Business loans for non-homeowners

Most lenders require at least one shareholder to be a homeowner, regardless of the amount that’s being applied for. This can therefore limit the options to businesses which don’t have a shareholder that’s a homeowner.

For most lenders, this is simply a tick-box exercise where as long as there’s a homeowner, regardless of it’s value, they can look to offer the business their full product offering. You are also more likely to get a more competitive loan if you are a homeowner, however there are a couple lenders that do not take home-ownership into consideration.

Some of the tier 1 term loan unsecured business loan lenders do not require you to be a homeowner but they will typically limit the amount you can borrow to £50,000 or potentially up to £100,000 if you have very good credit. These can still be at a very competitive interest rate over 5 years to spread the monthly repayments out over a longer period.

Otherwise, you will be limited to short-term unsecured products such as the revolving credit facility (up to £200,000 over 1 year) or the merchant cash advance (up to £500,000 over approx. 1 year). These are both still viable options and can help raise the funding that your business requires. They also offer the most flexibility out of all the products available.

Two other options to consider are that if you raise invoices and want something more long term, then you may want to consider invoice finance. The other option is if you have assets in the business that can be refinanced over a term of up to 5 years.

Lastly, if you have a family member who is a homeowner, then they could act as a third-party guarantor for the loan. It’s worth noting that they will be equally responsible for repaying the loan if the business is unable to do so.