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Unsecured business loans

What is an Unsecured Business Loan?

An unsecured business loan is a method of raising funds without using any personal or business assets as collateral. These loans are available to many company structures (Limited companies, Sole Traders, Partnerships, LLPs and so on) provided the borrower has a visible financial history and good credit rating. It stands to reason that these loans are quite “risky” for the unsecured loan lender, given there is no security taken, which can be reflected in the rate of interest charged.

As the loan is unsecured the lenders money will be at risk and likely to be unrecoverable, should the borrower fail to repay. The lender would therefore perform the necessary due diligence to make themselves comfortable.

Unsecured Loan Lenders include High Street Banks, Specialist Finance Houses and Peer 2 Peer lending platforms.

The unsecured business loan lender will need to see company financials including accounts and  cash-flows showing the payments can be afforded during the period of the loan. Unsecured Business Loans are usually on a “Capital and Interest” basis, and over a shorter period than a secured mortgage might be.

What are Unsecured Business Loans used for?

They can be used for any business purpose, and to help your business grow and improve cash flow. A quick & easy application process means these loans are often easier to access, than a more conventional loan.

Business loans can be used for stock purchase, asset purchase, cash-flow, debt consolidation, property purchase and almost any other business purpose. The application process is extremely simple, and funds are typically available within 2 weeks of application.

Other examples of what a secured business loan could be used for are:

Improve Cash Flow – helps the business cope with seasonality

Help Grow your business – do you need more stock? Bigger premises?

Refurbish Premises – Give your business a new look and boost sales

Cover one-off scots – Do you have a Tax Bill to pay?

More staff – Employee people to cope with demand

New Equipment – busy assets with an unsecured business loan

What are the Key Features of Unsecured business loans?

Interest rates from 1.9% per annum.

Unsecured Loans are from £25k to £500k (note that PG’s may be required)

Note that loans from £501k to £2m are available, with security (2nd charges are acceptable)

Loan terms from 6 months to 5 years.

No upfront application fees or Early Repayment Charges.

What are the Unsecured Business Loanslending criteria?

Sole Traders, Partnerships, Limited Companies and Limited Liability Partnerships can apply.

Minimum business turnover of £100k per annum

2 years filed accounts must be available.

All directors must be UK based, with clean credit

No CCJ’s above £250 allowed.

Directors’ guarantees may be requested.

What Information do you need to progress an Unsecured business loans loan?

Company Name and type (LTD, LLP, Sole Trader, Partnership)

Directors Names, Addresses (Last 3 Years) and Date of Birth

Last 2 Years Accounts

Company website address

Explanation for the Use of Funds

FAQs

What is an unsecured business loan?

A loan to a business without the requirement for a property or asset to be charged to the lender as security.

Who can get an unsecured business loan?

Most trading businesses can apply for an unsecured loan. Some business types which lenders avoid though are those connected to firearms, alcohol and religious activities.

Can I borrow in a limited company?

Yes, in fact most of our unsecured loan applications are done via Limited Companies, however, sole traders and partnership applications are also welcomed.

What rates should I expect to pay?

Rates vary depending on individual circumstances and the strength of the business borrowing the money, the amount borrowed and term of the loan. Many lenders will view an unsecured loan as more risky than a secured loan and the rates will often reflect this, however rates as low as 1.9% are available

How long can I have an unsecured business loan?

Typically up to 10 years

How Fast is an unsecured business loan application?

7 to 14 days is the usual turnaround time for a business loan in the UK

Can I repay early? Are there any repayment penalties?

An unsecured facility can be repaid at any time – usually without penalties

What is the next Stage to apply for a business loan?

Call Positive Commercial Finance now!

Where will the loan money be paid to?

The loan will be paid into the business account where the monthly payments are taken from.

 Does the money need to be for business purposes?

Yes. The funds can be used for any legal business purpose.

If you want a fast, flexible and reliable service, try
Positive Commercial Finance.

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