How can an unsecured business loan help grow your business?

For business owners and directors looking to scale or stabilise their operations without offering up physical assets as collateral, unsecured business loans provide an elegant, rapid solution. Whether you’re managing cash flow, funding expansion, or preparing for a liquidity event, this type of business finance offers flexibility, speed, and discretion.

What is an unsecured business loan?

An unsecured business loan is financing for businesses which is not secured against a single asset – as a mortgage is secured against a property, for example.

What are the benefits of an unsecured business loan?

There are a number of benefits of an unsecured business loan; they can be completed within a week, so for businesses requiring finance quickly, it’s an ideal solution. They also don’t need to be secured against an asset. Often, companies are already highly leveraged against assets to finance business activities, so if they need more funds, an unsecured business loan can be a beneficial option. Also, some companies don’t own their own property or assets and therefore have nothing to secure finance against, this is an option for them. Many people may think that this form of finance would be expensive but, in many cases, it’s cheaper than another short-term finance option they may turn to.

Unsecured business loans are increasingly popular for a number of reasons:

• Speed: Funds can be arranged in as little as five working days.
• No asset tie-in: Ideal for businesses without physical assets or those unwilling to encumber them.
• Flexible structuring: Available for companies with complex or non-standard balance sheets.
• Cost-effective alternatives: Often more competitive than other forms of short-term finance, including merchant cash advances or invoice factoring.

How can a business qualify for one?

To be considered for an unsecured business loan, lenders typically require:

• A minimum of 12–24 months of trading history
• At least one full year of accounts
• Year-to-date management figures and forecasts (if accounts are limited)
• A clean or explainable credit profile

If your business has reported a loss in the last trading year, lenders may still consider your application—particularly if previous years were profitable or the downturn can be reasonably explained (e.g. a one-off investment, supply chain interruption, or expansion costs).

What are the most common reasons for a business to take an unsecured loan?

The most common reasons clients come to Enness requiring unsecured business loans are:

• Working capital
• Refurbishment
• Expansion and growth
• Refinancing an existing loan
• Tax payments
• Asset finance
• Deposit for a commercial mortgage

How Much Can You Borrow?

This will depend on the accounts and credit history of the company. Fully unsecured lending can go as high as £350,000, depending on the quality and prior performance of the business according the lender’s criteria. The average loan size we deal with is around £150,000.

How do lenders insure themselves if the loan is not secured against a particular asset?

A lender will take a company guarantee and personal guarantee from the director/s of the company; this is a signed document agreeing that the loan will be paid back. There is no specific security taken but there is an obligation for the loan to be paid back. The lender will only release the amount they believe a company’s turnover sufficiently covers.

Can you get an unsecured business loan if the business has made a loss in the last year?

Yes, providing a business can show profitable accounts for previous years, or they have a good reason for the short-term losses, they can secure an unsecured business loan.

How can Enness help?

Having a broker on your side who has a long standing relationship with the decision makers at a lender can make the process a lot more fruitful, and can also speed things along. We are trusted by lenders and can work with them to take a holistic view of your business’ circumstances. The way in which your case is presented can be the difference between a yes or no.

Enness is a whole of market brokerage with access to an unrivalled panel of lenders. As such, we are able to find you the best solution for your circumstances, and at the best rates.

Frequently Asked Questions

What is the difference between secured and unsecured business finance?

Secured finance is backed by an asset (e.g., property, equipment), while unsecured loans rely on trading history and guarantees. The latter provides speed and flexibility but may come with slightly higher rates.

Can I get an unsecured business loan with no personal guarantee?

Loans with no personal guarantee are rare and typically limited to companies with exceptional financial strength. Most lenders will require at least one director’s guarantee.

Are unsecured business loans available to startups?

Startups with less than 12 months’ trading history may find it harder to qualify. However, lenders will sometimes consider strong business plans or secured forward revenue (e.g. contracts or retained clients).