Unsecured Finance Guide

Unsecured Business Loans UK 2025: Complete Guide

Borrow £1k-£500k without property or assets as security. Unsecured business loans explained with rates, lenders, and approval tips for your business growth.

£1k-£500k

Funding range

6-35%

APR range

48hrs-2wks

Approval speed

No PG

Under £50k

What is an Unsecured Business Loan?

An unsecured business loan requires no property, equipment, or assets as security. You borrow based on:

Business trading history and cash flow

Personal credit score

Business financial statements

Personal guarantee from directors

£18.5 billion in unsecured UK business lending in 2024 (British Business Bank)

Unsecured vs Secured Loans

Feature	Unsecured	Secured
Security Required
Typical Amount	£1k-£500k	£10k-£5m
Interest Rate	6-35% APR	4-12% APR
Approval Speed	48 hours - 2 weeks	2-6 weeks
Risk to Assets		Property at risk

Top Unsecured Lenders UK (2025)

iwoca

Fastest Approval

FASTEST

Amount:

£1,000-£200,000

APR:

6-20% APR (risk-based)

Approval:

48-72 hours

Term:

3-36 months

Requirements:

6+ months trading, £10k+ monthly revenue

Funding Circle

Best Rates

Amount:

£10,000-£500,000

APR:

6-18%

Approval:

1-2 weeks

Term:

12-60 months

Requirements:

2+ years trading, profitable

Capitalise

Best for Bad Credit

Amount:

£3,000-£500,000

APR:

8-30%

Approval:

48 hours

Requirements:

6+ months trading, considers poor credit

Fleximize

Best for SMEs

Amount:

£10,000-£500,000

APR:

8-22%

Approval:

3-7 days

Requirements:

12+ months trading

Requirements & Eligibility

Typical requirements for £50,000 unsecured loan:

12-24 months trading history

£15,000+ monthly revenue

Credit score 600+ (some accept 550+)

No CCJs in last 12 months

Profitable or break-even

UK registered business

Director personal guarantee

Cost Example: £25,000 Over 2 Years

Good credit (700+)

APR:

8% APR

Monthly:

£1,096/month

Interest:

£1,304 interest

Fair credit (600-699)

APR:

15% APR

Monthly:

£1,209/month

Interest:

£3,996 interest

Poor credit (550-599)

APR:

25% APR

Monthly:

£1,340/month

Interest:

£7,160 interest

Credit score impact: Good vs poor credit = £5,856 difference on same loan.

Advantages & Disadvantages

Advantages

No property risk: Your home/premises are not at stake

Faster approval: No property valuation needed (saves 2-4 weeks)

Flexible use: Any business purpose

Smaller amounts accessible: Can borrow £1,000-£5,000 (secured loans typically £10k minimum)

Disadvantages

Higher interest: 3-10% more than secured loans

Lower amounts: Maximum usually £250k-£500k vs £5m+ secured

Personal guarantee required: Directors personally liable

Stricter criteria: Need good trading history and credit

When to Choose Unsecured

Best situations:

You do not own property to secure against

Need under £100,000

Want fast approval (48 hours - 2 weeks vs 4-8 weeks secured)

Do not want to risk personal assets

Have strong business cash flow and credit score

Conclusion

Unsecured business loans offer £1k-£500k without property security. Rates are 3-10% higher than secured loans, but approval is faster and your assets are not at risk.

Best for: Businesses with good credit, strong cash flow, and no property to secure against. Ideal for amounts under £100k where speed matters for your business growth.

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Frequently Asked Questions

What is an unsecured business loan?

An unsecured business loan requires no property, equipment, or assets as security. You borrow based on: Business trading history and cash flow, personal credit score, business financial statements, personal guarantee from directors. £18.5 billion in unsecured UK business lending in 2024 (British Business Bank).

What are the advantages of unsecured loans?

Advantages: No property risk (your home/premises are not at stake), faster approval (no property valuation needed, saves 2-4 weeks), flexible use (any business purpose), smaller amounts accessible (can borrow £1,000-£5,000, secured loans typically £10k minimum).

What are typical requirements for unsecured loans?

Typical requirements for £50,000 unsecured loan: 12-24 months trading history, £15,000+ monthly revenue, credit score 600+ (some accept 550+), no CCJs in last 12 months, profitable or break-even, UK registered business, director personal guarantee.