As a business owner, securing financing is a crucial step for any business looking to grow, manage cash flow and invest in new opportunities or business assets.
For many businesses, particularly small and medium-sized enterprises (SMEs), unsecured business loans offer a flexible and accessible financing solution without collateral.
Since there are a variety of lenders in the market, finding the right unsecured business loan can be a daunting task.
Whether you’re looking for a quick cash injection to tackle operating costs or financing for expansion projects, this guide will help you navigate the options and choose a lender that meets your specific needs.
Understanding the strengths and unique features of these lenders will help you make an informed decision and secure the financial support you need to grow your business.
Top Lenders for Unsecured Business Loans
In no particular order, your best options for unsecured business loans are:
- support group
- Nucleus Commercial Finance
- Iwoca
- Lending
- Momenta Finance
- Fleximize
- Mycashline
- Swishfund
overview
Company background
Funding Circle has grown into one of the world’s largest online small business lending platforms.
The company’s mission is to provide small and medium-sized enterprises (SMEs) with greater access to finance, helping them grow and drive economic progress.
Since its inception, Funding Circle has facilitated over £16.9 billion in loans to more than 150,000 businesses worldwide.
Loan products
Funding Circle offers a variety of unsecured business loan products tailored to different business needs:
- Business loans: These are term loans of between £10,000 and £500,000 with a repayment period of up to six years. Interest rates start at 6.9% per year.
- Credit line: A revolving credit facility to help businesses manage their short-term cash flow needs, with amounts ranging from £1,000 to £250,000 and flexible repayment terms.
- Growth guarantee system: Government backed loans to support business growth and working capital needs in amounts ranging from £25,001 to £250,000.
Key Features
- Loan amounts: £10,000 to £500,000.
- Interest charges: From 6.9% per annum for business loans.
- Conditions: Up to 6 years.
- Application process: Fast and straightforward, with eligibility checks in 30 seconds, a 10-minute online application, decisions within an hour and funds usually disbursed within 48 hours.
Advantages and disadvantages
- Advantages: Fast approval times, competitive interest rates, no early repayment fees, and an easy application process.
- Disadvantages: Strict eligibility criteria, including the requirement that companies have been operating and based in the UK for at least one year.
overview
Company background
Nucleus Commercial Finance aims to provide UK SMEs with alternative financing options tailored to their individual needs.
Nucleus combines the stability of traditional banking with the flexibility and speed of alternative lending platforms.
The company has lent over £2.8 billion to businesses across the UK and offers a range of financial products designed to support business growth and sustainability.
Loan products
Nucleus offers various unsecured business loan options to suit different business needs:
- Core business loans: Unsecured loans ranging from £10,000 to £2 million with flexible repayment terms from three months to six years.
- Revenue-based financing: Allows businesses to borrow up to 200% of their monthly turnover with loan amounts up to £300,000.
Key Features
- Loan amounts: £10,000 to £2 million for business loans; up to £300,000 for sales-based financing.
- Interest charges: Tailored based on business financial data; competitive prices.
- Repayment conditions: Flexible, from three months to seven years, depending on the product and loan amount.
- Application process: Fast online application with decisions in just a few minutes and possible financing on the same day.
Advantages and disadvantages
- Advantages:
- Fast approval and financing process.
- No collateral is required for unsecured loans.
- Flexible repayment terms.
- Dedicated account managers for personalized service.
- Disadvantages:
- Strict eligibility criteria including a minimum of 12 months trading experience and at least one UK-based director.
- Interest rates and terms vary depending on the company’s financial situation.
overview
Company background
Iwoca’s mission is to make finance accessible to small businesses.
Frustrated by the rigid and slow processes of traditional banks, they developed a fintech solution that aims to provide SMEs with fast and flexible financing.
Over the last decade, Iwoca has become one of the fastest growing business lenders in Europe, supporting over 90,000 businesses and approving over £3 billion in loans.
Loan products
Iwoca offers different types of unsecured business loans tailored to the different needs of small businesses:
- Flexi credit: Take out loans between £1,000 and £500,000 with flexible repayment terms from 1 day to 24 months. Interest is only charged on the days the funds are used and there are no early repayment fees.
