{"id":19570,"date":"2025-08-17T23:45:52","date_gmt":"2025-08-17T23:45:52","guid":{"rendered":"https:\/\/finderica.com\/?p=19570"},"modified":"2025-08-17T23:45:52","modified_gmt":"2025-08-17T23:45:52","slug":"unsecured-business-loans-best-options-and-how-to-get-one","status":"publish","type":"post","link":"https:\/\/finderica.com\/?p=19570","title":{"rendered":"Unsecured Business Loans: Best Options and How to Get One"},"content":{"rendered":"
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If you don\u2019t have substantial physical assets \u2014 or simply need capital quickly \u2014 an unsecured business loan might be a good option. These <\/span>small-business loans<\/span> are available from banks, credit unions and online lenders.<\/span><\/p>\n<\/div>\n

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We\u2019ll start with a brief questionnaire to better understand the unique needs of your business.<\/p>\n

Once we uncover your personalized matches, our team will consult you on the process moving forward.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n

What is an unsecured business loan?<\/span><\/h2>\n
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An unsecured business loan is a type of financing that doesn’t require you to pledge <\/span>physical collateral<\/span> \u2014 which are assets like business equipment, inventory or real estate \u2014 that the lender can take if you fail to repay your loan. But even though physical collateral isn\u2019t required, that doesn\u2019t mean you\u2019ll be off the hook if you can\u2019t repay an unsecured loan; most unsecured loans are backed by either a personal guarantee or Uniform Commercial Code lien.<\/span><\/p>\n<\/div>\n

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Personal guarantee vs. UCC lien<\/span><\/span><\/p>\n<\/div>\n

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A <\/span>personal guarantee<\/span> holds you responsible for the debt if your business can\u2019t repay, allowing the lender to seize your personal assets in the case of default.<\/span><\/p>\n<\/div>\n

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A <\/span>UCC lien<\/span> gives a lender the right to seize your business assets if the loan isn\u2019t repaid. The lien may apply to specific assets or be a blanket lien, which covers all business assets needed to recover the debt.<\/span><\/p>\n<\/div>\n<\/div>\n<\/div>\n

How do unsecured business loans work?<\/span><\/h2>\n
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Unsecured business loans typically work like other types of <\/span>debt financing<\/span> \u2014 you apply for a loan, receive funds and repay what you\u2019ve borrowed over time with interest.<\/span><\/p>\n<\/div>\n

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Unsecured business loans usually fund faster than <\/span>secured business loans<\/span> because the lender doesn\u2019t have to check the value of your collateral. However, the absence of collateral makes them riskier for lenders, which is why unsecured loans typically have higher interest rates and may require personal guarantees or UCC liens.<\/span><\/p>\n<\/div>\n

Types of unsecured business loans<\/span><\/h2>\n
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There are many different types of unsecured business funding options, including:<\/span><\/p>\n<\/div>\n

Business term loans<\/span><\/h3>\n
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Term loans<\/span> are likely what you imagine when you think of a business loan. These loans are lump sums of capital that you borrow from a lender and repay over a fixed period of time. This type of loan works well for funding a specific investment or purchase for your business.<\/span><\/p>\n<\/div>\n

Business lines of credit<\/span><\/h3>\n
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Credit lines are a flexible form of financing that allow you to borrow up to an approved limit and pay interest only on the amount you use. As you repay the balance, the funds become available to borrow again. <\/span>Unsecured business lines of credit<\/span> can be used for working capital, short-term expenses and emergency funds.<\/span><\/p>\n<\/div>\n

Invoice factoring<\/span><\/h3>\n
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Invoice factoring<\/span> lets you sell your unpaid invoices to a factoring company in exchange for cash advances. The company takes control of the invoices and collects payment directly from your customers. Although factoring companies may want to see established invoicing practices and a certain time in business, a personal guarantee is often not needed because you\u2019re selling the asset directly.<\/span><\/p>\n<\/div>\n

Merchant cash advance<\/span><\/h3>\n
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With a <\/span>merchant cash advance<\/span> (MCA), you get a cash advance based on your sales, which you\u2019ll then repay with a portion of your future sales. MCAs are usually easier to qualify for than other types of business financing, but they are expensive and risky, making them a last-resort option.<\/span><\/p>\n<\/div>\n

Best unsecured business loan options<\/span><\/h2>\n
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250+ small-business products<\/span><\/span> reviewed and rated by our team of experts.<\/span><\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n

