricter credit requirements before applying.

How do I pay back my unsecured business loan?

To pay back an unsecured business loan, you typically make regular payments according to a set schedule, which includes both the principal amount borrowed and interest. These payments are usually monthly, but the frequency can vary depending on the loan terms. It’s important to make these payments on time to avoid late fees and maintain a good credit score.

How can I get an Unsecured Business Loan?

There are multiple ways to secure an unsecured business loan. Options include approaching high street banks, engaging with financial brokers, or simply use Business Expert’s simple comparison service. To be eligible, your business should be registered in the UK for at least six months and have a minimum monthly turnover of approximately £5,000. Following these prerequisites, here are the steps:

  1. Understand Your Needs: Know why you need the loan and how much.
  2. Check Your Credit: Ensure your business and personal credit histories are good.
  3. Ready Your Financials: Prepare your profit and loss statements, balance sheets, and cash flow statements.
  4. Look for Lenders: Find lenders like banks and credit unions, and compare their terms.
  5. Get Your Documents: Gather your business plan, bank statements, and tax returns for the application.

5 Types of unsecured business loans available in the UK

There are several different types of unsecured financing options for businesses in the UK marketplace, in addition to the standard type of term loan.

Most unsecured loans will have defined repayment schedules with set monthly payments and total repayment periods ranging from a few months up to 7 years. Interest rates and qualification criteria will differ between loan types and providers.

Loan TypeDescriptionRepayment TermsInterest Rates
Term LoansLump sum with fixed monthly repayments over 1-5 yearsFixedVaries, often 6-12%
Business Credit CardsRevolving credit up to a set limitMinimum monthly paymentTypically higher, ~15-25%
OverdraftsLump sum repaid by the percentage of credit card salesNo fixed paymentsVariable rates
Merchant Cash AdvancesLump sum repaid by a percentage of credit card salesFluctuates based on salesFactor rates applied
Peer-to-Peer LoansLoans from non-bank investors via P2P platformsFixedSet by investors, often 4-10%

Does my business qualify for unsecured business loans?

To determine if your business is eligible for unsecured business loans, you should evaluate the following factors:

  1. Credit Score: A good business or personal credit score is usually important. Lenders generally seek a history of on-time payments and responsible credit use.
  2. Business Age: Many lenders require that your business has been operating for a certain period, often at least six months to a year.
  3. Revenue: Your business should have a steady income. Lenders often have a minimum monthly or annual revenue requirement.
  4. Business Plan and Financial Statements: A well-defined business plan and clear financial statements can support your loan application, showing lenders that your business is well-managed and financially sound.
  5. Industry: Some lenders may be hesitant to lend to businesses in certain industries. Ensure your business is not in an excluded category.
  6. Legal and Financial Standing: Your business should be in good legal and financial standing, with no outstanding legal issues or debt obligations that might pose a risk to lenders.

What can I use unsecured business loans for?

Unsecured business loans can be used for a wide range of purposes in your business. These include covering everyday operational expenses like payroll, rent, and inventory, which are crucial for keeping your business running smoothly. You can also use these loans for business expansion, such as funding new projects, opening additional locations, or expanding your range of products or services. Purchasing or upgrading equipment to improve efficiency is another common use, as is consolidating various debts into a single loan with better terms and lower interest rates.

Additionally, unsecured loans can provide emergency funds for unexpected expenses, support marketing and advertising efforts to increase sales, finance research and development for innovation, and help in hiring and training new staff. It’s important to use the loan in a way that supports the growth and financial health of your business.

What is the maximum term length for unsecured business loans?

The maximum term length for unsecured business loans typically ranges from one to five years. However, this can vary based on the lender and the specific circumstances of the business applying for the loan. Some lenders may offer shorter terms, while others might extend longer terms under certain conditions.

