Unsecured Business Loans in UK

If you are dreaming about starting your own business or develop the present one, but do not have enough money to realize your brave ideas, you may borrow money in a bank.

Unfortunately, it is not always easy to persuade bank workers that you really deserve it and will responsibly pay it off in time.

That is why unsecured business loans in UK are quite widespread, especially among those clients, whose applications have once been declined.

Reasons to Consider Unsecured Business Loans

Secured loans are more traditional and less risky for lenders, so the interest rates are lower.

However, there are some advantages, which make unsecured loans attractive.

  • When getting a secured loan, it is necessary to provide a collateral, which serves the guarantee for the lender and might be confiscated in case of bankruptcy. Thus, the first reason to get an unsecured loan is absence of valuable property or unwillingness to take risk.
  • This type of business loans is easy to apply for as you do not have to deal with loads of paperwork. It is more and more popular in UK to apply online, though you can go to a bank as well.
  • Unsecured loans are a life-line for appliers with bad credit history. It is nearly impossible for them to get a usual loan, while getting an unsecured one might both enable to obtain finance and improve their credit history.
  • Unsecured startup loans are highly demanded as well, because you won’t need to work on business plans and other related documents for ages to prove that your new business will not go bankrupt.

Unsecured Business Loans in UK

Where to Get Unsecured Business Loans

There are several types of companies providing loans without securing.

They are the following:

  1. Government – a state bank offers business loans without security. There are competitive rates, but a long application process.
  2. Banks – they thoroughly check the borrowing company as a rule. It is a time-consuming process, but this type of lenders is definitely reliable.
  3. Peer-to-peer lenders – they are companies which connect those who want to borrow with investors. You can get a loan with an even lower interest rate than in a bank, but it is usually necessary to pay an arrangement fee. Also you need to catch the interest of a lender and make him sure he won’t lose his money anyway.
  4. Specialist business lenders – it is the simplest way to obtain a business loan. However, the rates are higher than with other unsecured loan providers.

Unsecured Business Loans from Banks:

Halifax Bank

TSB Bank

Santander Bank

HSBC Bank

Unsecured business loans in UK vary in terms of amount and term. You might borrow from £1,000 up to £200,000 (in some cases even as much as £1,000,000).

The term of repayment is from one month to several years. The common interest rate is about 5-7%.

As soon as you start looking for an unsecured loan for your business, consider all the variants and choose the most beneficial one, taking into account all the interest rates, fees and terms.

1 COMMENT

  1. Peter

    Unsecured business loans seemed more attractive for me, as they presupposed less paper work, no collateral and other related issues. The interest rate I got was 5%, while I could choose the term on my own. Generally, I got $20,000 for 5 years. Definitely, it was a beneficial experience, which does not take much time and effort.

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