How to review and select an unsecured small business loan

Has this ever happened to you: you’ve found the lender your business dreams of, but after some internet research, you discover that they may not be as good as they say they are.

If you check reviews before hitting buy (or in this case, apply), you’re not alone. According to Trustpilot, nearly 9 in 10 consumers take a look at online reviews as part of their purchasing process.

But how do you sift through the noise and get to the facts? How do you properly whittle down a list of unsecured small business lenders that you like, check the reviews strategically, and decide on the most suitable lender for you?

Here are a few steps you could consider taking to find the most suitable loan for you:

What do you really need?

Going straight for the lender with the five-star reviews might not necessarily be the right choice for you. You and your business are unique. Start your loan journey with you, your needs, your circumstances, your goals, and then plug in the lenders. This prevents you from moulding your needs around their restrictions and puts you in the driving seat. No collateral needed as security: sign a personal guarantee instead. 

👉 Find out the current interest rates for unsecured business loans. 

Find your selection of possible lenders

You can do this by using a broker, like Funding Options by Tide, by searching online (search engines are a good place to start – you could also try social media), or by checking with your current bank or lender. Many business owners opt to do all three to ensure they have a wide pool to choose from.

👉 Here’s more on how to find the “best” short term business loan. 

Compare terms and interest rates

It can be tempting to look only at interest rates when comparing unsecured small business loans, but terms are also worth strong consideration. When selecting a lender, compare:

The loan term

The loan term is the amount of time you have to repay the loan. Some small business loans allow you to repay the loan in one chunk after a few months, whereas others ask you to pay in monthly instalments over the course of a year. Choose a loan term that works best for you.

Flexibility

How much flexibility are you afforded by each lender? For instance, are there any early repayment fees? Can you borrow again once you’ve repaid the loan, like you can with a revolving credit facility? You should also consider how difficult it would be to adjust the loan if your circumstances change.

Fees and charges

Check the lender’s standard fees. Look at arraignment fees, admin fees, and late repayment charges. Find out exactly what happens if you miss a payment.

👉 Wondering if there’s any government support for businesses seeking unsecured business loans? Here’s how the Growth Guarantee Scheme can help support your business.

Assess reviews

Trustpilot and Google Reviews are a good place to start when searching for reviews of your possible lender. Look for patterns across the reviews, for instance, do all the good reviews talk about how great the lender’s customer service is, and do all the negative reviews talk about their late payment charges? If you can spot a theme across the reviews, compare that theme to your assessment of your own needs from earlier.

Pay careful attention to how customers talk about the lender and keep an eye out for red flags – does every single review have a repetitive tone? Are they all the same length, with overly positive language that lacks detail? This could be a sign of fake reviews.

Don’t disregard asking around. If you know someone who chose that lender, get a review from them, or, reach out to someone in the lending industry online to ask about your possible lender’s reputation.

Lastly, if you’re worried, consider running an online search on your chosen lender’s company name plus words like “bad” or “scam” to double check there haven’t been any large recent issues.  

👉  Read up on if you should apply for revolving or non-revolving credit as a business owner. 

Find an unsecured small business loan with Funding Options by Tide

We work closely with some of the biggest and best names in lending, names like Funding Circle, Starling Bank, and Go Compare, to help match eligible businesses to the most suitable loans for them.

If you’re looking for a loan, we could help shave hours off your search by checking if you’re eligible to borrow between £1,000 and £20M from over 120 lenders, and if you are, presenting you with a list of the most trustworthy and suitable options we could find. This service is completely commitment-free, so you are absolutely within your rights to enquire, find out if you’re eligible, and then walk away.

If you’re curious, just click the link below and submit your information, it only takes a few minutes to apply.

Find an unsecured small business loan.

Please note that the information above is not intended to be financial advice. You should seek independent financial advice before making any decisions about your financial future.

It’s important to remember that all loans and credit agreements come with risks. These risks include non-payment and late-payment of the agreed repayment plan, which could affect your business credit score and impact your ability to find future funding. Always read the terms and conditions of every loan or credit agreement before you proceed. Contact us for support if you ever face difficulties making your repayments.

Funding Options, now part of Tide, helps UK firms access business finance, working directly with businesses and their trusted advisors. Funding Options are a credit broker and do not provide loans directly. All finance and quotes are subject to status and income. Applicants must be aged 18 and over and terms and conditions apply. Guarantees and Indemnities may be required. Funding Options can introduce applicants to a number of providers based on the applicants' circumstances and creditworthiness. Funding Options will receive a commission or finder’s fee for effecting such finance introductions.