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Unsecured business loans

An unsecured business loan is not secured on a specific asset. That makes it faster and simpler than a secured loan, but it rarely means nobody is on the hook.

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Unsecured, but usually guaranteed

“Unsecured” means the lender takes no charge over a particular asset such as a property or a vehicle. It does not mean the lender has no recourse. Most unsecured business lenders ask one or more directors for a personal guarantee, a promise to repay from their own resources if the business cannot. Some also take a debenture, a general charge over the company’s assets, while still calling the loan unsecured because no single asset is pledged. Read the security section of any offer carefully.

How it compares with a secured loan

Unsecured loanSecured loan
SecurityNo specific asset; a personal guarantee is commonA charge over property or other assets
SpeedOften days, sometimes hoursUsually weeks, because of valuation and legal work
SizeGenerally smaller, sized to cash flowCan be larger, sized to the asset’s value too
PriceGenerally higher, because the lender carries more riskGenerally lower
Extra costsArrangement feeArrangement fee plus valuation and legal fees

General characteristics of the two structures, not any lender’s terms.

Who it suits

An unsecured loan suits a trading business with steady income that needs a moderate sum quickly and has no property to offer, or would rather not tie a property to the debt. It is less suitable for very large amounts, or where the cheapest possible rate matters more than speed.

What to check before you sign

  • Exactly what the personal guarantee covers, whether it is capped, and whether it is joint and several between directors (each director liable for the whole debt).
  • Whether a debenture is taken as well.
  • The total repayable, including any fee added to the loan.
  • Early repayment terms. Several alternative lenders publish that they charge nothing to settle early; check the offer says the same.

Sourced comparison

Funding Circle

Alternative lender

Source: fundingcircle.comchecked 2026-09-26

Amount
£10,000 to £750,000
Term
up to 6 years
Rate
from 6.9%a floor, not typical
Speed
Decision in as little as 5 minutes; funds typically within 48 hours.
Fees, security and eligibility
Fees
No fee to settle early. A completion fee applies and is added to the loan.
Security
Unsecured
Eligibility
2+ years trading generally expected; latest accounts and bank statements requested.
Speed in full
Decision in as little as 5 minutes; funds typically within 48 hours.
About the rate
Rates from 6.9% per year is a floor for the strongest applicants, not a typical rate.

iwoca

Alternative lender

Source: iwoca.co.ukchecked 2026-09-26

Amount
£1,000 to £1,000,000
Term
1 day to 5 years
Rate
Priced per quote
Speed
Often a decision in hours.
Fees, security and eligibility
Fees
No fee for repaying early. A director's personal guarantee is required.
Security
Unsecured
Eligibility
Limited company or LLP, UK-based. Businesses trading under a year are capped at £10,000.
About the rate
iwoca does not publish a single representative APR on its Flexi-Loan page; it prices each facility individually, so a quote is the only real figure.

Start Up Loans (British Business Bank)

Government-backed

Source: startuploans.co.ukchecked 2026-10-13

Amount
Up to £25,000
Term
1 to 5 years
Rate
7.5% APRrepresentative
Speed
Weeks rather than days: it is an assessed government scheme, not instant lending.
Fees, security and eligibility
Fees
No application fee and no early repayment fee. Includes free mentoring.
Security
Unsecured
Eligibility
For businesses trading under 3 years (or pre-start). One loan per person, up to £25,000 each, subject to affordability.
Speed in full
Weeks rather than days: it is an assessed government scheme, not instant lending.
About the rate
A fixed 7.5% per year, the same for everyone, which is unusual: most business lending is priced on risk. The trade-off is the £25,000 cap and the assessment.

Barclays

High-street bank

Source: barclays.co.ukchecked 2026-10-13

Amount
£1,000 to £25,000
Term
Terms between one and 10 years
Rate
11.2% APR representative overall (£1,000 to £25,000)
Speed
Money usually within 48 hours of signing the paperwork; existing customers may get an immediate decision.
Fees, security and eligibility
Fees
No arrangement fees. No fees for repaying your loan early.
Security
Unsecured
Eligibility
Apply in Online Banking or the app if you already have a Barclays business account. Loans aren't available for all industries; subject to lending assessment, status and application. Amounts above £100,000 need a secured business loan.
Speed in full
Money usually within 48 hours of signing the paperwork; existing customers may get an immediate decision.
Rate in full
11.2% APR representative overall (£1,000 to £25,000). By amount: 14.9% up to £5,000; 11.2% £5,001 to £15,000; 8.5% £15,001 to £25,000

Lloyds Bank

High-street bank

Source: lloydsbank.comchecked 2026-10-13

Amount
£1,000 to £50,000
Term
Starting from one year; between 1 and 10 years when you apply online
Rate
11.2% APRrepresentative
Speed
The money could be in your account in 48 hours once the application is accepted.
Fees, security and eligibility
Fees
No arrangement fees or early repayment fees.
Security
Unsecured
Eligibility
Representative APR applies to unsecured loans for businesses with a turnover of up to £25 million. Must be at least 18, borrow at least £1,000, need the money for business purposes, and be a sole trader, partner or director authorised to borrow for the business.
Speed in full
The money could be in your account in 48 hours once the application is accepted.

