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Unsecured Loans

Unsecured Business Loans For Any Business Purpose

If you want a business loan without offering security, an Unsecured Business Loan might be the perfect solution for you!

Unsecured Loans are a great funding option for businesses that don’t own many assets, businesses that would prefer not to offer security, or a company that’s growing fast and needs finance quickly.

With a variety of lenders on the market able to offer Unsecured Loans, there are options for a wide variety of situations. This is where we at Saffron Financial come in, to point you in the right direction of the lender most suitable to you and your businesses needs.

Just a reminder that an Unsecured Loan doesn’t require security, where Secured Loans use assets as a security – meaning if things don’t work out, the lender can sell the asset to recoup the cost of the loan.

If this seems like the better option for you, please access our Secured Loans page for more information.

Business Loans Without Security

These days, more and more companies are based on intangible assets, for example, if you’re a software or consultancy company you’re likely to have a rented office, a few computers, and not much else in terms of Tangible Assets. That’s where Unsecured Business Loans come in.

What Is A Tangible Asset?

A Tangible Asset is equipment, machinery, plant, property anything that has a long-term physical existence or is acquired for use in the operations of your business and not for sale to customers. You may find them listed in the balance sheet of your business under ‘plant and equipment’ or ‘plant, property, and equipment’.

In the world of alternative finance there a lots of lenders who can lend upwards of £100,000 unsecured, even up to £250,000 in the right circumstances. Understandably there is much more risk to the lender with the debt being unsecured, therefore trading history becomes very important and the lender may ask for a personal guarantee too.

Lenders occasionally prefer a personal guarantee from a company director who wants a unsecured loan because it lowers their level of risk. Although personal guarantees can feel like a big commitment, they often help companies secure higher levels of funding.

Benefits of Unsecured Loans

  • Unsecured loans are almost always quicker to process as no evaluations are necessary and the legal process is simpler
  • No assets are required – more accessible type of finance
  • Up front cost is lower, or sometimes not required at all dependant on individual circumstances

Although there are benefits to taking out an unsecured loan please take into consideration that the overall cost may be higher, because the lender has a higher risk with having no security to re-cover the funds borrowed.