Unsecured business loans offer fast funding without putting up collateral, but your assets may still be at risk.
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Written by Tara Mastroeni | Edited by Dawn Daniels | March 28, 2024
Best unsecured business loans in April 2024
How Does LendingTree Get Paid?
LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.
How Does LendingTree Get Paid?
LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.
| Lender | User ratings | Best for… | Max. loan amount | Term length | Min. interest rate | Time in business | |
|---|---|---|---|---|---|---|---|
| 5.0 stars | Same-day funding | $250,000 | Up to 24 months | 35.40%* | 12 months | Get business loan offers | |
| User ratings coming soon | Line of credit for established businesses | $250,000 | 6 or 12 months | Starting at 6.20% for 26-week term | 24 months | Get business loan offers | |
| 4.8 stars | Large unsecured business loans | $500,000 | 4 to 18 months | 1.11 factor rate | 6 months | Get business loan offers | |
| 5.0 stars | Line of credit for startups | $150,000 | 12 or 24 weeks | 4.66% for 12-week terms 8.99% for 24-week terms | 6 months | Get business loan offers | |
| 4.8 stars | Bad credit borrowers | $1,500,000 | 1.10 to 1.40 factor rate | 4 to 15 months | 6 months | Get business loan offers | |
| 3.1 stars | Traditional bank line of credit | $150,000 | Revolving | Prime rate + 1.75% | 24 months | Get business loan offers | |
| 4.8 stars | Low-revenue businesses | $100,000 | Undisclosed | 12 to 24 months | 12 months | Get business loan offers | |
| User ratings coming soon | Minority business owners | $250,000 | 8.49% | 12 to 60 months | 12 months | Get business loan offers | |
| User ratings coming soon | Small loan amounts | $250,000 | 6 to 24 months | 3% to 9% for 6-month loans 6% to 18% for 12-month loans 9% to 27% for 18-month loans 12% to 18% for 24-month loans | 12 months | Get business loan offers |
Learn more about how we chose our picks.
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Unsecured business lenders at a glance
OnDeck: Best short-term unsecured business loan
| Loan amounts | $5,000 to $250,000 |
| Starting interest rate | 35.40%* |
| Term length (months) | Up to 24 months |
| Min. credit score | 625 |
| Min. time in business | 12 months |
| Min. annual revenue | $100,000 |
| Pros | Cons |
|---|---|
Same-day funding available Shorter time in business requirement Lower annual revenue requirement | Higher interest rates Daily or weekly repayment required Charges an origination fee |
*This rate reflects the estimated starting APR offered to at least 5% of OnDeck customers. It doesn’t reflect the minimum APR offered by the company.
If you only need to borrow money for a short time, OnDeck could be a good option. The company offers short-term business loans up to $250,000 with the option to receive same-day funding and pay it back over up to 24 months. Plus, since it has a shorter time in business requirement and lower annual revenue requirement, it may be a fit for newer businesses as well.Still, you’ll likely pay more for the privilege of borrowing. OnDeck’s interest rates are relatively high and the company charges an origination fee. You’ll also have to manage a daily or weekly repayment schedule, rather than a monthly one.
Read our full OnDeck small business loan review.
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Bluevine: Best unsecured line of credit for established businesses
| Loan amounts | Up to $250,000 |
| Starting interest rate | Starting at 6.20% for 26-week (6-month) term |
| Term length (months) | 6 or 12 months |
| Min. credit score | 625 |
| Min. time in business | 24 months |
| Min. annual revenue | $40,000/month ($480,000/year) |
| Pros | Cons |
|---|---|
Flexible funding Affordable starting interest rate Available to business owners with fair credit | High annual revenue requirement Longer time in business requirement Shorter repayment terms |
If you need flexible access to funding, consider choosing a business line of credit over a term loan. Like business credit cards, lines of credit allow you to borrow money on an as-needed basis and replenish the funds upon repayment. However, lines of credit — and especially Bluevine’s offering — tend to have more affordable interest rates than credit cards.That said, Bluevine’s line of credit is likely only going to be an option if your business is well established. Its annual revenue requirement of $480,000 per year is likely going to be hard for some businesses to reach. In addition, its 24-month time in business requirement knocks out newer operations altogether.
Read our full Bluevine business line of credit review.
