Unsecured business loans explained: rates and requirements

Published and reviewed 22 October 2026. General information, not advice. Figures are illustrations, not lender quotes.

The short version

An unsecured business loan is a lump sum repaid in fixed instalments, with no charge over property or equipment. The lender relies on the company’s cash flow and credit record instead, and usually on a personal guarantee from the directors.
Most lenders size the loan with three tests: a cap of around 20% to 25% of annual turnover, what the profits can repay, and what the bank statements show. In our example, a company turning over £400,000 could borrow about £100,000.
In October 2026, bank unsecured loans commonly cost about 8% to 15% APR and online lenders about 15% to 40%. Merchant cash advances and short-term facilities can cost far more once converted to an APR.
The same £50,000 cost about £10,300 over four years from a bank, about £19,500 from an online lender with a fee, and £12,500 as a merchant cash advance repaid in under a year, at an APR of about 62%.
“Unsecured” describes the asset, not the risk. A personal guarantee can make a director liable for the whole debt if the company cannot pay, so read it as closely as the loan itself.

What an unsecured business loan is, and what it is not

An unsecured business loan is money lent to a business without the lender taking a legal charge over a specific asset. The company receives a lump sum and repays it, with interest, in fixed instalments over an agreed term, usually monthly and usually over one to five years. If the loan is not repaid, the lender cannot simply take and sell a building or a machine. It has to recover the debt in other ways.

Because nothing specific stands behind the loan, the lender’s decision rests on evidence that the business can pay: turnover, profit, the way money moves through the bank account, existing debts and the credit records of the company and its directors. That makes unsecured loans quicker to arrange than secured ones, with no valuation and less legal work, but usually smaller, shorter and dearer.

Three things an unsecured loan is not:

Not free of personal risk. Most lenders to small and medium-sized companies ask the directors for a personal guarantee. If the company cannot pay, the lender can pursue the director personally. See personal guarantees and debentures below.
Not always free of any charge. Some loans marketed as unsecured still come with a debenture, a charge over the company’s assets in general, or reserve the right to take one. Ask directly whether anything will be registered at Companies House.
Not a single product. Lenders and brokers use “unsecured” for several kinds of finance that work quite differently, from a fixed-rate bank loan to a cash advance repaid from card takings.

Types of unsecured business finance
Type	How it works	Typical size and term	Often suits
Unsecured term loan	A lump sum repaid in fixed monthly instalments, usually at a fixed rate.	About £1,000 to £500,000, some lenders more. 1 to 5 years, some up to 7.	A defined project with a known cost: hiring, marketing, fit-out, stock for a contract.
Revolving credit facility	A limit you draw from and repay as needed, paying interest only on what you use.	A few thousand pounds to a few hundred thousand. Usually reviewed every year.	Uneven cash flow and repeated short gaps rather than one purchase.
Business overdraft	An agreed limit on the current account. Usually repayable on demand.	Often up to the low tens of thousands for small firms. Reviewed every year.	Small, short and unpredictable dips in the balance.
Business credit card	A card limit, often with an interest-free period if the balance is cleared each month.	Usually a few thousand pounds.	Everyday spending, cleared monthly. An expensive way to borrow for longer.
Merchant cash advance	An advance repaid as a fixed share of card takings, for a fixed total fee.	Often a month or two of card sales. Usually repaid in 3 to 18 months.	Card-taking businesses such as shops, cafés and salons with seasonal sales.
Revenue-based finance	Similar to a cash advance, but repaid as a share of all revenue, often online sales.	Often a share of annual revenue. Usually repaid within a year or two.	Online and subscription businesses with steady sales but few assets.
Government-backed loan	An ordinary loan or overdraft from an accredited lender, with a partial government guarantee to the lender.	Up to £2 million under the Growth Guarantee Scheme.	Viable companies that lack the security or record a lender would otherwise want.

The government Start Up Loan is also unsecured, but it is a personal loan to an individual for business use rather than a loan to a company. Our startup business loans guide covers it in detail. The rest of this guide focuses on unsecured borrowing by UK limited companies.

When an unsecured loan is the right tool

An unsecured loan works best for spending that will pay for itself within the term, where there is no single asset to finance and the amount is modest compared with the size of the business.

