What is an unsecured loan? How does it differ from a secured loan?

A secured business loan is money borrowed or secured against an asset you already own. This could be something like a car, premises or anything or value that will be used to secure payment to the creditor in the event that you are unable to repay the loan. In contrast, an unsecured business loan doesn’t require you to provide anything as security. Instead, you borrow a lump sum and then pay this back with interest over an agreed timeframe.

Small businesses could be eligible for both schemes, but the Bounce Back Loan Scheme aimed to help small businesses borrow smaller amounts more quickly, and with more generous terms.

You can read more about the difference between CBILS and BBLS on the British Business Bank’s website.