Unsecured business loan – Where to get it and who it suits

The unsecured business loan is the most flexible form of business financing: you don’t need pledged property or a guarantor, and a decision often comes the same day. In this guide we explain where to get one, who it suits, and how much it costs.

What is an unsecured business loan?

An unsecured business loan is a loan granted to a company that doesn’t require pledged property (e.g. real estate or business mortgage) or a guarantor. The lender’s only ”security” is the company’s business profitability, credit records and cash flow.

Unsecured business loans are particularly offered by digital lenders such as Qred and CapitalBox, and some banks.

Unsecured vs. secured business loan

Differences in brief:

• Collateral: Unsecured doesn’t require any, secured requires property / business mortgage.
• Loan amount: Unsecured €5,000 – €350,000. Secured can be €3 million.
• Rate: Unsecured rates slightly higher (greater risk to lender).
• Processing time: Unsecured decision same day, secured takes weeks.
• Use: Unsecured always free-use, secured may be tied.

Benefits of unsecured business loans

• Fast processing – decision often the same day, money the next business day.
• No collateral risk – you don’t lose property if the business fails.
• Free purpose – use the money however you want.
• Flexible terms – repayment period 6 months – 5 years.
• Completely online – no need to visit a bank.
• Less paperwork – no financial statements or business plan often required.

Drawbacks of unsecured business loans

• Higher rate than secured loans (8–25% vs. 3–8%).
• Smaller maximum amount – usually up to €350,000.
• Stricter credit requirements for the company and responsible persons.
• Shorter repayment period than bank loans.

Who is an unsecured business loan good for?

Best suited when:

• You need financing quickly (acute cash flow need, seasonal inventory).
• You don’t want to pledge company or personal property.
• Loan amount is below €350,000.
• Your company has operated in Finland for at least 6 months.
• Annual revenue at least €40,000.
• You have regular income and clean credit records.

Conditions for unsecured business loans

Common requirements at Finnish lenders:

• Company registered in Finland, active Business ID.
• Operating for at least 6 months (some 12 months).
• Annual revenue at least €40,000 – €200,000.
• Company owners reside in Finland.
• Finnish bank account.
• No significant payment defaults.

Where to get the best terms?

Unsecured business loan rates vary widely – typically 8% – 25% effective annual rate. Pricing depends on:

1. Company revenue and profitability – stronger = lower rate.
2. Industry – more stable industries get better terms.
3. Company age – longer history improves terms.
4. Credit records for both the company and responsible persons.
5. Cash flow analysis – monthly cash flow matters.

Tips for a lower rate

• Compare multiple lenders – difference can be several percentage points.
• Apply at the right time – when company situation is good, not in cash flow crisis.
• Provide accurate figures – current revenue, forecasts, cash flow.
• Use shorter repayment period – if monthly installment fits the budget.

Frequently asked questions

Can a new company get an unsecured business loan?

Most lenders require 6–12 months of operation. Earliest-stage companies get loans harder – consider e.g. Business Finland grants or bank startup financing.

How quickly is the money in the account?

The decision often comes the same day, and money is transferred to the account within 1–2 banking days. For smaller amounts, money can be in account in hours.

Can I get unsecured loan with a payment default?

In practice no. Both company and responsible persons must have clean credit records. A payment default crashes chances of getting a loan.

Is a personal guarantor required?

Some unsecured loans require the company’s responsible person to sign a personal guarantee. This isn’t actual collateral but provides additional security. Most Finnish digital providers don’t require this.

See also: Business financing options – business loan vs. factoring and leasing.