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National Funding: Best large unsecured business loans
| Loan amounts | $5,000 to $500,000 |
| Starting interest rate | 1.11 factor rate |
| Term length (months) | 4 to 18 months |
| Min. credit score | 600 |
| Min. time in business | 6 months |
| Min. annual revenue | $250,000 |
| Pros | Cons |
|---|---|
Lower minimum credit score requirement Shorter time in business requirement Provides dedicated account manager | Steeper annual revenue requirement Uses a factor rate instead of simple interest Short repayment terms |
With a funding cap that extends to $500,000, National Funding offers larger loan amounts than most of the other lenders on this list. Plus, with its minimum credit score requirement of just 600 and time in business requirement of only six months, this funding is accessible to a greater number of businesses as well.On the other hand, the repayment terms only extend to 18 months, which is shorter than many short-term business loan lenders. Not to mention the fact that expressing interest charges as a factor rate makes it much more difficult for the average business owner to understand the cost of borrowing.
Read our full National Funding business loan review.
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Fundbox: Best unsecured business line of credit for startups
| Loan amounts | $150,000 |
| Starting interest rate | 4.66% for 12-week terms 8.99% for 24-week terms |
| Term length (months) | 12 or 24 weeks |
| Min. credit score | 600 |
| Min. time in business | 6 months |
| Min. annual revenue | $100,000 |
| Pros | Cons |
|---|---|
Short time in business requirement Lower annual revenue requirement Lower minimum credit score requirement | Low maximum borrowing amount Short repayment terms Only one product available |
Startups who are looking for unsecured business funding may want to turn to Fundbox. Its minimum credit score requirement, annual revenue requirement, and time in business requirement are all more lenient than you might see with other lenders, making it a good fit for businesses that are just getting started.But, there are some tradeoffs to these flexible qualifying standards. At just $150,000, the borrowing cap is lower than you might find elsewhere. Also, Fundbox’s line of credit is the only financing product it offers, which might be too limiting for some business owners who want to take out a term loan.
Read our complete Funbox business loan review.
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Fora Financial: Best unsecured business loans for bad credit borrowers
| Loan amounts | $5,000 to $1,500,000 |
| Starting interest rate | 1.10 to 1.40 factor rate |
| Term length (months) | 4 to 15 months |
| Min. credit score | 500 |
| Min. time in business | 6 months |
| Min. annual revenue | $15,000/month ($180,000/year) |
| Pros | Cons |
|---|---|
Ability to borrow large loan amounts Low minimum credit score Short time in business requirement | Publishes factor rate instead of interest rate Short loan terms Higher annual revenue requirement |
Borrowers with bad credit may want to explore Fora Financial. This lender accepts scores as low as 500, which is by far the lowest requirement on this list. In addition, it offers the ability to borrow large loan amounts with its funding cap extending to $1,500,000, meaning that you should be able to use a Fora Financial loan to fund just about any business expense.
However, you’ll likely pay more in interest charges, especially if you have a lower credit score.As a rule of thumb, whenever interest is expressed as a factor rate, the rates tend to be higher. There are exceptions to this, but you’ll want to make sure you understand the full cost of the loan before agreeing to anything. Plus, you’ll be subject to a relatively short repayment term when paying back the amount that you’ve borrowed.Read our complete Fora Financial business loan review.
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Wells Fargo: Best unsecured business line of credit from a traditional bank
| Loan amounts | $10,000 to $150,000 |
| Starting interest rate | Prime + 1.75% |
| Term length (months) | Revolving |
| Min. credit score | Undisclosed |
| Min. time in business | 24 months |
| Min. annual revenue | Undisclosed |
| Pros | Cons |
|---|---|
Affordable starting interest rate No annual credit line review Offers alternative line of credit option for startups | Not transparent about all of its eligibility requirements Relatively high minimum loan amount Annual fee and cash advance fee attached |
If you’re not a fan of online lenders and you would rather get your financing from a traditional bank, consider Wells Fargo’s BusinessLine® line of credit. This lender showcases affordable interest rates and perks for borrowers, like waiving foreign transaction fees.Plus, it offers options for both established businesses and startups. Their startup option, the Small Business Advantage® line of credit, has a max loan amount of $50,000 and slightly higher interest rates.
At the same time, though, Wells Fargo is not fully transparent about its eligibility requirements, which can make it hard to tell if you’ll qualify for financing. Plus, this line of credit comes with fees and requires a personal guarantee.
Read our full Wells Fargo business loan review.