Hiring ahead of growth. Paying a new team member for the months before their work brings in revenue.
Marketing and launches. A campaign, a new website or a product launch with a clear expected return.
Stock for a known order or season. Buying stock for a contract, a busy season or a bulk discount.
Fit-out and refurbishment. Improving leased premises, where there is no property to secure a loan against.
Bridging a gap in cash flow. A one-off gap, such as a delayed contract payment, with a clear date when the money comes back.
Tax bills. Spreading a corporation tax or VAT bill, though HMRC’s own Time to Pay arrangement may be cheaper. Lenders will want to know why the money was not set aside.
Refinancing dearer debt. Replacing a short-term advance or credit card balances with a longer, cheaper loan.

When something else usually fits better

Buying equipment or vehicles. Asset finance uses the asset itself as security, so it is often cheaper, longer and easier to get than an unsecured loan.
Cash tied up in unpaid invoices. Invoice finance grows with sales and is secured on the invoices.
Buying premises. A commercial mortgage spreads the cost over up to 25 years.
Large sums or long terms. If you need more than about a quarter of annual turnover, or more than five years to repay, a secured loan is usually the realistic route.
Covering losses. Borrowing to cover a business that is losing money every month delays the problem and adds interest. Fix the trading first, and take advice if the company may not be able to pay its debts.

Match the term to the life of what the money pays for. A three-year loan for a three-year marketing push makes sense. A five-year loan for stock that sells in three months means paying interest long after the benefit has gone.

How much can you borrow without security?

Without an asset to set a ceiling, lenders size an unsecured loan on the business itself. Most use some combination of three tests, and the lowest answer is the most they will lend.

A share of turnover. Many lenders cap unsecured borrowing at around 20% to 25% of annual turnover for an established business, and less for a young or volatile one. As an example of published criteria, iwoca says it typically lends up to about 20% of annual turnover, from £1,000 to £1 million, and caps businesses trading for under a year at £10,000.
Affordability from profits. The lender checks that earnings cover all debt repayments, not just the new loan, with room to spare. A common measure is earnings before interest, tax, depreciation and amortisation (EBITDA) divided by total yearly debt repayments, often required to be at least 1.25 to 1.5.
What the bank statements show. Many online lenders read six to twelve months of statements through open banking and limit the new repayment to a share of the average monthly money coming in.

Worked example: sizing an unsecured loan

A limited company has turned over £400,000 in each of the last two years, with EBITDA of £70,000. It already pays £800 a month on a van on hire purchase. It wants an unsecured loan at 12%. The lender’s tests are illustrations, not any lender’s criteria.

Turnover cap at 25%: up to £100,000.
Affordability at 1.4 times cover: £70,000 divided by 1.4 allows £50,000 a year of total repayments, or £4,167 a month. Less the £800 van payment, that leaves £3,367 a month, enough to repay about £101,400 over three years or £127,800 over four.
Bank statement test: average money in of £33,333 a month, with the new repayment limited to 10% of it, allows £3,333 a month, about £100,400 over three years.

All three tests land close to £100,000. On a three-year term the repayment would be about £3,321 a month, with £19,570 of interest. A longer term would lower the monthly cost to about £2,633 over four years, but it would not raise the limit, because the turnover cap binds first.

Three practical lessons follow. Existing finance counts against you, so clearing a small, expensive debt before applying can raise the limit by more than its own size. Lenders use the latest figures they trust, so up-to-date management accounts help if this year is stronger than the last filed accounts. And asking for far more than these tests allow is one of the commonest reasons for a decline. Our guide to how much a business can borrow works through each test in more detail.

Unsecured business loan rates in October 2026

For context, the Bank of England’s Bank Rate has been 3.75% since December 2025, and the Bank of England puts the average effective rate on new bank loans to businesses at 5.57% in August 2026. That average is weighted towards large and secured loans. Small unsecured loans are priced well above it, because the lender has nothing to fall back on except the business and any guarantee.

Typical rates on unsecured business finance, October 2026
Type	Typical cost	How it is usually quoted
High-street bank unsecured loan	About 8% to 15% APR	A fixed annual rate. Published representative examples generally fall in this band, with smaller loans at the top of it.
Online or specialist lender loan	From about 7% for the strongest firms, often 15% to 40% APR	An annual rate or a monthly rate, priced closely on risk. Sometimes with an arrangement fee.
Revolving credit facility	Often a monthly rate on the amount drawn	Interest only on what you use, sometimes with a fee for the limit itself. Convert to an annual figure to compare.
Business overdraft	Often Bank Rate plus several percentage points, variable	An annual rate on the overdrawn balance, plus an arrangement or renewal fee.
Merchant cash advance	Equivalent APR often 40% to over 100%	A factor rate, such as 1.2, which sets the total repaid. The faster it is repaid, the higher the true annual cost.
Start Up Loan	7.5% a year, fixed	A government-backed personal loan of £500 to £25,000, repaid over 1 to 5 years.

