Unsecured business loans
Compare Unsecured
Business Loans
No Asset Security Needed
What we do
Compare Advantage is a free comparison service. Tell us how much you need, and our partner, FCA-authorised broker Halo Corporate Finance, checks your enquiry against the 130+ lenders on its panel, including the unsecured specialists, so you only apply where there is a real fit.
- No property or business asset put up as security
- For stock, staff, marketing, tax bills and growth
- One enquiry checked against 130+ lenders
Prefer to talk? Call 0330 057 7175
- 130+ lendersOn our partner’s panel
- £5k to £1mLoans and asset finance
- One enquiryInstead of one per lender
- FCA-authorised partnerHalo Corporate Finance
- Free to enquireNo obligation to apply
Compare before you apply
Compare unsecured loans on the total you repay
Unsecured lending is where offers are hardest to compare. One lender quotes an interest rate, another a factor rate; one takes monthly repayments, another a slice of every card payment; one wants a capped guarantee, another an unlimited one. The monthly figure on its own tells you very little. Lining the offers up on the same amount and term, and on the guarantee you would sign, is how you see which one actually costs less.
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Tell us once
Two minutes on the form: how much, what it is for and a few details about the business.
- 2
The panel is checked
Halo Corporate Finance matches your enquiry against the 130+ lenders on its panel.
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You choose
Halo talks you through the options that fit. You decide whether to apply. There is no obligation.
What to compare
- How the cost is quoted. Some lenders use an interest rate, others a fixed factor rate. Convert both to the total amount you repay before you compare.
- The personal guarantee, who has to sign it, whether it is capped, and whether it covers only this loan or all the company’s debts with that lender.
- The repayment pattern. Monthly, weekly or daily repayments, or a share of takings, each affect cashflow differently.
- Early settlement terms. With a factor rate you may owe the full cost even if you repay early. With interest you usually save. Ask before you sign.
- Any arrangement or broker fee, whether it is added to the loan or taken from the amount paid out.
The short answer
What does “unsecured” actually mean?
An unsecured business loan is not tied to a particular asset. The lender does not take a charge over your premises, vehicles or equipment, and cannot repossess them to recover the debt.
That makes it quicker to arrange and keeps your assets free for other borrowing. But “unsecured” does not mean risk-free for the owners. Most lenders to limited companies ask the directors for a personal guarantee, which is explained in full below.
If the money is for a vehicle or machine, asset finance is often cheaper. If you are not sure which you need, start with small business loans.
Side by side
Unsecured vs secured business loans
| Feature | Unsecured | Secured |
|---|---|---|
| What backs the loan | Usually a personal guarantee from the directors | A charge over property or business assets |
| Typical amounts | Smaller, often a share of annual turnover | Larger, linked to the value of the security |
| Typical terms | Shorter, often up to five years | Longer, sometimes much longer |
| Speed | Often faster, with no valuation needed | Slower, because of valuations and legal work |
| Cost | Usually higher, because the lender takes more risk | Usually lower, because the lender has security |
| If you cannot repay | The lender can pursue the guarantor | The lender can enforce its security |
Read this before you sign
Personal guarantees, explained
The guarantee is often the most important part of an unsecured loan, and the part people read least. Six things to understand.
- 1
What it is
A promise by a director, or another person, to repay the company’s debt if the company cannot. It turns a company debt into a personal one for the guarantor.
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Why lenders ask
A limited company protects its owners from its debts. On an unsecured loan, the guarantee is often the only thing that gives the lender a way to recover money if the business fails.
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Capped or uncapped
A capped guarantee limits what you can owe to a set amount. An uncapped one can cover the full balance, plus interest and costs. Ask for a cap where you can.
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Specific or all monies
A specific guarantee covers one loan. An all-monies guarantee covers everything the company owes that lender, now and in future. Know which you are signing.
- 5
Joint and several
Where several directors sign, the lender can usually claim the full amount from any one of them, not just a share from each.
- 6
Take advice
Lenders often recommend independent legal advice before you sign a guarantee. It is worth taking, especially if your home or savings could be at risk.
Reading an offer
Interest rate or factor rate?
Many short-term unsecured lenders quote a factor rate. It looks small, but it works differently from interest, and the difference matters most when the term is short or you want to repay early.
Interest rate
Charged on the balance you still owe. As you repay, the interest falls. Repay early and you usually pay less interest overall, subject to any early repayment charge.