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Headway Capital: Best unsecured line of credit for low-revenue businesses
| Loan amounts | $100,000 |
| Starting interest rate | Undisclosed |
| Term length (months) | 12 to 24 months |
| Min. credit score | Undisclosed |
| Min. time in business | 12 months |
| Min. annual revenue | $50,000 |
| Pros | Cons |
|---|---|
Low annual revenue requirement Flexible payment schedules Short time in business requirement | Low borrowing cap Doesn’t fully disclose eligibility information Not transparent about interest rates |
Businesses who struggle to meet the annual revenue requirement for most lenders may be better served by Headway Capital. At just $50,000, its requirement is low enough for many businesses to meet. What’s more, this lender provides the option to pick between a weekly or monthly repayment schedule, providing added flexibility.Yet, there are some limitations to this lender. First and foremost, the borrowing cap on its line of credit is fairly low, extending to only $100,000. In addition, Headway Capital is not very transparent about all of its eligibility requirements and rate information, which makes it hard to tell if they are truly a fit for your business.
Read our entire Headway Capital business loan review.
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Accion Opportunity Fund: Best unsecured business loan for minority business owner
| Loan amounts | $5,000 to $250,000 |
| Starting interest rate | 8.49% |
| Term length (months) | 12 to 60 months |
| Min. credit score | Undisclosed |
| Min. time in business | 12 months |
| Min. annual revenue | $50,000 |
| Pros | Cons |
|---|---|
Prioritizes minority small business owners Provides business coaching and mentoring Offers flexible loan terms | Not available in MT, ND, SD, TN or VT Doesn’t disclose minimum credit score requirement |
Minority business owners may be a good fit for the Accion Opportunity Fund. The fund focuses on assuaging racial and gender inequalities by providing financing to minority business owners who have historically had trouble obtaining loans from traditional lenders. This fund combines flexible loan terms with supplemental programs, like business coaching and mentoring, for a holistic borrowing experience.Unfortunately, though, these loans are not available in all states. At the same time, the fund does not disclose a minimum credit score requirement. However, the website does state that it looks at many factors beyond credit score when weighing loan approval decisions.
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American Express Business Line of Credit: Best small unsecured business line of credit
| Loan amounts | $2,000 to $250,000 |
| Starting interest rate | 3% to 9% for 6-month loans 6% to 18% for 12-month loans 9% to 27% for 18-month loans 12% to 18% for 24-month loans |
| Term length (months) | 6 to 24 months |
| Min. credit score | 660 |
| Min. time in business | 12 months |
| Min. annual revenue | $3,000/month ($36,000/year) |
| Pros | Cons |
|---|---|
Low minimum loan amount Low annual revenue requirement No prepayment penalty | Each draw counts as a separate installment loan Confusing fee structure Requires personal guarantee |
When you only need to borrow a small loan amount, think about using American Express’s business line of credit. Loan amounts start at just $2,000, ensuring that you never have to borrow more than you need. Plus, its low annual revenue requirement makes it an attainable funding option for most business owners.However, there are some unique features of this line of credit that business owners should consider. For one, each draw on the line counts as a separate installment loan. For another, the fee structure, which frontloads your interest charges during the first few months of borrowing, may be confusing.
Read our full American Express Business Line of Credit review.
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What is an unsecured business loan?
At its core, the term “unsecured business loan” refers to any business loan that is not secured by collateral.
Secured business loans, on the other hand, are backed by an asset, such as property or equipment. If you stop making payments on a secured business loan, the lender can repossess your asset as a form of repayment.
Since unsecured business loans do not have an asset attached to them, they are often considered riskier for the lender. As a result, they may come with more stringent eligibility requirements and/or higher interest rates than a secured option. But, at the same time, you’re not putting an asset at risk.
On this page
- What is an unsecured business loan?
- Types of unsecured business loans
- How to get an unsecured business loan
- How to compare unsecured business loans
- Pros and cons of unsecured business loans
- Alternatives to unsecured business loans
- How we chose the best unsecured business loan
- Frequently asked questions
Types of unsecured business loans
Many types of business loans can provide financing without collateral, including:
Term loans
Business term loans typically provide you with funding in a lump sum and then you repay the loan through a series of fixed principal and interest payments over time. Long-term business loans usually work on a monthly repayment schedule, while short-term business loans tend to work on daily or weekly repayment schedules.
Lines of credit
Similar to a business credit card, a line of credit is a form of revolving credit that you can draw from as needed. In this case, you’ll only pay interest against what you borrow. Unsecured lines of credit may come with higher interest rates and may require a personal guarantee.
Merchant cash advance
Merchant cash advances (MCAs) are an alternative form of business financing where you receive an upfront cash payment in exchange for a percentage of your future sales.
Since this type of funding typically boasts more lenient eligibility requirements, it may be a good choice for newer businesses looking for a startup business loan with no collateral.
Invoice factoring
Where invoice factoring is concerned, you sell your outstanding invoices to a factoring company in exchange for an advance payment on a percentage of the total invoiced amount. After the factoring company collects payments on your behalf, they will deduct their fee and send you the remaining balance.