These are indicative ranges for UK limited companies, drawn from published lender examples and market data. They are not quotes. A representative APR is the rate that at least 51% of accepted applicants receive, so many businesses are offered more, and an advertised “from” rate may go to very few.

What moves your rate

Trading record and accounts. Two or more years of filed accounts showing profit usually earn the lowest rates. Under two years, expect fewer lenders and higher prices.
Size of the loan. Small loans cost the lender almost as much to arrange as large ones, so they often carry higher rates. Some banks price in bands, with the lowest rate only on larger amounts.
Credit files. Missed payments, county court judgments or late filing at Companies House, for the company or a director, all push the rate up or end the application.
Cash flow. Steady balances and an overdraft kept within its limit signal low risk. A balance that hovers near zero signals the opposite.
The guarantee. A loan with a full personal guarantee from directors with their own assets is usually cheaper than one without.

Our guide to business loan interest rates explains how to convert flat, monthly and factor rates into an APR so that offers can be compared fairly.

Fees and terms to check before you accept

The rate is only part of the price. Ask every lender for the full repayment schedule and the total amount repayable in pounds, then check each of these.

Fees and terms on unsecured business loans
Item	What to look for	Why it matters
Arrangement fee	Nothing at many banks. Often 1% to 5% at online lenders.	If it is deducted from the advance, you receive less than you borrow but pay interest on the full amount.
Broker fee	Nothing to a few per cent of the loan.	Ask how the broker is paid, including any commission from the lender, before you agree to anything.
Early repayment	Free at some lenders, a few months’ interest at others.	With a cash advance or a fixed total charge, repaying early may save nothing at all.
Repayment frequency	Monthly, weekly or even daily collections.	Daily or weekly payments reduce the balance faster, so the true annual cost is higher than the rate suggests.
Late payment and default interest	A fixed fee and a higher rate on overdue amounts.	These can add up quickly and are hard to negotiate away once a payment is missed.
Variable or fixed rate	Most term loans are fixed. Overdrafts and some facilities are variable.	A variable rate rises with Bank Rate, and with it the monthly cost.
Conditions	Covenants, information duties and events of default.	A loan can become repayable early if, for example, the company takes on other debt without consent.

Bank products are often the simplest. As one example, NatWest’s small business loan lends £1,000 to £100,000 over one to seven years at a fixed rate, with no set-up fee and no early repayment fee, though a personal guarantee may be required. Check the current terms with the lender, as products change.

Our guide to comparing business loans sets out how to put offers side by side on the amount received, the total repaid and the term, and our guide to business loan quotes shows where to get one without a hard credit search and compares four quotes on the same £50,000.

Worked example: the same £50,000 three ways

Worked example: comparing unsecured offers

A café and catering company needs £50,000 to fit out a second site. It takes about £40,000 a month in card payments. It has three offers. All rates and fees are illustrations, not quotes.

A bank loan at 9.5% a year fixed over four years, with no fees.
An online lender loan at 16% a year over four years, with a 3% arrangement fee of £1,500 taken from the advance.
A merchant cash advance with a factor rate of 1.25, so £62,500 is repaid in total, collected as 15% of card takings.

Illustrative cost of £50,000 of unsecured finance
	Bank loan	Online lender loan	Merchant cash advance
Money received	£50,000	£48,500	£50,000
Monthly payment	£1,256	£1,417	About £6,000, varying with sales
Time to repay	4 years	4 years	About 11 months
Interest and fees	£10,296	£19,517	£12,500
Total repaid	£60,296	£68,017	£62,500
Equivalent APR	About 9.9%	About 19.2%	About 62%
Repaying early	Check for any charge	Check for any charge	Usually saves nothing

What the numbers show. The bank loan is cheapest by every measure, but it is the hardest to get and the slowest to arrange. The online loan costs about £9,200 more, almost half of it because the fee is taken upfront and the company pays interest on money it never received. The cash advance looks cheap in pounds, only £2,200 more than the bank, but because it is repaid in under a year its true annual cost is about 62%, and the café must find about £6,000 a month instead of £1,256.

