Unsecured business loans

Discover how iwoca's unsecured business loans could help your business

Applying won't affect your credit score

What are unsecured business loans?

Unsecured business loans are an easy to access form of finance for businesses of all sizes. iwoca provides businesses with unsecured loans of £1,000 to £1 million from as little as 1 day up to 5 years.

How do unsecured business loans work?

Unlike secured business loans, you do not need to provide any business assets as collateral to get an unsecured business loan. This often makes them fast and simple to apply for, which is why unsecured loans are one of the most popular forms of business finance. Unsecured loans are especially popular with smaller businesses that may not have enough business assets to provide as collateral for a secured loan.

But keep in mind that unsecured loans are not suitable for every business. Since unsecured loans are riskier for lenders than secured loans, lenders tend to charge higher interest rates and offer unsecured loans for smaller amounts over shorter periods of time.

What is the difference between secured and unsecured business loans?

The comparison table below lays out the key differences between unsecured and secured business loans, which should help you decide which type of loan is more suitable for your business.

Feature	Unsecured Business Loans	Secured Business Loans
Collateral	Requires no business assets as collateral.	Requires business assets as collateral.
Speed	Typically faster to arrange finance	Typically slower to arrange
Flexibility	Often more flexible, with early repayment common	Less flexible, may be expected to hold loan to term
Cost	Typically more expensive	Typically slightly cheaper
Repayment Terms	Typically shorter-term between months and ~5 years	Typically longer-term between 2 to 10+ years
Personal Guarantee	Likely to require a personal guarantee	May also require a personal guarantee

The main difference between unsecured and secured business loans is that taking out a secured loan requires you to provide business assets as collateral. In the event of non-payment, a secured lender may take ownership of these assets to recover the outstanding loan balance. Whereas with an unsecured loan, there is no risk to your business assets. Although many unsecured loan providers, including iwoca, ask for a personal guarantee on the loan, which can put your personal assets at risk in the event of non-payment.

Secured business loans are more suitable for established businesses looking to fund long-term investments, with business assets available to use as collateral. Whereas unsecured business loans are more suitable for businesses looking for a shorter-term, more flexible form of business finance.

Advantages and disadvantages of unsecured business loans

Advantages:

Fast and simple to arrange
Minimal paperwork required for application
No business assets at risk
Freedom to buy and sell business assets, without tying them up as collateral
One of the most flexible forms of business finance

Disadvantages:

Higher interest rates (vs secured loans)
Limited to shorter term borrowing
Likely to require a personal guarantee‍

For many businesses, the disadvantages listed above are not a major blocker from taking out an unsecured business loan. For example, with iwoca's unsecured business loans you can borrow up to £1 million and for up to 5 years, both of which are sufficient for the needs of most small and medium-sized businesses.

Eligibility criteria for unsecured business loans

If you are applying for an unsecured business loan from iwoca, the eligibility criteria is much lighter than many banks and secured loan providers. You simply need to meet 3 criteria to be eligible for an iwoca loan:

Be over 18 years old
Be based in the UK
Be a Limited Company or Limited Liability Partnership

Whether you are approved for an unsecured loan will depend on a number of factors, including your personal credit history, the business' trading history and its financial stability.

How to apply for an iwoca unsecured business loan

Apply in minutes
With our streamlined online application, you can apply online in minutes. We'll just need some personal information and some high-level business information.
Upload documents
We may ask you to upload some documents. We'll typically ask to see your business's bank statements, and may also ask to see company statements and VAT returns.
Accept your offer
You'll typically receive a decision in 24 hours, and will be able to access the funds as soon as you are approved.

Apply now

Applying won't affect your credit score

Loved by over 150,000+ small businesses since 2012

Short Term Business Loan Calculator

You’ll never face any early repayment fees, even if you choose to repay your loan after a few days or weeks.
We’ll only charge interest on your outstanding balance for the days you’re using your business loan.
Borrowing for over 12 months may incur an additional fee, typically it's 5% when borrowing for 13 to 24 months and 6% for longer.

6 monthly repayments of £5,123

Total repayment of £61,471

Including fee of £0

3.33% interest per 30 days (49% APR representative)

Loan Amount

Borrow up to £1,000,000

Months

For up to 60 months

Apply to find out your actual rate

Apply now

This loan calculator is only an example, your actual rate and repayment amount for your business loan will vary based on your circumstances. At least 51% of customers who take out a loan of £25,000 or less receive our Representative APR or a lower rate.

Fund your future with a business loan

No early repayment fees

If you want to repay early that’s great. We’ll never charge a fee for that. In fact, more than 20% of our customers repay ahead of schedule in their first six months.

Easy application

We’ve designed our application process to be as slick as possible: link your bank account and get going in minutes.

No hanging around

Once you’re approved, we’ll ping the money straight to your account. And if you need more later, you can apply for a top-up.

Unsecured business loans FAQs

Get the answers to all of your key questions about iwoca's unsecured business loans from iwoca.

How much does an unsecured loan cost?

iwoca's unsecured business loans start at 1.5% per month. We charge no fees on 12-month loans, but longer term loans may incur a fee.

Our representative APR is 49%, or 3.33% interest per 30 days. If you borrowed £10,000 at our rep APR, you'd repay a total of £12,294 over 12 months.

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Are there any fees if I want to pay my loan back early?

None. We believe you should only pay for the finance you actually use. Whether you want to make a one-off overpayment or clear the entire balance months ahead of schedule, we never charge early repayment fees.

Will applying for an unsecured loan impact my credit score?

Applying for an iwoca unsecured loan will not affect your credit score, since we only run a "soft" credit check during application. If you choose to take out the loan, then we will run a "hard" credit check which will affect your credit score.

If you default on the loan or make a late payment then this may impact your credit score negatively.

Do unsecured loans require a personal guarantee?

As is standard for most unsecured business lenders, at iwoca we require a company director to provide a personal guarantee on all of our unsecured loans. This is a commitment from the director to take personal responsibility for the loan if the business is unable to repay it.

This allows us to offer larger amounts and better rates, without the need for the collateral required for a secured loan.

What documents do I need to provide in my application?

Depending on how much you're applying for, we may ask for you to provide supporting documents. For many customers, this will just consist of your last 6 - 12 months' bank statements. For larger or more complex applications, we may also ask for your latest VAT returns or full accounts, but we don't require a 50-page business plan or complex financial forecast just to say "yes."

Can I get an unsecured loan if my business is relatively new?

Yes. While traditional banks often require years of trading history, we support a wide range of businesses—from established SMEs to newer companies and startups. As long as you are a UK-based Limited Company or LLP and can demonstrate a steady revenue stream, we’re happy to review your application.

Here are other financing options that could suit your needs

Questions? We're here to help

Call us at 020 3778 0274 from Monday to Friday (9am - 6pm). We can take your business loan application over the phone, or answer your questions about applying online.

contact@iwoca.co.uk