- Revenue-based financing: This option allows businesses to borrow up to 10% of their annual turnover, with a cap of £500,000. This type of loan is ideal for businesses that want to adapt their repayments to their revenue cycles.
Key Features
- Loan amounts: £1,000 to £500,000.
- Interest charges: Starts at 2% per month for Flexi Loans, with interest charged only for the days the funds are used.
- Repayment conditions: From 1 day to 24 months, with flexible and early repayment options.
- Application process: Simple online application that only takes a few minutes. Decisions are typically made within 24 hours and funds are available shortly after approval.
Advantages and disadvantages
- Advantages:
- Fast application and approval process.
- No early repayment fees.
- Flexible repayment terms.
- No detailed business plans or financial projections are required when applying.
- Disadvantages:
- Interest rates can be relatively high compared to traditional loans.
- Good business and personal credit is required for the best terms.
overview
Company background
Lending Crowd is a fintech lending platform supporting small and medium-sized businesses across the UK. Their goal is to provide fast and flexible financing options to help companies grow.
Using state-of-the-art technology and a dedicated lending team, Lending Crowd has facilitated over £310 million in loans to more than 2,200 businesses.
The aim of the platform is to provide a transparent, efficient and customer-centric credit experience.
Loan products
Lending Crowd offers different types of unsecured business loans:
- Business loans: These loans range from £75,000 to £500,000 with repayment terms ranging from 6 months to 5 years. The loans are intended to help companies manage their cash flow, buy stocks, finance expansions or refinance existing debt.
- Recovery Loan Scheme (RLS): Available to businesses affected by the Covid-19 pandemic, with loans ranging from £25,001 to £500,000.
Key Features
- Loan amounts: £75,000 to £500,000.
- Interest charges: From 6.9% annually.
- Repayment conditions: 6 months to 5 years.
- Application process: Fast and easy online application. Decisions are typically made within a few days and funds are disbursed shortly after approval. No early repayment fees.
Advantages and disadvantages
- Advantages:
- Competitive interest rates.
- Fast application and approval process.
- Flexible repayment terms with no early repayment penalty.
- Open to businesses with a minimum turnover of £100,000 and two years trading experience.
- Disadvantages:
- Requires personal guarantees for loans up to £350,000.
- Not covered by the Financial Services Compensation Scheme (FSCS).
overview
Company background
Momenta Finance offers a range of alternative financing solutions specifically tailored to support UK-based SMEs.
With a mission to provide transparent and accessible financing, Momenta Finance has become a trusted partner for companies seeking financial support.
The company has secured significant funding from partners such as Barclays and Quilam Capital to expand its lending capabilities.
Loan products
Momenta Finance offers various unsecured loan options to suit different business needs:
- Unsecured Business Loans: These loans range from £50,000 to £250,000 with terms ranging from 6 to 60 months. They are designed to support working capital, business growth, asset purchases, and more.
- Cash advance for companies: Loans up to £150,000, calculated as up to 120% of monthly card earnings, with no fixed term and flexible top-up options available after 4 months.
Key Features
- Loan amounts: £50,000 to £250,000 for unsecured business loans.
- Interest charges: Variable, depending on the company’s financials.
- Repayment conditions: 6 to 60 months.
- Application process: Easy online application with no credit impact until the applicant decides to proceed. Decisions and funding can happen quickly, often within a few days.
Advantages and disadvantages
- Advantages:
- Tailored financial solutions for specific business needs.
- No early repayment penalty after the first 12 months.
- Fast and efficient application process.
- Transparent fee structure.
- Disadvantages:
- Requires personal guarantees.
- Interest rates may vary depending on the company’s financial condition.
overview
Company background
Fleximize is a multi-award winning digital business lender providing flexible and accessible financing solutions for UK SMEs.
Fleximize has lent over £350 million to thousands of SMEs.
The company’s mission is to provide tailored financial products that help businesses grow and succeed, with a focus on customer service and innovation.
Loan products
Fleximize offers a range of unsecured business loan products tailored to various business needs:
- Flexiloan: Suitable for businesses with a minimum 12 month term and loan amounts from £10,000 to £500,000 with terms ranging from 12 to 60 months. Interest rates range from 0.9% to 2.9% per month.