HSBC UK

High-street bank

Source: business.hsbc.ukchecked 2026-10-13

Amount
£1,000 to £25,000
Term
Repayment terms of between 12 months and 10 years
Rate
11.3% Representative APR for loans up to and including £10,000
Speed
Speed not published.
Fees, security and eligibility
Fees
No arrangement fee. No charges for additional repayments. Early repayment: may be entitled to an interest rebate, but one month and 28 days' interest is deducted from the rebate. If security is required, an administration fee is payable.
Security
Either (security may be required)
Eligibility
No requirement to open or maintain an HSBC Business Current Account unless a debenture or fixed charge over book and other debts is required. Security may be required, each case considered on its merits.
Rate in full
11.3% Representative APR for loans up to and including £10,000. 8.6% Representative APR for loans over £10,000.

NatWest

High-street bank

Source: natwest.comchecked 2026-10-13

Amount
£1,000 to £100,000
Term
Loan terms from 1 to 7 years
Rate
12.57% APRrepresentative
Speed
Apply in about 10 minutes; if approved, you could have the money within 24 hours.
Fees, security and eligibility
Fees
You won't pay set-up fees and early repayment or early closure fees.
Security
Unsecured
Eligibility
Aged 18 or over; a director of the business you're applying for; not declared bankrupt and no CCJ or Court Decree; hold a Business Current Account with any provider. May need to open a fee-free Loan Servicing Account. Over £50,000 and up to £100,000 is a separate online application.
Speed in full
Apply in about 10 minutes; if approved, you could have the money within 24 hours.
About the rate
NatWest's own example: a fixed 11.90% interest rate, £508.17 a month, £11,179.77 repaid in total. It says other amounts are available at alternative rates

Santander UK

High-street bank

Source: santander.co.ukchecked 2026-10-13

Amount
£1,000 to £50,000
Term
Repay over 1 to 7 years
Rate
11.2% APRrepresentative
Speed
After signed documents are checked, funds can take up to 3 working days to arrive.
Fees, security and eligibility
Fees
Overpay at no extra cost. Early settlement figure includes interest up to the repayment day (28 days assumed) and 'any charges that will apply'. No arrangement fee is published.
Security
Unsecured
Eligibility
Sole trader, partnership or private limited company with no more than 2 partners or directors who own the business entirely; all aged 18+ and UK residents; good credit history, not bankrupt, no IVA in the last 6 years. A personal guarantee may be required for limited companies and LLPs. Funds go to the business current account.
Speed in full
After signed documents are checked, funds can take up to 3 working days to arrive.

Metro Bank

High-street bank

Source: metrobankonline.co.ukchecked 2026-10-13

Amount
£2,000 to £60,000
Term
1-5 years
Rate
Typically 9.6% APR fixedpublished as “typically”, not as a representative APR
Speed
Speed not published.
Fees, security and eligibility
Fees
Arrangement fees: Zero. Other fees we may charge: None.
Security
Either (security may be required)
Eligibility
Must have a Metro Bank Business Bank Account; security likely needed. Generally for businesses with £2 million turnover and under (exceptions considered). Apply in store.

How to read the rate column. A representative APR is the rate at least 51% of accepted borrowers get, not a rate you are promised. “From” figures are a floor for the strongest applicants. “Priced per quote” means the lender does not publish a single rate and assesses each business. The only figure that binds is a lender's own quote for your business.

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Frequently asked questions

Does an unsecured business loan need a personal guarantee?

Usually, yes. Most UK lenders of unsecured business loans to limited companies ask at least one director for a personal guarantee. A few lend without one, generally to larger, well-established businesses.

Is an unsecured business loan more expensive?

Generally, because the lender has no specific asset to fall back on. The actual rate depends on your business; compare the total repayable on real offers.

How quickly can I get an unsecured business loan?

Alternative lenders that decide from bank data can approve in hours and pay out within days. Banks are usually slower. Published speeds are shown in the table.

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