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Unsecured business loans

What is an unsecured business loan?

An unsecured business loan is borrowing that is not secured against a specific asset such as property or equipment. That does not make it risk-free for the directors: the large majority of UK unsecured business lending still requires a personal guarantee, so a director can remain personally liable even though no named asset is charged. Because the lender has no asset to fall back on, unsecured lending is priced higher than secured borrowing of the same size and is usually smaller and shorter.

Updated . Lendus is an introducer, not a lender.

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How it works

  1. 01 You apply with recent bank statements, filed accounts where they exist, and details of what the money is for.
  2. 02 The lender assesses affordability from trading income, increasingly by reading live bank data through Open Banking rather than waiting on accounts.
  3. 03 A personal guarantee is usually requested from one or more directors.
  4. 04 Funds are drawn as a lump sum and repaid in fixed monthly instalments over the agreed term.

What lenders typically look for

What to watch for

Unsecured does not mean no personal risk. Read the personal guarantee before signing, and check whether its scope is capped at the loan amount or is unlimited. Ask for the total amount repayable rather than the headline rate, because arrangement fees are often excluded from a quoted rate.

Lenders on our panel

Lender Facility size Published rate Minimum trading
Aldermore Bank £2k–£10m 4.5%–20% 12+ months for most products
Allica Bank £25k–£15m 9.90%–13.75% 3+ years of filed accounts for unsecured business loans; 2+ years of financial accounts for commercial mortgages
Bibby Financial Services £50k–£15m 1%–3% 6+ months preferred; startups with strong order books considered
Bizcap £10k–£500k 1.5%–5% At least 4 months
Capify £4k–£500k 1.1–1.5 4+ months for merchant cash advance; 6+ months for business loan
Capital on Tap £1k–£250k 1.25%–3% 12+ months
Close Brothers £10k–£5m 5%–18% 24+ months
Cynergy Business Finance £200k–£40m Not published Not publicly stated by Cynergy Business Finance. Eligibility appears to be assessed on the strength of the underlying receivables, stock, property or other assets on a per-business basis rather than against a published minimum years-trading threshold.
Fleximize £5k–£500k 0.9%–3.9% 6+ months
Funding Circle £10k–£500k 6.9%–36% 1+ year
Investec £5k–£100m Not published Not publicly stated. Investec assesses each business individually rather than publishing a minimum trading history requirement.
iwoca £1k–£500k 2%–6% 3+ months
Kriya £50k–£1m Not published Minimum 12 months trading with at least one set of financial accounts filed for invoice finance and working capital loans. Kriya's PayLater product has a lower minimum of 3 months trading.
LendingCrowd £25k–£500k 6%–18% 24+ months
Nucleus Commercial Finance £3k–£2m 1.5%–5% 6+ months
OakNorth Bank Not published Not published No fixed minimum published; trading history is one of several factors assessed case-by-case
Paragon Bank £5k–£1m Not published Not publicly stated; assessed as part of underwriting.
Shawbrook Bank £50k–£25m 0.55%–1.25% 12+ months preferred; none required for property-backed bridging
Start Up Loans £1k–£25k 7.5%–7.5% For start-ups: no trading history required. For existing businesses: must have been trading less than 60 months
ThinCats £1m–£30m Not published Not stated as a fixed minimum number of years; ThinCats lends to established mid-sized SMEs rather than start-ups or very early-stage businesses.
Tide £1k–£500k 7.9%–49.9% 12+ months for credit products; account available from day one
White Oak UK £5k–£500k Not published Not publicly stated; assessed as part of underwriting.

As published by each lender and dated on its own page. Indicative, not offers.

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Frequently asked questions

Do I need a personal guarantee for an unsecured business loan?
In most cases yes. Although no specific business asset is charged, the majority of UK unsecured lenders ask directors to sign a personal guarantee as a condition of approval. That makes the director personally liable for the outstanding balance if the company cannot repay. A small number of lenders waive it for very small facilities or exceptionally strong applicants, but that is the exception. Where a guarantee is required, it is worth asking whether its liability can be capped at the loan value rather than left open.
How much can I borrow unsecured?
Lenders generally size an unsecured facility against turnover rather than applying a flat cap, commonly lending a multiple of monthly revenue. Across the lenders on our panel, unsecured facilities run from a few thousand pounds up to around one million for strong, established businesses. The binding constraint is almost always affordability, meaning whether repayments can be met comfortably from trading income, rather than any published maximum.
Is an unsecured loan more expensive than a secured one?
Yes, and materially so. The lender has no asset to recover against, so the risk is priced into the rate. Secured business lending in the UK typically runs considerably cheaper than unsecured borrowing of the same size and term. The trade-off is speed and simplicity: secured lending needs a valuation and legal work and takes weeks, while unsecured decisions are often made in hours or days.
How quickly can I get an unsecured business loan?
Faster than any other form of business borrowing. Lenders using automated underwriting and Open Banking can decide within hours and release funds within one to two working days. Lenders that combine automated scoring with manual review, particularly for larger amounts, typically take one to three working days. Speed is the main reason businesses accept unsecured pricing over a cheaper secured facility.
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