Unsecured business loans

Unsecured Business Loans – A Quick, Easy Way to Fund Business Requirements

Business loans offer a great way of handling business expenses of every kind. It goes without saying that every business move – from expansion of operations to seizing market opportunities – requires you to shell out money. At times, your business may not be in the most ideal position to do so. Or, in other cases, it may simply be more attractive to borrow at a low interest rate and repay over a fixed term.

In such cases, an unsecured business loan may well be the financing tool your business needs.

What is an Unsecured Business Loan?

An unsecured business loan is a loan taken by a business solely on the basis of business potential or credit health, as determined by the lender. As the name suggests, an unsecured business loan does not require the borrower to present any security as collateral.

Example

A small bookstore requires urgent financing to pay for the purchase of inventory as well as to carry out minor refurbishments. The business owner estimates the overall cost of this move to be around £12,000. While it is possible for the business to set aside this sum of money and pay for the costs upfront, the owner feels it more reasonable to borrow the money. Good credit history allows the business to quickly arrange for the funds, in the form of an unsecured business loan. Termed over 24 months, this loan helps the business keep on top of the planned purchases, while also avoiding a lump-sum damage to the cashflow.

Features of an Unsecured Business Loan

Some of the common, defining features of unsecured business loans are discussed below:

Smaller Amounts

The most prominent factor that defines every unsecured business loan is the loan amount that lies on the smaller side. A typical unsecured business loan can help you access additional funding up to around £50,000, dependant on the circumstances.

Faster Processing

As unsecured business loans do not involve the valuation of properties or assets, they can be processed swiftly. In fact, a business possessing a favourable credit score can see the funds land in their accounts within 3-5 business days. This is an important factor to consider if you wish to take a business loan to look after imminent, unavoidable business expenses.

Flexibility of Repayment

Unlike mortgages or long-term secured business loan, an unsecured business loan is much more flexible. Typically, such a business loan can be termed over 6 months to 5 years. This allows the borrower enough time to arrange for the repayment. Most lenders also offer a fixed, monthly repayment option to ease the burden of repayment.

Interest Rates

This is the cost that comes with not attaching a security to the credit. As unsecured business loans expose the lender to an inherently greater risk, they usually carry relatively higher interest rates. The interest rate on such loans tends to decrease as the loan tenure widens.

Credit Score Dependency

Most lenders assess unsecured business loan applications based on the credit history of the business. For a business that has been trading for over two years with a healthy credit score, getting an unsecured business loan is usually not difficult.

An Ideal Unsecured Business Loan for Your Business – Decision Within 24 Hours

With all the features that unsecured business loans carry, there are some distinct shortfalls. The most prominent hurdle businesses face while getting an unsecured business loan is finding the right lender. Only a small fraction of licensed lenders specialises in dealing with unsecured business loans. But there’s an easier way to go about this. Trust Commercial Finance Network – an industry-leading whole of market broker in the UK – to find just the right lender for you!

Get in touch with us today to discuss your requirements with one of our Business Loan Experts.