If trade slows. If card takings fell to £30,000 a month, the cash advance would collect about £4,500 a month and take about 14 months to clear. The total stays at £62,500, and the equivalent APR falls to about 45%. That flexibility is the advance’s real selling point: the payments shrink when sales do. A fixed loan payment does not.

The practical order. Ask your own bank first, then compare online lenders on the total repaid and the money actually received. Treat a cash advance as a short-term tool for a business whose card sales swing with the seasons, not as a cheap alternative to a loan.

Run your own figures through the unsecured loan calculator. Monthly payments in this example are on a standard repayment basis. The APRs are annualised from the monthly cash flows, including the fee deducted from the online loan.

Personal guarantees and debentures: what “unsecured” leaves on the line

A personal guarantee is a promise by an individual, usually a director, to pay the company’s debt if the company does not. It is the main reason an unsecured loan to a limited company is not risk-free for the people who run it. Most lenders to small and medium-sized companies ask for one.

Common kinds of personal guarantee
Kind	What it means	Points to check
Unlimited guarantee	The director is liable for the whole debt, plus interest and the lender’s costs.	Ask whether it can be capped. It is the most common form for unsecured loans.
Limited guarantee	Liability is capped at a fixed amount or a percentage of the loan.	Check whether interest and costs are added on top of the cap.
Joint and several	With two or more guarantors, the lender can claim the full amount from any one of them.	One director could end up paying for everyone. Agree between yourselves what happens if that occurs.
All-monies or continuing	Covers everything the company owes the lender, now and in future, not just this loan.	Ask for it to cover only this loan, and how to end it for future borrowing.

A guarantee does not have to be secured on a home to put one at risk. If a lender wins a court judgment against a director under a guarantee and it is not paid, it can apply for a charging order over property the director owns. Before signing, ask:

Whether a guarantee is needed at all, and whether a lower rate would apply if you gave one.
Whether it can be capped, and whether it reduces as the loan is repaid.
When the lender can call on it: only after the company has defaulted, or at any time.
Whether you are released when you leave the company, or only when the debt is cleared.
Whether you can take independent legal advice first. A reputable lender will expect it.

Can you get an unsecured business loan without a personal guarantee?

Sometimes. Larger, profitable companies with several years of accounts are most likely to be offered one. Some lenders offer guarantee insurance or a capped guarantee instead. Loans under the government-backed Growth Guarantee Scheme can still involve personal guarantees, but the scheme does not allow the lender to take a director’s main home as security. Expect a loan without a guarantee to be smaller or dearer.

Debentures

A debenture gives a lender a charge over the company’s assets in general, usually a floating charge over stock, cash and debts, often combined with fixed charges over specific assets. Some “unsecured” loans include one, particularly larger loans and revolving facilities. It is registered at Companies House, other lenders will see it, and it can make later borrowing harder because a new lender would rank behind it. Our guide to personal guarantees explains the documents in more detail.

Unsecured business loan requirements

There is no single set of rules. Each lender sets its own criteria, and online lenders are usually more flexible than banks on trading history but stricter on bank statements. These are the checks most UK lenders apply to a limited company.

What lenders typically require for an unsecured business loan
Requirement	High-street banks	Online and specialist lenders
Trading history	Usually one to two years of filed accounts	Often from six to twelve months, some from three or four months for small sums
Turnover	Enough to show the loan is a modest share of sales	Often a stated minimum, commonly in the tens of thousands of pounds a year
Accounts	Filed accounts, plus management accounts for larger loans	Often bank statements only for smaller loans, accounts for larger ones
Bank statements	Six to twelve months, sometimes through open banking	Six to twelve months, usually through open banking
Credit record	Clean company and director credit files	More tolerant of old problems, priced into the rate
Directors	Aged 18 or over, usually UK resident, willing to guarantee	The same, with a guarantee almost always required
Bank account	A business current account, sometimes with the lender itself	A business current account with any UK bank
Up to date with HMRC and Companies House	Expected	Expected. Overdue filings or tax arrears are a common reason for a decline

The Centre for Finance, Innovation and Technology’s April 2026 report found that fewer than half of UK small business loan applications now succeed. The most common reasons for a decline include weak or uneven cash flow, low balances and heavy overdraft use, a short trading record and adverse credit. Our guide on how to get a business loan lists every document lenders ask for.

