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An unsecured term loan is designed for UK-based SMEs, commonly limited companies or registered sole traders, that can show acceptable credit score and trading evidence. Lenders usually review business bank statements, turnover consistency, and affordability using measures like DSCR or an equivalent approach. This route can be a fit if you do not have property to secure and the loan is clearly for general business needs such as staffing, IT hardware for installs, marketing pushes, or smoothing delivery-related cash flow.

A secured term loan involves providing security, typically via a charge over business assets such as equipment, and eligibility often depends on your ability to supply documentation for underwriting and any required asset valuation. This subtype is frequently considered for amounts starting around £50,000 where there is sufficient asset availability. It is commonly repaid over 48 to 84 months, with interest pricing often quoted as an APR that can be lower than unsecured offers for viable profiles.

An overdraft replacement term loan is relevant where you need predictable monthly payments to reduce cash-flow volatility and replace costly short-term credit. Lenders still run affordability and credit checks and may be cautious about refinancing, so having a clear rationale matters. Typical term lengths can range from 36 to 72 months, and the facility can help clear timing-driven arrears created by payroll versus client billing differences.