Unsecured Business Loans With No Personal Guarantee: What Is Available?
George Wilks
Commercial Lead · May 7, 2026 · 6 min read
A personal guarantee on a business loan is one of the most common sources of anxiety for UK directors. It means that if the company cannot repay, the lender can pursue the director personally. PG-free unsecured business lending exists in the UK, but it comes with important limitations that every director considering this route needs to understand.
What is available without a personal guarantee
A small number of fintech lenders in the UK offer unsecured business loans without requiring a personal guarantee from directors. The amounts available without a PG are typically limited, usually 25,000 pounds or less, though some providers go higher for businesses with very strong trading profiles. The rationale is that for small advances against demonstrably strong businesses, the credit risk is manageable without personal recourse.
Revenue-based finance is another category that sometimes operates without a traditional PG. These facilities are repaid as a percentage of business revenue and are assessed primarily on business performance rather than director personal creditworthiness. Some revenue-based lenders require a limited personal guarantee but cap the exposure at a small percentage of the facility.
The cost of avoiding a personal guarantee
PG-free lending comes at a cost. Lenders without personal recourse are taking on more risk, and they price this into their rates. A PG-free unsecured loan will typically carry a rate 3-8 percentage points higher in APR than an equivalent loan with a full personal guarantee. On a 20,000 pound loan over 24 months, this could add 1,000-2,500 pounds to the total cost.
For directors whose personal financial position makes a PG genuinely risky (significant personal assets or ongoing personal financial commitments), this premium may be worth paying. For directors whose personal assets are modest, the practical difference between a PG and no PG may be smaller than it appears, since enforcing a PG against a director with limited assets is rarely cost-effective for a lender.
"The fear of a personal guarantee is often larger than the actual risk, but it is never irrational. Understanding exactly what you are signing and what the worst case genuinely looks like is the right approach."
- George Wilks, Commercial Lead, Spark Finance
How to limit a personal guarantee if you cannot avoid one
When a PG cannot be avoided, there are ways to limit the exposure. Ask for a limited guarantee, which caps your personal liability at a specific sum (for example, the outstanding balance at the time of any claim, excluding fees and costs). Ask that the PG is discharged when the loan balance falls below a certain threshold. Where there are multiple directors, negotiate that the PG is shared jointly rather than jointly and severally (though lenders strongly prefer joint and several).
Personal Guarantee Insurance (PGI) is a growing product in the UK market that allows directors to insure against the risk of a PG being called. Premiums are typically 1-3 percent of the guaranteed amount per year and provide cover if the business becomes insolvent and the lender seeks to enforce the guarantee. It is worth considering for larger facilities where the personal exposure is meaningful.
Alternatives to unsecured lending that avoid a PG
Asset finance does not typically require a personal guarantee because the asset itself provides security for the lender. If the funding purpose relates to equipment, vehicles, or machinery, asset finance is often the most effective way to access capital without director personal exposure.
Invoice finance and merchant cash advances do not always require personal guarantees, particularly for established businesses with strong debtor books or card processing histories. These products are secured against the invoices or card revenue rather than against the director personally.
The bottom line
Spark Finance can compare PG-free unsecured lending options alongside standard products, ensuring you understand the cost trade-off before deciding. Apply at apply.sparkfinance.co.uk to see what is available for your business.
Check your eligibility