Credit checks: soft searches, hard searches and whose file

An unsecured lender relies on credit files more than a secured one, and it usually checks more than one.

The company’s file. Payment history with suppliers and lenders, county court judgments, filing history at Companies House and any existing charges.
Each director’s personal file. Especially if they will give a personal guarantee. Missed personal payments, defaults and judgments all count.
Soft search. Many lenders give an indicative quote after a soft search, which you can see on your file but other lenders cannot. It does not affect your score.
Hard search. A full application usually triggers a hard search, which other lenders can see. Several in a short time can suggest the business is struggling to get credit.

Before applying, check the company and director files with the main credit reference agencies, correct any errors, make sure accounts and the confirmation statement are filed on time, and keep the bank account within its limits for a few months. Ask each lender or broker which kind of search it uses and at what stage.

How to get an unsecured business loan, step by step

A straightforward application to an online lender can be decided within a day or two and paid within a week. A bank usually takes from a few days to a few weeks. These steps apply to both.

Define the need. Write down what the money is for, how much it costs, when it will pay back and how. Lenders ask, and the answer shapes the right product and term.
Size it against the three tests. Check the amount against about a fifth to a quarter of turnover, the repayment against your profits, and the repayment against a quiet month in your bank statements.
Check you have the right product. If the money is for equipment, invoices or property, compare asset finance, invoice finance or a secured loan first.
Get your paperwork ready. Filed accounts, up-to-date management accounts, six to twelve months of bank statements, a list of existing borrowing, and identity and address details for each director.
Check credit files. For the company and every director who will guarantee the loan.
Ask your own bank first. It already sees your account, and bank loans are often the cheapest unsecured option.
Get indicative quotes. From two or three other lenders or a broker, using soft searches where offered. Ask for the APR, all fees, the total repayable and the guarantee terms.
Compare like for like. The amount you receive, the total you repay, the monthly or daily payment, early repayment terms and the guarantee.
Apply in full. Expect a hard credit search, an open banking check and questions about the figures.
Read the agreement and the guarantee. Check the events of default, any debenture and what the guarantee covers. Take independent legal advice on the guarantee.
Draw down and plan the repayments. Set the payment date for after your main income arrives, and keep a buffer in the account.

If you are declined, or offered less

A decline is information. Ask the lender for the main reason, because it tells you what to fix and which lender to try next.

Ask for a referral under the Bank Referral Scheme. Under the Bank Referral Scheme, nine designated banks must offer, with your consent, to pass your details to designated finance platforms when they turn down a business with annual turnover under £25 million. CFIT reports that only about 6% of referred businesses go on to secure finance, so treat it as one option rather than the answer.
Ask about government-backed lending. Under the Growth Guarantee Scheme, the government guarantees 70% of an accredited lender’s loss on eligible loans of up to £2 million. In July 2026 the government announced an expansion, raising the turnover limit to £54 million and the maximum term to ten years for loans up to £1.1 million, which accredited lenders are phasing in. The business still owes the whole debt, and the lender still sets the rate.
Consider a community lender. Community development finance institutions lend to viable businesses that mainstream lenders turn down, often with support alongside the loan.
Borrow less, or offer security. A smaller loan, a longer term or security over an asset may turn a no into a yes.
Fix what you can, then reapply. File overdue accounts, correct credit file errors, rebuild the bank balance and keep the overdraft in its limit for a few months. If your next set of accounts will be stronger, consider waiting until they are filed.

New companies and poor credit

Both make an unsecured loan harder to get, but not impossible.

Companies with little or no trading history

Most lenders want to see at least six months of trading in the bank account, and banks usually want at least one set of filed accounts. A company younger than that has few unsecured options apart from small sums from specialist lenders, a business credit card, or a director lending money in. Founders can apply for a personal Start Up Loan for business use. Our guide to startup business loans sets out which funding fits each stage.

Companies or directors with poor credit

Some online lenders and cash advance providers will lend despite past problems, but at higher rates and for smaller sums. Be cautious: a high-cost advance taken to cover a gap can make the next gap worse. Explain any past problem upfront, with evidence that it is resolved, rather than leaving the lender to find it. A county court judgment that was paid within a month is removed from the register, and one that was paid later is marked as satisfied, which reads better than one left outstanding.