- Flexiloan Lite: Targeting early stage growth companies with a minimum six month term and loan amounts of £10,000 to £500,000 with terms of 3 to 12 months. Interest rates range from 1.9% to 3.9% per month.
Key Features
- Loan amounts: £10,000 to £500,000.
- Interest charges: 0.9% to 2.9% per month for Flexiloan; 1.9% to 3.9% per month for Flexiloan Lite.
- Repayment conditions: 12 to 60 months for Flexiloan; 3 to 12 months for Flexiloan Lite.
- Application process: Fast online application with decisions usually made within 24 hours. The funds are often available on the day of approval.
Advantages and disadvantages
- Advantages:
- Fast approval and financing process.
- No early repayment fees.
- Flexible repayment terms and top-up options.
- Personal service with dedicated customer service representatives.
- Disadvantages:
- Requires personal guarantees from directors or shareholders.
- Higher interest rates on short-term loans compared to traditional bank loans.
overview
Company background
Fleximize was founded in 2014 with the aim of providing flexible and accessible financing solutions for small and medium-sized businesses in the UK.
The company’s mission is to empower businesses by offering financial products tailored to their needs, with an emphasis on customer service and innovation.
Fleximize has become a significant player in the alternative finance market, lending over £350 million to thousands of SMEs.
Loan products
Fleximize offers a variety of unsecured business loans to suit different business needs:
- Flexiloan: Designed for companies that have been trading for at least 12 months. It offers loan amounts from £10,000 to £500,000 with repayment terms between 12 and 60 months. Interest rates range from 0.9% to 2.9% per month.
- Flexiloan Lite: Suitable for young companies that have been in business for at least six months. It offers loan amounts from £10,000 to £500,000 with terms ranging from 3 to 12 months. Interest rates range from 1.9% to 3.9% per month.
Key Features
- Loan amounts: £10,000 to £500,000.
- Interest charges: 0.9% to 2.9% per month for Flexiloan; 1.9% to 3.9% per month for Flexiloan Lite.
- Repayment conditions: 12 to 60 months for Flexiloan; 3 to 12 months for Flexiloan Lite.
- Application process: Easy online application with decisions usually made within 24 hours. The funds are often paid out on the day of approval.
Advantages and disadvantages
- Advantages:
- Fast approval and financing process.
- Flexible repayment terms and top-up options.
- No early repayment fees.
- Personal service with dedicated customer service representatives.
- Disadvantages:
- Requires personal guarantees from directors or shareholders.
- Higher interest rates on short-term loans compared to traditional bank loans.
overview
Company background
Mycashline, trading as MCL Finance, aims to revolutionize SME lending with a focus on providing fast, flexible and transparent financing solutions.
The company’s mission is to provide small businesses with access to the capital they need to grow and succeed. Mycashline has quickly established itself as a trusted source of business financing, leveraging innovative fintech solutions to streamline the loan application process and ensure quick funding.
Loan products
Mycashline offers a range of unsecured business loan products to meet the diverse needs of small businesses:
- Unsecured Business Loans: Loans range from £5,000 to £100,000 with flexible repayment terms of 1 to 24 months. These loans are ideal for managing cash flow, expanding business operations, or taking advantage of business opportunities without the need for collateral.
- Merchant cash advance: This product is aimed at businesses that accept card payments and offers an advance based on future credit card sales. It is a flexible option that adjusts repayment amounts depending on sales volume.
Key Features
- Loan amounts: £5,000 to £100,000.
- Interest charges: Vary depending on loan type and borrower profile.
- Repayment conditions: 1 to 24 months.
- Application process: Fast and straightforward, with an initial decision often made straight away and funds paid out within hours of approval. The application process has no impact on the applicant’s creditworthiness.
Advantages and disadvantages
- Advantages:
- Fast approval and financing process.
- No early repayment fees.
- Flexible credit terms tailored to business needs.
- Dedicated customer service representatives will support you throughout the entire loan process.
- Disadvantages:
- Requires a personal guarantee.
- Higher interest rates compared to traditional bank loans.
overview
Company background
Swishfund’s vision is to prioritize flexibility, speed and customer service in corporate financing.