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80+ years<\/span><\/span> of combined experience covering small business and personal finance.<\/span><\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n

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50+ categories<\/span><\/span> of the best business loan selections.<\/span><\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n

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SS’s small-business loans content, including ratings, recommendations and reviews, is overseen by a team of writers and editors who specialize in business lending. Their work has appeared in The Associated Press, The Washington Post, MarketWatch, Nasdaq, Entrepreneur, ABC News, MSN and other national and local media outlets. Each writer and editor follows SS’s strict guidelines for <\/span>editorial integrity<\/span> to ensure accuracy and fairness in our coverage.<\/span><\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n

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Product<\/span><\/th>\nMax loan amount<\/span><\/th>\nMin. credit score<\/span><\/th>\nLearn more<\/span><\/th>\n<\/tr>\n<\/thead>\n
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Fora Financial – Online term loan<\/p>\n<\/td>\n

$1,500,000<\/td>\n570<\/td>\n<\/td>\n<\/tr>\n
\"Accion<\/p>\n

Accion Opportunity Fund Small Business Working Capital Loan<\/p>\n<\/td>\n

$350,000<\/td>\n600<\/td>\n<\/td>\n<\/tr>\n
\"Bluevine<\/p>\n

Bluevine – Line of credit<\/p>\n<\/td>\n

$250,000<\/td>\n625<\/td>\n<\/td>\n<\/tr>\n
\"Bank<\/p>\n

Bank of America Business Advantage Unsecured Term Loan<\/p>\n<\/td>\n

Undisclosed<\/td>\n700<\/td>\n<\/td>\n<\/tr>\n
\"OnDeck<\/p>\n

OnDeck – Online term loan<\/p>\n<\/td>\n

$250,000<\/td>\n625<\/td>\n<\/td>\n<\/tr>\n
\"Headway<\/p>\n

Headway Capital – Line of credit<\/p>\n<\/td>\n

$100,000<\/td>\n625<\/td>\n<\/td>\n<\/tr>\n
\"Fundbox<\/p>\n

Fundbox – Line of credit<\/p>\n<\/td>\n

$250,000<\/td>\n600<\/td>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<\/div>\n

Pros and cons of unsecured business loans<\/span><\/h2>\n
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Pros<\/span><\/p>\n
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No physical collateral required.<\/p>\n<\/div>\n

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Startups and borrowers with bad credit may qualify.<\/p>\n<\/div>\n<\/div>\n<\/div>\n

Cons<\/span><\/p>\n
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Typically higher APRs than secured business loans.<\/p>\n<\/div>\n

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Personal guarantee or UCC lien likely required.<\/p>\n<\/div>\n

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Less favorable terms (e.g., lower loan amounts, shorter repayment terms).<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n

How to get an unsecured business loan<\/span><\/h2>\n
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Follow these steps to get an unsecured business loan:<\/span><\/p>\n<\/div>\n

1. Determine your financing needs<\/span><\/h3>\n
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Decide how much funding you need and how much debt your business can afford. SS\u2019s <\/span>business loan calculator<\/span> can help you estimate your monthly payments and total interest costs.<\/span><\/p>\n<\/div>\n

2. Evaluate your business\u2019s qualifications<\/span><\/h3>\n
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Without collateral, lenders place greater emphasis on traditional <\/span>business loan requirements<\/span>, such as your personal credit score, annual revenue and time in business.<\/span><\/p>\n<\/div>\n

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Although online lenders often accept startups and borrowers with bad credit, these businesses may receive higher interest rates. Established businesses with good credit and strong finances will be able to access the most desirable rates and terms.<\/span><\/p>\n<\/div>\n

3. Compare lenders<\/span><\/h3>\n
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Research multiple <\/span>small-business lenders<\/span> to find the best choice for your business. Compare factors such as maximum loan amounts, interest rates, repayment terms and fees. You\u2019ll also want to consider a lender\u2019s application process, time to funding, customer service and reputation.<\/span><\/p>\n<\/div>\n

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\ud83e\udd13<\/span>Nerdy Tip<\/span><\/p>\n

If you want to quickly and easily compare multiple loan options at once, consider using a <\/span>business lending marketplace<\/span>, like Fundera by SS. You can submit one application and get matched with the best financing options based on your needs.<\/span><\/p>\n<\/div>\n<\/div>\n<\/div>\n

4. Submit an application<\/span><\/h3>\n
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Application requirements vary by lender, but you\u2019ll typically need to provide:<\/span><\/p>\n<\/div>\n

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