Our guide to bad credit business loans shows how lenders weigh each kind of credit problem, what it adds to the cost and how to check and fix your files before applying.

If the business is struggling to meet its existing debts, more unsecured borrowing is rarely the answer. Speak to an accountant or a licensed insolvency practitioner first.

What happens if the company cannot repay

Without an asset to sell, an unsecured lender recovers its money through the company and any guarantors. Knowing the sequence is a good reason to borrow carefully.

Arrears and default. A missed payment brings late fees and default interest, and is reported to the credit reference agencies. Most agreements let the lender demand the whole balance once a default is not put right.
Court action and collection. The lender can sue the company for the debt and enforce a judgment against its assets. It can also issue a statutory demand and petition to wind the company up.
The personal guarantee. The lender can claim from guarantors at the same time as, or instead of, pursuing the company, depending on the guarantee’s wording. An unpaid judgment against a director can lead to a charging order over their home or, in the end, personal bankruptcy.
In an insolvency. Unsecured lenders are paid after the insolvency costs, preferential creditors, including some taxes owed to HMRC, and lenders with floating charges. The order of priority means they often recover little, which is exactly why they ask for guarantees.
Directors’ duties. Once a company cannot avoid insolvent liquidation, directors must act to minimise losses to creditors. Continuing to take on new borrowing can lead to personal liability for wrongful trading.

Speak to the lender as soon as you see trouble coming, before a payment is missed. A payment holiday, a temporary switch to interest only or a longer term is easier to agree before a default than after one. Many banks follow the Lending Standards Board’s Standards of Lending Practice for business customers, which cover how they should treat businesses in financial difficulty.

Regulation, protection and tax

Loans to limited companies are generally unregulated. Consumer credit rules protect individuals, not companies, so the loan agreement and guarantee are your main protection. Read both closely, and take legal advice on the guarantee.
Sole traders and small partnerships. A loan of £25,000 or less to a sole trader, a partnership of two or three partners or an unincorporated association can be a regulated credit agreement, with the protections that brings. A loan of more than £25,000 taken wholly or mainly for business purposes is exempt under article 60C of the Regulated Activities Order. The FCA explains consumer credit regulation on its website.
Merchant cash advances are usually structured as a purchase of future card receipts rather than a loan, and generally sit outside consumer credit regulation even for sole traders.
Check who you are dealing with. Use the FCA Register to check whether a lender or broker is authorised, and be wary of anyone who asks for an upfront fee before arranging a loan.
Complaints. Micro-enterprises and many small businesses can take a complaint about a lender to the Financial Ombudsman Service, depending on their size and the activity.
Tax. For a company borrowing for its trade, interest and most fees are usually deductible for corporation tax. The capital repaid is not. Larger groups may be affected by the corporate interest restriction. Check with your accountant.

Alternatives to an unsecured business loan

Alternatives to an unsecured business loan
Alternative	Suits	Compared with an unsecured loan
Secured business loan	Larger sums and longer terms, where the company owns property or assets.	Usually cheaper and bigger, but slower, with an asset at risk. See our guide to borrowing against property.
Asset finance	Equipment, vehicles and machinery.	The asset secures the deal, so it is often cheaper, and it leaves the unsecured borrowing capacity free.
Invoice finance	Cash tied up in invoices to other businesses.	Grows with sales and needs no property, but has service fees and may be visible to customers.
Small business loan	A set sum for stock, a project or a busy season.	May be secured or unsecured, sized to the job.
HMRC Time to Pay	A tax bill the company cannot pay in one go.	An agreed instalment plan with HMRC, with interest, but no new lender and often no guarantee.
Director’s loan or equity	Young companies and growth plans with an uncertain payback.	No lender to satisfy, but the director’s own money or a share of the company is on the line.

Our guide to commercial loans compares every main type of business borrowing on size, term, security and cost.

Where Business Loan Advice fits

We are not a lender and we do not give personal advice. We are preparing a service that will introduce UK limited companies directly to lenders, including for unsecured business loans. No lenders are confirmed yet, so we cannot currently obtain quotes or make introductions. You will not pay us a fee. If a lender pays us commission after the service launches, we will tell you before asking your permission to refer you. The service will not cover personal Start Up Loans, sole traders or partnerships.

In the meantime, the unsecured loan calculator and these guides are free to use with no sign-up. If your limited company is planning to borrow without security, you can register its interest and we will contact you about the service launch. Read how we are paid for the details.