Top 10 Unsecured Loan Providers

Here’s a comparison table for these different types of unsecured business loans:

Loan ProviderAmountFeaturesEligibility CriteriaRepaymentFeesTime to Funding
Uncapped£50,000 – £10 millionNo securities, guarantees, dilutionOnline model businessesDaily, weekly, monthly schedulesFlat fee as low as 2%24 hours
Cubefunder£5,000 – £100,000Can be used for any business purposeLtd company in England/Wales, min. £4k monthly turnover, min. 3 months in businessFlexible£395 for <£40k, £595 for >£40k48 hours
Capify£5,000 – £500,000No assets or security required, simple renewal processTrading over 12 months, min. £10k monthly turnoverFixed regular repaymentsUnknown24 hours
Barclays£1,000 – £100,0006-month repayment holiday option, no early repayment feesFinancial history info required12-60 monthsUnknown48 hours
Natwest£1,000 – £50,000No early repayment or closure charges, online application for existing customersUnknown1-7 years (up to 10 on request)Unknown24 hours
LloydsUp to £25,000No early repayment fees, application for existing customersUnknownVaries12.7% APR (variable or fixed)48 hours
Santander£2,000 – £25,000No interest for first 12 months, no arrangement fees, preferential rate for eligible customersRequires Santander business current accountFixed monthly repayments over term7.9% APRFew days
Bank of ScotlandUp to £25,000No early repayment fees, application for existing customersUnknownVaries12.7% APR (variable or fixed)48 hours
Metro BankUp to £25,000No arrangement feesUnknown1-5 years9.6% APRUnknown
TSB£1,000 – £1,000,000Capital repayment holidays, fixed rate for termUnknown1-10 yearsUp to 1.5% of loan amountUnknown

Please note that the features, eligibility criteria, repayment schedules, fees, and time to funding can vary significantly between lenders and may also depend on the specific circumstances of the business applying for the loan.


  • Unsecured loans from £50,000 to £10 million for eligible online businesses like SaaS, ecommerce, subscriptions, etc.
  • Flat fees as low as 2% of the loan amount. No ongoing interest rates.
  • Fast eligibility decisions in 30 seconds. Offers typically made within 24 hours.
  • Flexible daily, weekly or monthly repayment schedules.
  • Funds can be used for any business purpose with no restrictions.


  • Unsecured term loans from £5,000 to £100,000 for UK limited companies.
  • Minimum 12 months trading history and £4,000 monthly turnover required.
  • Fixed admin fees of £395 for loans under £40,000 and £595 for loans over £40,000. No other fees.
  • Flexible repayment terms available. Funds accessible within 48 hours of approval.
  • Can be used for any business purpose. No early repayment fees.


  • Unsecured business loans from £5,000 to £500,000.
  • Need 12+ months trading history and minimum £10,000 monthly turnover.
  • Fixed repayments terms from 1-5 years.
  • No business assets required as security. Fast, simple application process.
  • Funding available as soon as 24 hours after approval.


  • Unsecured term loans from £1,000 to £100,000 for UK SMEs.
  • Fixed interest rates and repayment terms of 12-60 months.
  • Option for 6-month repayment holiday (interest still accrues).
  • Quick approval and funding within 48 hours of paperwork.
  • Financial statements and records required. No early repayment fees.


  • Unsecured loans from £1,000 to £50,000 for small businesses.
  • Fixed interest rates and repayment terms of 1-10 years.
  • Existing NatWest customers can apply online in under 10 minutes.
  • Quick approval and funding within 24 hours.
  • Interest rates and APR can be checked online. No early repayment fees.

Lloyds Bank:

  • Unsecured loans up to £25,000 for small businesses.
  • Representative APR of 12.7% (fixed or variable).
  • Existing Lloyds customers can apply online in minutes.
  • Quick approval and funding within 48 hours.
  • Interest rates based on creditworthiness and loan amount. No early repayment fees.


  • Unsecured loans from £2,000 to £25,000 over 1-5 year terms.
  • Representative APR of 7.9%. No fees charged.
  • No interest for the first 12 months. Fixed monthly repayments.
  • Must have Santander business account. Preferential rates for some customers.
  • Quick approval and funding within few days.