Factor rate
A fixed cost set at the start. Borrow £20,000 at a factor rate of 1.15 and you repay £23,000, whether the term is six months or eighteen. Repaying early may not reduce the total. Always ask.
What it’s used for
What businesses use unsecured loans for
Working capital
Cover wages and suppliers while you wait to be paid, or through a slow season.
Growth
Fund marketing, a new hire or a new product line before the income arrives.
Refits and premises
Refurbish a shop, café or office without tying up property as security.
Tax bills
Pay VAT or corporation tax on time and spread the cost. See VAT and tax bill loans.
Refinancing
Replace expensive short-term borrowing with one loan on clearer terms.
Opportunities
Buy discounted stock, win a contract that needs up-front spend, or take over a competitor’s customers.
Without security, lenders look harder at
Your bank statements tell the story
With no asset to fall back on, an unsecured lender’s decision rests on whether the business can comfortably afford the repayments. Recent bank statements, often read through open banking with your permission, carry a lot of weight.
They look for steady money coming in, balances that do not regularly dip into an unarranged overdraft, no returned payments, and room left over after existing loans, leases and tax.
Check the panel- Regular, predictable income into the business account
- Average balances and how often the account goes overdrawn
- Existing loan, lease and HMRC payment plan repayments
- Any returned or bounced payments
- Trading history, usually at least a year for most lenders
- The business and directors’ credit files
What is an unsecured business loan?
A loan to a business where no specific property or asset is pledged as security. The lender decides mainly on the business’s trading, affordability and credit history. For limited companies, the directors are usually asked for a personal guarantee.
Is an unsecured business loan really unsecured?
It is unsecured against assets, but it is rarely without any backing. Most lenders to limited companies ask for a personal guarantee from the directors, which means they can be personally liable if the company cannot repay.
Can I get an unsecured business loan without a personal guarantee?
Sometimes, usually for well-established businesses with strong accounts, or for smaller amounts. Fewer lenders offer it, so expect a narrower choice. Say in your enquiry if a guarantee is a problem and Halo can look for lenders who may not need one.
How much can I borrow unsecured?
Many unsecured lenders limit the loan to a proportion of annual turnover, and look closely at how much the business already repays each month. Strong, consistent bank statements and profits support a larger amount.
What is a factor rate?
A fixed multiplier used by some short-term lenders instead of interest. A factor rate of 1.2 on £10,000 means you repay £12,000 in total. Because the cost is fixed, repaying early may not save you anything, and over a short term it can be expensive.
How quickly can I get an unsecured business loan?
Unsecured loans are often quicker than secured ones because there is no valuation or legal charge. Some lenders use open banking to read your bank statements and can decide within days once they have what they need.
Can a sole trader get an unsecured business loan?
Yes. A sole trader borrows personally, so there is no separate guarantee: you are already liable. Loans of £25,000 or less to a sole trader are generally regulated under the Consumer Credit Act, and Halo handles those directly.
Can I get an unsecured loan with bad credit?
Some specialist lenders consider businesses with past credit problems if recent trading is strong. Expect lower limits or higher costs. Being upfront about any County Court Judgments in your enquiry saves time.
Is unsecured or secured borrowing cheaper?
Secured borrowing is usually cheaper, because the lender can recover its money from the security. Unsecured borrowing costs more but is quicker and does not put your property or assets at direct risk.
What happens if the business cannot repay?
Talk to the lender early. Many will agree a temporary plan. If the debt is not repaid, the lender can take legal action against the company and, under a personal guarantee, against the guarantors. Free debt advice is available from Business Debtline.
Sources
- Business Debtline: free advice for businesses in debt
- FCA Handbook: CONC, regulated credit agreements and business lending
- British Business Bank: Business finance guide
- FCA register: Halo Corporate Finance Ltd (FRN 726655)
Written by the Compare Advantage team, Chorley. Facts checked against the sources above on 4 November 2026. This page is general information, not financial advice.
Compare Advantage Ltd (FRN 1028452, company no. 14289362) is an Introducer Appointed Representative of Halo Corporate Finance Ltd (FRN 726655). We introduce business finance enquiries to Halo. We are not a lender and do not give financial advice. If you take out finance, the lender may pay commission to Halo Corporate Finance, and Halo may pay us a fee for the introduction. Finance is subject to status and is available to UK businesses only.