Their goal is to provide simple and hassle-free commercial loans and help businesses grow by offering fast and flexible financing solutions.
Loan products
Swishfund offers various unsecured business loan options:
- Business loans: Loan amounts range from £5,000 to £1,000,000 with terms ranging from 3 to 12 months and occasionally up to 24 months. These loans are designed to help companies manage their cash flow, expand their operations, and cover unexpected expenses.
Key Features
- Loan amounts: £5,000 to £1,000,000.
- Interest charges: Based on business performance and risk assessment.
- Repayment conditions: The term is 3 to 12 months, some loans have a term of up to 24 months.
- Application process: Fast online application process that takes approximately 10 minutes, with decisions typically made within 12 hours and funds available within 24 hours of approval. Weekly automated repayments help manage cash flow effectively.
Advantages and disadvantages
- Advantages:
- Fast decision-making and financing process.
- Flexible loan terms based on business needs.
- No hidden costs and transparent credit conditions.
- Personal support from internal experts.
- Disadvantages:
- Requires a minimum of 12 months trading experience.
- Depending on the loan amount and business profile, personal guarantees may be required.
How to choose the right lender for an unsecured business loan
To ensure your business receives the best possible terms and support, you must:
- Understand your business needs
- Evaluate the lender’s reputation
- Compare loan products and conditions
- Evaluate the application process
- Personal support
- Evaluate the lender’s specializations
1. Understand your business needs
- Loan purpose: Find out why you need the loan. Is it working capital, expansion, purchasing equipment or managing cash flow? Different lenders may specialize in different types of business loans.
- Loan amount: Determine how much funding you need. Some lenders offer small loans starting from £5,000, while others can grant up to £1,000,000.
- Repayment conditions: Consider the repayment period that fits your business’s cash flow. Some lenders offer short-term loans (up to 24 months), while others offer longer terms (up to 60 months).
2. Evaluate the lender’s reputation
- Customer reviews: Check online reviews and testimonials to gauge the lender’s reputation. Platforms like Trustpilot and Google Reviews can provide insights into customer satisfaction.
- Case studies: Check the lender’s website for success stories or case studies to see how they have helped other businesses like yours.
- Accreditations: Make sure the lender is accredited by relevant industry bodies, such as the Financial Conduct Authority (FCA) in the UK.
3. Compare loan products and conditions
- Interest charges: Compare interest rates from different lenders. Interest rates can vary significantly and even a small difference can affect the total repayment amount.
- Fees and charges: Look for hidden fees or charges, such as: E.g. processing fees or early repayment penalties.
- Flexibility: Check whether the lender offers flexible repayment options, such as the ability to make early repayments without penalties.
4. Evaluate the application process
- Speed: Consider how quickly you need the funds. Some lenders offer quick approval and funding within 24 hours, while others may take longer.
- Simple application: Evaluate the simplicity of the application process. Online applications, which can be completed in minutes, are often preferable.
- Documentation: Please note the documentation requirements. Some lenders require detailed financial reports, while others may only require basic information.
5. Personal support
- Dedicated account managers: Check whether the lender offers personal support from a dedicated customer service representative who can guide you through the loan process.
- Customer service: Evaluate the quality of customer service. Responsive and helpful support can make a significant difference, especially if problems arise during the loan term.
6. Evaluate the lender’s specialties
- Industry focus: Some lenders specialize in certain industries and may offer better terms or more relevant advice for businesses in those industries.
- Loan types: Make sure the lender offers exactly the type of loan you need, whether it’s a business loan, a merchant cash advance or sales-based financing.
Try our business loan calculator
If you’re looking for financing options for your business, be sure to use our free business loan calculator to compare the terms and conditions of different lenders.
Diploma
Choosing the right lender for an unsecured business loan can have a big impact on the growth and financial health of your business.
By understanding your business needs, assessing the lender’s reputation, comparing loan products and terms, evaluating the application process and ensuring personalized support, you can make an informed decision that meets your goals.
Each lender offers unique benefits tailored to your specific needs.
Invest time researching and comparing these options to ensure you get the best possible financing for your business. This way, you can confidently take the next step toward achieving your business goals and driving growth.
For more detailed information, visit FundingBay and we will help you find the right lender for your needs.
