Understanding Unsecured Business Cash Flow Loans

Finding funding can be hard for a business. Many loans need property or other assets as security, and not every business has them. An unsecured business cash flow loan gives you funds without putting property up as security. Here is how they work and when they can help.

Quick access to funds

Unsecured cash flow loans are built for speed. The application is usually simpler than for a secured loan, and many lenders give a quick decision. This is one of the main reasons our clients use them. It helps when you need to act fast on an opportunity or meet an urgent bill.

Use the money where you need it

You can use the funds for many things, such as:

• day-to-day running costs
• stock
• marketing
• VAT and tax bills
• new equipment, staff or premises

Your property is not used as security

With a secured loan, the lender can take the asset if you don’t keep up repayments. An unsecured loan is not secured on your home or business premises. But lenders often ask the directors for a personal guarantee. This means you may have to repay the loan yourself if the business can’t.

A buffer for quieter months

Cash flow is a constant challenge for many businesses. A cash flow loan can help you keep running smoothly through a lean period, so you can pay suppliers and staff on time.

Building your business credit

Making your repayments on time can help build your business’s credit history. A good record can open the door to larger loans and better rates in the future.

Using a cash flow loan to pay VAT and tax bills

A VAT return or corporation tax bill can land when cash is tight. An unsecured cash flow loan can help you pay HMRC on time and spread the cost over a set term.

• Fast access to funds. Decisions can be quick, so you can meet the deadline.
• Set repayments. You know what you will pay each month, which makes planning easier.

Paying on time avoids HMRC penalties and interest. But a loan still has to be repaid, so make sure the repayments fit your cash flow.

In short

An unsecured cash flow loan can be a quick, flexible way to fund your business. Rates are often higher than on secured lending, so check the full cost and make sure you can meet the repayments before you go ahead.

Most loans to limited companies are not regulated by the Financial Conduct Authority.

Next steps: See if your company could qualify for an unsecured business cash flow loan, or look at asset finance and our commercial finance options.