Unsecured Loans

Cash flow is one of the most important aspects within a business, but sometimes, your business may come across unexpected expenses that put a massive financial strain if paid outright. We understand this at AJL Finance, and we’re here to help with unsecured loans. These types of loan mean that your business can borrow a lump sum and pay it back over a flexible term, with no security over assets – just a personal guarantee from the company directors.

What’s an unsecured loan?

Sometimes referred to as a personal business loan, an unsecured loan is a finance product that lets businesses borrow funds without requiring them to offer assets as collateral, like property or expensive equipment. Instead, the unsecured loan is awarded based on the company director’s guarantee, creditworthiness and ability to make timely repayments.

Unsecured loans can be suitable for the following:

• Tax & VAT Finance
• Insurance Premiums
• Working Capital Finance

Main features of an unsecured loan

No collateral is a key feature of unsecured loans. Businesses won’t need to put their assets up as security to access funds. However, they’ll need to pass an eligibility check that indicates they can repay the loan and have a credit history that shows they aren’t a significant risk.

Unsecured loans typically feature a set repayment schedule and interest rates. Borrowers make regular payments, usually each month, until the total loan is repaid. Unsecured loan interest rates are usually higher than rates for secured loans, as lenders bear greater risk because there is no collateral.

How does an unsecured loan work?

When firms get an unsecured loan, they borrow money from a lender. They agree to make monthly repayments for a fixed period until the loan and any interest accrued and owed is paid back in full.

A company’s creditworthiness among other factors is considered before funding is secured. For instance, a lender decides if they will lend to a firm, how much, and the interest rate of the unsecured loan based on what the loan is for, company revenue and credit history.

What are the advantages of unsecured business loans?

Largely considered the swiftest, simplest and most straightforward way to access funds for a business, there are several benefits to unsecured loans. No collateral is required, which means that if a firm fails to repay the loan, the lender can’t take away company assets.

As no valuation of property or assets is required, unsecured loans are quicker to process than secure loans. As a result, companies can access funds faster and set their plans in motion sooner.

Unsecured loans also offer far greater flexibility in comparison to other finance products. For example, business owners can decide how long they wish to take to repay the loan in full. An unsecured loan also allows firms to use funds to cover a wide range of different needs, from managing cashflow to refurbishment plans.

With AJL Finance, you could borrow between £10,000 and £500,000 for your business. Funds are usually deposited in your bank within 48 hours, with payment terms from three to 60 months. This is the typically quickest and easiest way to access the capital your business needs. To see if you’re eligible for an unsecured loan, complete our eligibility checker below or contact AJL Finance for further details.