Short-term unsecured business loans
Fast loans from online and specialist lenders, repaid over one to 12 months, with no assets needed as security. Quick to arrange, but interest and fees are high and owners usually have to give a personal guarantee.
- Personal guarantee likely
How it works
These loans, also called cash flow loans, are based mainly on your business's recent and expected income rather than its assets. Lenders often decide quickly using your bank and accounting data.
- Term: usually one to 12 months.
- Cost: interest and fees are higher than on a secured or bank loan, because there is no security and the term is short. Compare the APR, which includes fees.
- Security: none on business assets, but the owners are usually asked for a personal guarantee.
- Uses: short-term costs such as payroll, rent, stock or an urgent bill.
Unsecured loans over longer terms, often three to five years, are also available from banks and other lenders.
Regulation: consumer credit rules can protect sole traders and partnerships of two or three people who are not all companies. They do not apply where the credit is over £25,000 and taken wholly or mainly for business.
Upsides and downsides
Upsides
- Very quick decisions and funding
- No business assets needed as security
- Business performance can count for more than your credit score
Downsides
- High interest and fees
- Short terms mean large repayments
- Usually needs a personal guarantee
Risks
- Repayments squeezing cash flow and leading to repeat borrowing
- Being personally liable under a guarantee
What it costs
- How it is priced
- Interest and fees, shown together as an APR
- Costs that are easy to miss
- Arrangement or origination fees
- Early repayment charges with some lenders
- Personal guarantee, making you personally liable
Set by the lender from your revenue and cash flow.
Have a quote? True cost of a loan: work out the APR-equivalent and total cost
Does it fit?
Could fit when
- You need money within days for a short-term cost and can repay within a year
- You have steady income but few assets to offer as security
Unlikely to fit when
- You need the money for more than a year
- You can wait for a cheaper bank loan or overdraft
Who can use it
- Business types: Sole trader, Partnership, Private limited company, LLP, Public limited company
- Needs sales (revenue)
- Lenders look mainly at your past and expected cash flow
- Usually a minimum trading period and turnover, set by each lender
Am I ready?
What a provider is likely to ask for. Tick what you have. Your ticks stay in this browser and nothing is stored. Checklist for all alternative and fast debt
0%
0 of 3 ticked
- Recent bank statements
- Repayment plan
- Guarantee understood
Regulation and protections
Credit for sole traders and partnerships of two or three people (not all companies) can be regulated consumer credit, unless it is over £25,000 and wholly or mainly for business. Many small businesses can also complain to the Financial Ombudsman Service.
Types of provider: Online business lenders; Specialist and alternative lenders.
Also consider
Sources
- British Business Bank: What is cash flow finance? · checked 7 October 2026
- British Business Bank: What are the different types of business loan? · checked 7 October 2026
- legislation.gov.uk: Regulated Activities Order 2001, article 60C (exempt credit agreements) · checked 7 October 2026
- legislation.gov.uk: Regulated Activities Order 2001, article 60L (relevant recipient of credit) · checked 7 October 2026