Bank of Scotland:

  • Unsecured loans up to £25,000 for small businesses.
  • Representative APR of 12.7% (fixed or variable).
  • Existing customers can apply online in minutes.
  • Quick approval and funding within 48 hours.
  • Interest rates based on creditworthiness and loan amount. No early repayment fees.

How Do Unsecured Business Loans Work?

Here’s a breakdown of how it typically works:

  1. Application and Assessment: The business applies for the loan, providing financial information such as revenue, profit, and credit history. The lender evaluates this data to assess the creditworthiness and risk involved in lending to the business.
  2. Loan Approval and Terms: If the lender approves the application, they will offer loan terms, including the amount, interest rate, and repayment schedule. These terms are usually based on the perceived risk and the business’s financial health.
  3. Funding: Once the terms are agreed upon, the lender disburses the loan amount to the business. This is usually a lump sum transferred to the business’s bank account.
  4. Repayment: The business repays the loan over the agreed term in regular instalments, which includes the principal amount plus interest. The frequency of repayment (e.g., monthly, quarterly) and the interest rate are predetermined in the loan agreement.
  5. Closure of Loan: Once the business repays the loan in full, including any interest and fees, the agreement is concluded.

Pros and Cons of Unsecured Business Loans


  • Flexible Duration – Repayment schedules can range from as short as a month to as long as five years, depending on your business needs.
  • No Asset Security Required – Eliminates the need to commit valuable business assets as collateral.
  • Minimal Administration – The process is straightforward and efficient, requiring minimal paperwork for arrangement.
  • Prompt Access to Funds – Quick release of loan funds to promptly enhance your business’s cash flow.
  • Dischargeable in Insolvency – Unsecured loans are typically dischargeable in cases of insolvency, a feature not commonly found with secured loans.
  • Reusable Funding Source – Once repaid, unsecured loans can often be drawn upon again, serving as a renewable source of capital.
  • Flexible Repayment Terms – Offers the convenience of tailored repayment schedules to suit your business’s financial situation.


  • Higher interest rates – Lenders take on more risk
  • Lower loan amounts – Approvals capped due to higher risk
  • Stricter eligibility standards – Strong revenue and credit score required
  • Potentially requires a personal guarantee – Personal assets may still be at risk
  • Missed payment penalties – Can damage business credit score
  • Less tax deductible – Potentially fewer interest deductions

Can I get a Business Loan Without a Personal Guarantee?

Getting a business loan without a personal guarantee in the UK is extremely rare, and finding lenders willing to provide such a loan won’t be easy.

Some options include government-backed loans, such as those offered by the British Business Bank, and crowdfunding platforms, which allow investors to provide funding to businesses in exchange for a share of the company’s equity.

Additionally, some alternative lenders, such as peer-to-peer lending platforms, may also offer business loans without a personal guarantee, although the terms and interest rates may be less favourable than those offered by traditional banks.

Personal Guarantee Clauses in Business Loans

Personal guarantee documents, typically signed by company directors, will place a personal asset as security for a business loan in the event of default.

It’s somewhat paradoxical that even so-called ‘unsecured’ loans require these, since they are themselves a form of security.

They should never be signed lightly since these legal documents are specifically designed to breach the corporate veil.

Where personal guarantees are required, we always recommend the use of personal guarantee insurance policies. The company can pay these and offer a powerful level of reassurance for directors who have put their family homes on the line for the sake of business growth.

Eligibility Criteria for No Personal Guarantee Business Loans

As far as we know, no lenders will offer genuinely unsecured loans without a guarantor. The closest you’ll find will be something like Paypal Working Capital.

Because Paypal can see very clearly how much money is passing through someone’s account, they are prepared to free up capital based on past performance.

You can get a working capital advance of up to 40%, with repayments taken as a fixed percentage from each future sale until the loan is repaid.

