The Client
A client had a requirement for business finance. The funds were needed for working capital and business expansion, with a target of raising between £10,000 and £15,000, urgently.
The Scenario
Unsecured business loans remain a relatively niche product and a higher-risk one for lenders. As a result, the market is more limited, and clients do not have as many options available to them as they would with a standard secured lending product such as a mortgage.
Lenders in this space tend to be cautious, balancing genuine support for businesses with responsible lending, which means liquidity in this market can be tighter than in more mainstream secured lending.
This is where we come in as a specialist commercial finance broker. We understand our lending partners’ requirements and match them carefully to each client’s needs. As an example, a business looking to fund equipment or machinery might find a standard business loan too expensive – in that case, we would look at an asset finance facility instead. This gives the customer the equipment they need, while giving the lender the security they require.
The Solution
With this client, we identified a high-turnover business. For businesses such as off-licences, corner shops and newsagents, turnover tends to run high relative to profit margin. We were able to arrange a £12,500 turnover-based loan, to be repaid over a mid-to-short term period.
This suited the client well, since it avoided a long, drawn-out finance arrangement – using the strength of their turnover, they were able to repay the loan within five months. The client was also delighted to receive the funds within 24 hours of their initial enquiry. Working to the client’s own requirements and pace was central to getting this right, and there are several other options we could have explored had the business been in a different position.
Summary
Both secured and unsecured business loans are accessible to businesses of all shapes and sizes. Working with a whole-of-market business loan broker means we search the market on your behalf to find the best lender and rate for your specific business, and present the application in the format and language each lender wants to see, which meaningfully improves the chances of approval.
Frequently Asked Questions
How quickly can an unsecured business loan be arranged for an urgent need?
It can move very quickly where the business has a strong, well-evidenced turnover.
Funds released within 24 hours of enquiry are possible in straightforward cases with the right lender.
What is asset finance, and how is it different from a business loan?
Asset finance funds a specific piece of equipment or machinery, with the asset itself typically acting as security for the lender.
This can make it more accessible and often cheaper than an unsecured business loan, particularly where the purpose is a specific equipment or machinery purchase.
Why is the unsecured business loan market more limited than secured lending?
Unsecured lending carries more risk for the lender, since there is no asset to fall back on if repayments stop.
This means fewer lenders offer it, and those that do assess applications more closely on turnover and trading history.
Can a short repayment term work in my favour on an unsecured business loan?
Yes, a shorter term can reduce the total cost of borrowing and avoid a long-term commitment.
Where turnover comfortably supports faster repayment, this can be a more efficient route than spreading the loan over a longer period.
Commercial Finance Network is a whole-of-market FCA authorised commercial finance broker working with property investors, developers, and businesses across the UK and internationally. We work across the full specialist business loan panel and will tell you which lenders will engage with your deal, what terms to expect, and how to structure the application before anything is submitted.
Commercial Finance Network is directly authorised and regulated by the Financial Conduct Authority. Unsecured business loans and other unsecured business lending facilities are not regulated by the Financial Conduct Authority.
Call us on +44 1494 622 111 or email info@cfnuk.com to speak to a specialist directly.
Related Pages
- Business Loans – flexible unsecured and secured lending for UK businesses
- Asset Finance Calculator – estimate monthly payments for equipment and machinery funding
- Working Capital Finance – flexible funding solutions to support business cash flow
- Commercial Loan Calculator – estimate monthly costs and repayments on your commercial loan