Business finance

Unsecured Business Loans

Unsecured business loans are a fast and flexible way to address short term cash requirements or unanticipated business opportunities.

Unsecured business loan featured image

Loan size

$5K To $500K

loan term

3 to 18 months

Interest rate

5% to 20%

Approval speed

Fast

Unsecured business loan

Key features of an unsecured business loan

Unsecured business loans are loans made without requiring business collateral such as property or inventory.

Unsecured loans are usually small to medium-sized loans ranging from $5k to $100k but can occasionally be as large as $500k. These loans are short in term, usually less than 12 or 18 months, and approval speeds can be as fast as 48 hours.

Compare an unsecured business loan

Advantages and disadvantages

Advantages

What are the advantages of an unsecured business loan

Disadvantages

What are the disadvantages of an unsecured business loan

Common uses & good to know

Everything else about an unsecured business loan

Common uses

Unsecured business loans are a good alternative for businesses that don’t want to post collateral in the form of property or other business assets

The flexibility of unsecured business loans mean that they are ideal to fund time-sensitive growth opportunities such as a financial adviser being presented with an opportunity to buy a book of business or a retailer being offered a large shipment of discounted inventory.

Entrepreneurs and business owners also often prefer unsecured loans compared to borrowing against their personal home.

Unsecured finance can also be a great bridge funding gaps due to unexpected costs that can occur due to shipment delays, breakdowns or other delays.

Good to know

Interest rates and fees on unsecured loans are generally higher than secured loans in order to cover the risks borne by the lender.

Some finance companies will require in-depth information about your business’ performance including financial statements and contracts and even your business plan and cash flow forecasts to help the lender assess the risk of non-payment. Lenders will also look closely at your credit score and credit history.

While unsecured loans don’t require a specific asset as a collateral, you may have to sign a personal guarantee which will allow the lender to pursue your personal assets in the case that the business fails.

Alternative Commercial Lending options

Other Business Finance Products​

Secured Business Loan

A secured business loan is a loan made by a bank or finance company where the lender requires the borrower to pledge assets as collateral against the loan.

Business line of credit

A business line of credit is a very flexible form of lending where you have cash available to draw down on as and when you need it.

Trade finance

Trade finance is any form of finance that is issued to support international trade, including letters of credit, debtor finance, & export credit.

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Unsecured business loan FAQ

Frequently asked questions

As unsecured loans are not supported by assets or collateral, lenders will instead focus on your ability to repay the loan out of cash flows. Lenders will therefore prioritise companies with strong cash flows. This means that companies without substantial assets can qualify as long as cash flows are strong.

Borrowers who are willing to provide the lender with a personal guarantee are more likely to secure funding.

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