Reviewed 30 September 2026. General information, not advice.
What is an unsecured business loan?
An unsecured business loan provides a lump sum that you repay, usually in regular instalments over an agreed term. The lender does not take a specific business asset as security for the loan. The lender will still assess the business and, in many cases, the people behind it.
It can cover stock, recruitment, marketing or other business spending. Whether borrowing is suitable depends on what it will achieve, how reliably the business can make repayments and the total cost.
A personal guarantee changes the picture
Some lenders ask directors or business owners for a personal guarantee. This is a commitment to repay if the business cannot. It can expose personal finances even when the business is a limited company.
Ask whether a guarantee is required, whether it is limited, what it covers and when the lender can enforce it. Read the wording and consider independent legal advice before signing.
What affects eligibility and price?
Lenders can consider trading history, turnover, cash flow, existing borrowing and credit history. Requirements vary. A rate shown in an advert may only be available to some applicants.
Compare the same amount and term, including arrangement fees, broker fees and any early repayment charges. Ask for the repayment schedule and total amount repayable in pounds.
Before you apply
Prepare recent bank statements, accounts or management figures, details of existing debts and a clear explanation of how the money will be used. Check that the repayment still fits in a quieter month.
An application may involve a credit search. Ask whether it is a soft or hard search, whose record it affects, and at what stage it happens.
A few common questions
Does unsecured mean no personal guarantee?
No. The loan may have no specific asset security but still require a personal guarantee. Check both the business terms and your personal obligations.
Can a new business get an unsecured loan?
Some products require an established trading history. Younger businesses can explore specialist start-up funding, but availability and criteria vary.
British Business Bank: finance options for smaller businesses
Eligibility and product terms change. Confirm the current details with the provider before making a decision.