Common questions

What is an unsecured business loan?

A loan to a business with no legal charge over a specific asset such as property or equipment. The company receives a lump sum and repays it in fixed instalments, usually over one to five years. The lender relies on the business’s cash flow and credit record and, for most smaller companies, a personal guarantee from the directors.

How much can I borrow with an unsecured business loan?

Many lenders cap unsecured borrowing at around 20% to 25% of annual turnover, and test the repayments against profits and bank statements. In our example, a company turning over £400,000 with EBITDA of £70,000 could borrow about £100,000. Loans commonly range from £1,000 to £500,000, with a few lenders going higher for strong companies.

What interest rate will I pay on an unsecured business loan?

In October 2026, high-street bank unsecured loans commonly cost about 8% to 15% APR, and online lenders about 15% to 40%, with the strongest firms offered less. The rate depends on trading history, profits, cash flow, credit files, the loan size and any guarantee. Merchant cash advances and short-term facilities can cost much more.

What are the requirements for an unsecured business loan?

Typically a UK registered business with at least six to twelve months of trading for online lenders, or one to two years of filed accounts for a bank. Lenders want steady bank statements, clean company and director credit files, filings and tax up to date, and directors aged 18 or over who are usually willing to give a personal guarantee.

Can I get an unsecured business loan without a personal guarantee?

Sometimes, mostly for larger, profitable companies with several years of accounts. Most lenders to smaller companies ask for one. Some offer a capped guarantee or guarantee insurance instead. A loan without a guarantee is usually smaller or dearer.

Can a new business get an unsecured loan?

It is harder. Most lenders want at least six months of trading in the bank account, and banks usually want filed accounts. Very young companies may be limited to small sums from specialist lenders. Founders can apply for a personal government Start Up Loan of £500 to £25,000 for business use.

How quickly can I get an unsecured business loan?

Online lenders can often decide within a day or two and pay within a week if the paperwork is ready. Banks usually take from a few days to a few weeks. There is no valuation or legal work on an asset, which is why unsecured loans are faster than secured ones.

Can I get an unsecured business loan with bad credit?

Some specialist lenders and cash advance providers lend despite past credit problems, but at higher rates and for smaller amounts. Explain any problem upfront with evidence it is resolved. Paid or satisfied county court judgments read better than outstanding ones.

What happens if I cannot repay an unsecured business loan?

The lender can charge late fees and default interest, demand the full balance, sue the company and, if you signed a personal guarantee, pursue you personally. An unpaid judgment against a guarantor can lead to a charging order on their home. Speak to the lender early, before a payment is missed.

Will an unsecured business loan affect my personal credit?

It can. Lenders usually search the personal credit files of directors, especially guarantors, and a hard search will show on your file. If you guarantee the loan and the company defaults, a claim or judgment against you can affect your personal credit record.

Is a merchant cash advance an unsecured loan?

It is unsecured, but it is not a loan in the usual sense. The provider buys a share of your future card takings for a fixed total, usually set by a factor rate such as 1.2 or 1.3. Payments rise and fall with sales. Because it is often repaid within a year, its equivalent APR can be very high.

Are unsecured business loans regulated?

Loans to limited companies are generally not regulated by consumer credit rules. A loan of £25,000 or less to a sole trader or a small partnership can be regulated. Loans of more than £25,000 taken wholly or mainly for business purposes are exempt. Check that any lender or broker is on the FCA Register.

Is the interest on an unsecured business loan tax deductible?

For a company borrowing for its trade, interest and most fees are usually deductible for corporation tax, though the capital repaid is not. Larger groups may face the corporate interest restriction. Check the treatment with your accountant.

Sources, checked 22 October 2026

Bank of England: Bank Rate, 3.75%

Bank of England: effective interest rates, August 2026

NatWest: small business loan terms, checked 22 October 2026

iwoca: business loans and lending criteria

Centre for Finance, Innovation and Technology: Improving SME Access to Finance, April 2026

GOV.UK: Growth Guarantee Scheme

HM Treasury: Chancellor to unlock billions in finance for small businesses, 13 July 2026

legislation.gov.uk: The Small and Medium Sized Business (Finance Platforms) Regulations 2015

Responsible Finance: find a community development finance provider

R3: the order of priority for creditors in an insolvency

Insolvency Act 1986, section 214: wrongful trading