There are many reasons why unsecured business loans might be better for your business situation. Here are just a few:

1. You don’t have to provide collateral

Property is commonly used as collateral in a secured loan but a study by East & Partners recognised the availability of unsecured credit, with no requirement to mortgage the family home, is the most important factor for SMEs seeking finance to fund growth. Applying for an unsecured business loan means you do not offer your family home or other personal assets as collateral. You are safe in the knowledge that whatever happens in business, your personal assets won’t be at risk.

2. It’s easier to qualify

Unsecured business loans are designed to be easy to obtain. Many lenders will consider your application if you’ve been running a business for at least 6 months, with a minimum annual turnover $50,000.

3. Quick application and approval

It can take weeks to get a secured loan. With unsecured loans, you can often apply online in just a few minutes by connecting your cloud accounting software and online banking details. Plus, more often than not, you will receive a lending decision within two hours.

4. A less-than-perfect credit history is okay

It’s quite common for lenders to offer unsecured loans to business owners that do not meet the bank’s requirements. That means businesses with a tarnished credit history are still able to access the finance they need for growth. However, businesses with a strong credit history are offered a more competitive interest rate, as the interest rate is a reflection of risk the lender is taking.

5. It’s more flexible

Unsecured business loans are flexible in more ways than one. Not only do you have the power to choose the loan amount you desire for the time you need it, some lenders allow you to repay early without penalty. Each lender is different, however, so you must do your due diligence to make sure this is an option for your business.