Varies according to product, lender and your business profile (usually more expensive than an unsecured loan)
Varies according to product
Any business with a trading history
This is a business loan that doesn’t require you to offer security (in contrast to a secured loan). You might want to consider an unsecured loan if you want to borrow more than the value of your assets, if you would prefer not to offer security, or if you’re a fast-growing business that needs finance quickly.
Here are three scenarios where you might look at taking out an unsecured business loan:
On the plus side, unsecured business loans are usually simpler and quicker to arrange than secured loans because there is no need for the lender to inspect or value any assets.
However, in the absence of any security, the lender cares much more about your business’s profile – and may also look at your personal credit history and personal assets. After all, they will need assurance that you can repay the loan if things don’t go to plan. Unsecured lending is usually more expensive than secured lending because there’s more risk for the lender.
For an unsecured loan the lender may look at:
Unsecured lending is a broad term. As well as short-term loans and ‘term’ loans (i.e. medium-term and long-term loans), it includes, for example, merchant cash advances, revolving credit lines, overdrafts and credit cards.
You might also want to consider the different types of working capital finance.