Unsecured business loans – an update

Unsecured business loans – an update

As many of you know, I get heavily involved in quick unsecured lending to businesses. It can be quite eye opening to them when they realise what’s available, the timescales involved and the ‘non-traditional’ forms of repaying these loans.

In response to this, here is a quick bullet point summary of the current marketplace regarding unsecured business loans:

• Its still a good time to apply for a business loan: If you are a profitable business who has a valid reason for looking to borrow funds then its worth consideration. Quick loans are available and can be in your account within a few days if required and availability is strong. Caveat – this may not last forever!
• Banks are continuing to move away from the lower end of the SME marketplace. Unless you have a well-established relationship with your bank, you are unlikely to be able to receive an unsecured loan over £25,000. Banks are still moving towards focusing on larger businesses and well secured lending against strong debtor books and property.
• Larger amounts which would traditionally require background security are still available. Banks have usually looked for security (a charge over an asset or property) when lending reaches £25,000. This remains the case. Unsecured loans through peer to peer lenders are still available up to £500,000! Clearly this is exceptional but loans up to a couple of hundred thousand pounds are still readily available with funds available within a few days.
• Lenders are being more creative regarding underwriting and repayment profiles. Some lenders are more concerned with bank account conduct than trawling through the last three years of accounts. This has led to a more flexible approach to repayments, with shorter terms and more frequent repayments (daily, weekly rather than the traditional monthly) becoming more common.

Summary:

• If you are thinking of borrowing money for your business, then don’t put it off.
• If you have been to your bank, its worth a second option from an unsecured lender – especially if time is of the essence!
• Don’t be put off by the amount – larger loans are available on an unsecured basis if your business can afford it.
• Have an open mind with regards to repayment options – the frequency term of repayment may be new to you.
• If you would like to know more, please get in touch.

James