Unsecured business loans explained

Q: Do I need to put up assets for an unsecured business loan?

No — that's the defining feature. The lender takes no charge over a specific asset. Instead they assess your company's trading history, cash flow and credit profile. Your premises, equipment and other assets stay unencumbered.

2 min read

No collateralDefining feature

Often daysSpeed to fund

Trading-basedHow it's assessed

What 'unsecured' actually means

A loan is unsecured when the lender does not take a legal charge over a specific asset as collateral. With a secured loan, the lender can seize and sell a named asset — property, machinery, a debenture over the whole business — if you default. With an unsecured loan, none of that is pledged. The lender is relying on your company's ability and willingness to repay, evidenced by its trading performance.

This doesn't mean there are no consequences for non-payment. The debt is still legally owed by the company, and the lender can pursue it through the courts like any other creditor. What's different is that no individual asset is ring-fenced and earmarked for the lender from day one. For a trading business, that's a meaningful practical advantage.

What lenders assess instead of collateral

Without an asset to fall back on, an unsecured lender underwrites the business. Expect them to look at:

Trading history and turnover — how long you've traded and how much revenue flows through the company.
Cash flow — bank statements and, increasingly, live data via Open Banking, to see money actually moving.
Affordability — whether the projected repayments fit comfortably within your cash flow, often measured by a debt-service coverage ratio.
Business credit profile — your company credit score, payment behaviour and any adverse markers.
Sector and stability — some industries carry more underwriting risk than others.

Because the decision rests on data the lender can verify quickly, unsecured loans are typically faster to arrange than secured ones — often days rather than weeks.

The trade-offs

	Unsecured loan	Secured loan
Collateral	None required	Asset pledged as security
Speed	Fast — often days	Slower — valuation and legal work
Typical size	Smaller, trading-linked	Can be larger, asset-linked
Rate	May be higher per the added risk	Often lower against security
Asset risk	No specific asset earmarked	Named asset at risk on default
Best for	Working capital, short-term needs	Large or long-term asset purchases

The figures and direction above are illustrative of the market generally, not a Credicorp quote.

When an unsecured loan is the right call

Unsecured borrowing shines when speed and flexibility matter more than borrowing the largest possible sum. It suits working capital needs, covering a tax bill, buying stock for a busy period, or seizing a time-limited opportunity. It also keeps your assets free — useful if you'd rather not tie up your premises or equipment, or if you want to preserve security for a future, larger facility.

Credicorp's business loans are unsecured short-term finance for UK limited companies. Funds are lent to the company against its trading strength, with no charge over your property or plant. If you'd rather have headroom on standby than a fixed lump sum, the Credicorp Flex facility works the same way on a revolving basis. You can apply online in minutes.

Frequently asked questions

Do I need to put up assets for an unsecured business loan?

No — that's the defining feature. The lender takes no charge over a specific asset. Instead they assess your company's trading history, cash flow and credit profile. Your premises, equipment and other assets stay unencumbered.

Are unsecured loans more expensive than secured ones?

Rates can be higher because the lender carries more risk without collateral. But the gap is often modest, and the speed, simplicity and freedom from tying up assets frequently outweigh it — especially for short-term working capital where the loan is repaid quickly anyway.

Is an unsecured loan the same as a no-personal-guarantee loan?

Not necessarily. 'Unsecured' means no asset is pledged as collateral; a personal guarantee is a separate promise by a director to repay if the company can't. Some unsecured loans still ask for one. Credicorp lends to the company with no personal guarantee — see our no-personal-guarantee guide.

How quickly can I get an unsecured business loan?

Because the decision relies on verifiable trading data rather than asset valuations and legal charges, unsecured loans are usually decided and funded in days, sometimes within 24–48 hours where the application is complete and the data is clean.