To be eligible for PayPal Working Capital, you need to meet the following conditions:

  • You’ve had a PayPal Business account for at least 3 months.
  • Your business processes at least £9,000 in eligible PayPal sales annually.
  • Your business is registered in the United Kingdom.
  • You haven’t failed to repay any prior PayPal Working Capital cash advances.

Can you get an Unsecured Loan with Bad Credit?

Obtaining an unsecured loan with bad credit is difficult since the lender must assess risk before agreeing on the funds.

Where your business’s credit history indicates high risk, it may still be possible to agree on a loan, but the amount will be lower and the interest likely higher as a result. Good credit is always a precursor to being able to secure higher levels of funding.

There are lenders out there who specialise in higher-risk lending, so it’s certainly possible, assuming a personal guarantee can be offered.

As long as the lender perceives the loan repayments to be affordable, a range of finance options do exist, so contact us to find out more about the right provider for your business needs.

What are the Average Interest Rates for Unsecured Business Loans?

Interest Rates will fluctuate widely depending on:

  • the amount of the loan
  • duration
  • your company credit score
  • Your business history, how long you’ve been trading and overall reputation

Currently, typical Rates range from around 1.3% APR.

Enterprise Finance Guarantee Loans

For companies with no proven track record or who have been turned down for other forms of business finance due to poor credit, the British business bank-backed Enterprise Finance Guarantee may be the ideal way to get your foot on the finance ladder.

With EFG-backed finance, the government essentially agrees to take on primary responsibility for loans which default, thereby offering heavily reduced risk to lenders. Eligibility for EFG loans rests solely with the provider, who would follow governmental criteria.

EFG scheme loans mean the borrower pays fees to the lender exactly as usual and a quarterly fee to the government. This extra fee can mean this type of finance is more expensive than some other loans, but since it makes loans available to businesses who wouldn’t otherwise have qualified, it is a popular option for many.

Compare Business Loans and Find the Best Unsecured Finance Quote

It isn’t quite as simple as saying that the lowest business loan rate equals the best deal for any company. In some cases, slightly higher interest rates may actually mean a far better overall deal.

We’ve found that a wide range of factors combine to mean that each business situation will have its own best match with a particular provider.

Contributory factors include:

  • Amount of Paperwork
  • Responsiveness of lender
  • Speed of Payment – many promise ‘within 48 hours’, but do they actually deliver?
  • Charges, Rates and Fees
  • Business Sector
  • Do they Offer Flexible Repayment Terms?
  • Are there penalties for early repayment?

Unsecured Business Loans for Startups

Startups at generally in a difficult category for finance. Without a trading history or assets, many struggle to find the finance necessary to catalyse growth.

For smaller amounts (£25k or less) the government’s startup loan scheme is worth investigating.

For larger amounts, the presence of a director’s personal guarantee is essential, but in these cases, it is possible to find good deals on loans of up to 150k. Contact us for details.

A carefully prepared business plan, clean personal credit score, and income projects will be necessary in all cases.

Alternatives to Consider

Secured LoansLower rates, larger amounts, longer termsRequire valuable collateral
Enterprise Finance Guarantee LoansGovernment-backed, lower qualificationsMore expensive, limited amounts
Business Lines of CreditRevolving credit, pay interest on what you useLower approvals, need to renew frequently
Merchant Cash AdvancesNo credit checks neededVery high equivalent interest rates, daily repayments
Equipment FinancingUse equipment as collateralLimited to equipment needs, complex tax considerations
Business Credit CardsQuick access to smaller amounts, convenientHigh interest rates, need to pay off monthly

Unsecured Business Loan FAQs

Are Unsecured Loans Safe?

Is it Possible to Get an Unsecured Loan Without a Personal Guarantee?

Practically speaking, borrowing money from any private lender without offering security is impossible. The government start-up loans scheme does offer finance of up to 25k, without guarantee, providing their other criteria are met.