Barclays has today launched £100,000 unsecured lending, doubling its maximum for unsecured business loans for small and medium-sized enterprises (SMEs).

The move will help SMEs get faster access to finance and seize opportunities they might otherwise miss out on if lending decisions are not made quickly enough. It also means business owners will not have to use their business premises or home as security.

Getting funds fast

New research today also highlights the importance of access to finance. Barclays’ survey of more than 1,100 SME business owners shows just how vital speed is in today’s environment, with almost one in five (18 per cent) of those surveyed that have used a bank loan (and 9 per cent overall) saying they have lost out in the past because they could not get a loan or funding fast enough.

The research also found that over one in ten (11 per cent) of surveyed business owners said they’d be more likely to apply for a loan if they could get a decision within 24 hours, while 16 per cent of those that have used a bank loan (and 9 per cent overall) said the time it takes to get a loan puts them off applying.

Respondents were also hesitant to offer their home as security, with almost half (47 per cent) saying they would be deterred from taking a substantial loan out against their home, and nearly one in three (31 per cent) saying they would rather pay a slightly higher interest rate than have to use their home as security.

Unsecured lending differs from lending where the loan is secured against assets such as a business premises or the owner’s home. It is far faster for firms as it does not require land or property valuations and other steps that slow the process down.

Applicants for Barclays unsecured lending will typically be able to get a decision within 24 hours and have the money in their account within five working days.

See also:

Unsecured loans for small businesses

The difference between secured and unsecured business loans

Getting a short-term unsecured loan as a small business

The additional lending could not just help individual companies, but also boost the wider economy. For example, nearly a quarter (23 per cent) of business owners surveyed said that if they were given a £100,000 loan, they would hire more staff.

Both the pre-assessed lending up to £25,000 and the expansion of unsecured lending can make taking a business loan easier – an important benefit for business owners. In the survey, more than one in ten respondents overall (13 per cent), and approximately a quarter (24 per cent) that have used a bank loan, said applying for a business loan is more stressful than getting married or buying a home.

In addition, Barclays is increasing the maximum unsecured overdraft for business lending from £25,000 to £50,000, helping firms take on larger projects or deal with unexpected increases in business.