Homeowner business loans: why owning your home widens your options
A homeowner business loan is usually an unsecured business loan offered to companies whose directors own their home, because a…
Cash flow finance
Business loans for non-homeowners: funding options when you rent
Renting your home does not rule out business finance. See which products rely on your sales, invoices or equipment rather than a homeowner guarantor.
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In short
Yes, businesses run by tenants can borrow.
Merchant cash advances, revenue-based finance, invoice finance and asset finance rely mainly on the business's sales, customers or equipment, so homeowner status matters less. Some unsecured lenders also lend to non-homeowners, though often for smaller amounts or shorter terms.
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About business loans for non homeowners
Plenty of successful business owners rent their home.
Some live in cities where buying makes little sense, some are young businesses, and some have chosen to put their money into the company rather than bricks and mortar. Yet many first-time applicants find that unsecured lenders ask straight away whether a director owns property. This page explains why that question is asked, which types of finance care less about the answer, and how to put together a stronger application as a tenant. Smart Funding Solutions is an independent broker: we compare lenders on our panel, including those with criteria for non-homeowners.
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Why lenders ask about homeownership
Most unsecured lending to small companies comes with a director's personal guarantee. A lender sees a homeowner's guarantee as stronger, because there are assets behind it. Our page on homeowner business loans explains this in more detail. For a tenant, the guarantee still matters, but the lender leans more heavily on the business itself: its sales, bank account conduct and customers.
The answer, then, is to look first at products where the business's own trading or assets do most of the work.
Who this page is for
- Directors and sole traders who rent their home or live with family.
- Owners who own property abroad or jointly with someone outside the business, which some lenders treat as non-homeowner.
- Businesses with solid trading but no property to offer as security.
Costs to consider
Products that rely on future sales can cost noticeably more than a standard term loan. The pros and cons of merchant cash advances are worth reading before you commit. Compare the total amount repayable, how often payments are taken, and whether repaying early saves anything. With asset finance, look at deposits, balloon payments and end of agreement fees.
Alternatives
If you would rather limit personal exposure altogether, see our page on business loans without a personal guarantee. If you need several facilities at once, it can make sense to compare a combination rather than forcing everything into one loan.
Underwriting
What lenders look at
01
Bank statements, usually the last six to twelve months.
02
Monthly card or online sales for revenue-linked products.
03
An aged debtor list for invoice finance.
04
Filed accounts or management accounts where available.
05
Personal and company credit history.
06
Your address history and length of time at your current address.
Pros and cons
Pros
- Funding based on what the business does, not what you own.
- Several products flex with sales or grow with your debtor book.
- No property valuations or legal charges.
Cons
- Smaller amounts or shorter terms than homeowners may be offered.
- Revenue-linked finance can be expensive and takes a slice of daily takings.
- A personal guarantee is still common, even without property behind it.
Side by side
Compare your options
How the main business finance structures work. Lenders set their own terms, so treat this as a guide to the questions to ask.
| Option | How you repay | Security | Often used for |
|---|---|---|---|
| Unsecured business loan | Fixed instalments, usually monthly | No charge over assets; a personal guarantee is usually required | Growth, stock, tax bills and cash flow |
| Secured business loan | Fixed instalments, often over a longer term | A charge over property or other assets | Larger sums, property and refinancing |
| Revolving credit facility | Interest on what you draw; repay and redraw | Varies by lender and case | Recurring or uneven cash flow gaps |
| Merchant cash advance | A share of future card takings | No charge over assets | Card-taking businesses with uneven months |
| Asset finance | Regular payments over the life of the asset | The asset being financed | Equipment, vehicles and machinery |
| Invoice finance | Settled as customers pay their invoices | Your unpaid invoices | Businesses waiting on customer payment |
General information only. Every lender has its own criteria, and all finance is subject to status.
Finance that does not rely on homeownership
| Product | What the lender relies on | Best for |
|---|---|---|
| Merchant cash advance | Future card sales | Shops, restaurants and other card-taking businesses |
| Revenue-based finance | Online or recurring revenue | E-commerce and subscription businesses |
| Invoice finance | Unpaid invoices to business customers | B2B firms waiting 30 to 90 days to be paid |
| Asset finance | The equipment or vehicle being bought | Buying machinery, vans, IT or plant |
| Some unsecured loans | Trading history and bank statements | Established businesses with steady income |
Merchant cash advance
A merchant cash advance is repaid as a percentage of future card takings, so payments fall when sales are quieter. The GOV.UK finance finder listing for a merchant cash advance from 365 Finance describes it as having no fixed payments, fixed terms or security required. 365 Finance is one of the lenders on our panel. Providers usually look for a minimum level of monthly card sales and a period of trading.
Revenue-based finance
Revenue-based finance works in a similar way for businesses that take payments online or through recurring billing. The lender links to your sales data and takes a share of revenue until the agreed amount is repaid.
Invoice finance
If you sell to other businesses on credit, invoice finance releases most of the value of unpaid invoices. The lender is mainly interested in the quality of your customers, not your home. Directors are often asked for a warranty and indemnity covering the validity of invoices rather than a full guarantee, but wording varies.
Asset finance
With asset finance, the equipment or vehicle is the security. Hire purchase and leasing are widely available to tenants, particularly for assets with a good resale value. Newer businesses may be asked for a deposit or a guarantee.
Unsecured loans for non-homeowners
Some unsecured lenders do lend to non-homeowners. In our experience, the maximum amount or the term is often lower than the same lender would offer a homeowner, and they may look for longer trading history or stronger turnover. A tenant with clean bank statements and good credit can still be a strong applicant.
Illustrative example only, not a quote
A café owner who rents her flat needs £30,000 for a new kitchen and a quieter winter. An unsecured lender offers less than she needs because she is not a homeowner. Instead, she splits the request: the oven and extraction go on hire purchase, secured on the equipment, and a smaller merchant cash advance repaid from card takings covers working capital. Together the two facilities meet the need without a homeowner guarantor.
The broker’s view
How Smart Funding Solutions helps
Tell us how the business trades, what you need and that you rent. We match you to lenders whose criteria fit non-homeowners, and where one facility will not cover the full amount, we look at combining products. Start with Instant Quotes to compare lenders in minutes. It is free to enquire; any broker fee is disclosed separately before you proceed.
FAQs
Questions clients ask
Can I get an unsecured business loan if I rent?
Yes, some lenders consider non-homeowners. Expect them to look harder at trading history, bank statements and credit, and possibly to offer a smaller amount or shorter term than a homeowner would get.
Do I still need to give a personal guarantee as a tenant?
Often, yes. A guarantee is still common for unsecured and revenue-linked finance even when the director owns no property. Our guide to personal guarantees explains what you are agreeing to.
Does living with my parents count as a non-homeowner?
Yes. Lenders usually class anyone who is not a named owner on a property title as a non-homeowner, whether they rent, live with family or have another arrangement.
What is the easiest finance to get without owning a home?
It depends on the business. Card-taking businesses often find a merchant cash advance most accessible, B2B firms tend to do well with invoice finance, and anyone buying equipment can use asset finance. None of these is automatic; each lender still assesses the case.
Keep exploring
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