What is a Personal Guarantee?
A personal guarantee is a common provision in business loan agreements. It holds the business owner(s) personally responsible for repaying the company’s debts in the event that the company defaults on the loan. This means that, as the business owner, you’ll have to agree to accept responsibility for repaying the debts and that your credit score will be on the line if you’re unable to keep up with the payments.
How to get an unsecured business loan
Applying for an unsecured business loan is as easy as following these four steps:
1. Determine your borrowing needs: Even before you apply for an unsecured business loan, ask yourself why you need the funds and how much you need to borrow. You can use our business loan calculator to get a better sense of how borrowing various loan amounts will affect your budget.
2. Evaluate your qualifications: Once you decide what you can afford, you will also need to consider what you can qualify for and what the business loan requirements are. Typically, lenders look at your annual revenue and how long you’ve been in business. Lenders will also look at the personal credit score of the business owner and business credit score when determining eligibility which can affect the rates offered to you.
3. Compare lenders: It’s always a good idea to compare lenders to help find the best rate and the least amount of fees for your unsecured business loan. You can do so by reading reviews, visiting lenders’ websites and asking peers in your industry for recommendations.
4. Submit an application: Once you have found the lender that’s the best fit for you, it’s time to apply for a business loan. Applications can usually be done online, but lenders may ask for supporting documentation, such as a business plan or business tax returns.
How to compare unsecured business loans
Comparing lenders may save you a substantial amount of money over the life of the loan. Here’s what to look for once you have your loan offers in hand:
- Interest rate: Unsecured business loan interest rates can vary widely based on the lender and the loan type. Choosing the lowest interest rate will typically save you the most money over the life of the loan.
- Repayment term: Unsecured loans could require daily, weekly or monthly payments. Before signing on the dotted line, make sure that you’re able to keep up with the repayment schedule.
- Time to fund: When you need funds quickly, you might want to consider a fast business loan with an alternative lender. In some cases, you could receive funds on the same day as loan approval. However, you typically have to pay higher interest rates for the extra convenience.
- Added fees: Be sure to read the fine print in your business loan agreement so you can spot any added fees, such as origination fees, late charges and prepayment penalties.
- Loan use: Some business loans come with restrictions on how you’re allowed to spend the funds. Check with your lender to ensure their loan is an ideal match for your business type.
Pros and cons of unsecured business loans
| Pros | Cons |
|---|---|
| Collateral is not required. The application process is usually fairly simple. There are a wide variety of loan options, including choices for startups and bad credit borrowers. | Interest rates may be higher than secured loans. Often, a personal guarantee is required. Approval often is based largely on the strength of your credit score. |
Alternatives to unsecured business loans
If an unsecured business loan is not the right choice for you, consider these alternatives:
- Secured business loans: As explained above, secured business loans come with collateral attached to them. As a result, they often offer more lenient qualifying standards and more affordable interest rates than unsecured loans.
- SBA loans: Loans backed by the Small Business Administration (SBA) also typically have more lenient eligibility standards than other, more traditional forms of business funding. But, in exchange, they come with a lengthy application process and longer funding times.
- Small business grants: Small business grants are available from local and nationwide government and nonprofit organizations, as well as private companies. If eligible, you could receive funds for your business that don’t need to be repaid. However, the small business grant application process tends to be time-intensive and competitive.
- Business credit cards: If you’re looking to finance day-to-day expenses, business credit cards are another option to consider. Their eligibility criteria is typically less stringent than business loans, but credit card interest rates are also typically significantly higher than most small business loans.
How we chose the best unsecured business loans
We reviewed more than 22 lenders to determine the overall best nine unsecured business loan loans. To make our list, lenders must meet the following criteria:
- Minimum time in business of as little as six months
- Minimum credit score of 660 or less
- Rates and terms: We prioritize lenders with more competitive fixed rates, fewer fees and greater options for repayment terms, loan amounts and APR discounts.
- Repayment experience: For starters, we consider each lender’s reputation and business practices. We also favor lenders that report to all major credit bureaus, offer reliable customer service and provide any unique perks to customers, like free wealth coaching.
Best unsecured business loan summary
- OnDeck: Best for same-day funding
- Bluevine: Best line of credit for established businesses
- National Funding: Best large unsecured business loans
- Fundbox: Best line of credit for startups
- Fora Financial: Best unsecured business loan for bad credit borrowers
- Wells Fargo: Best traditional bank loan
- Headway Capital: Best unsecured business loan for low-revenue businesses
- Accion Opportunity Fund: Best unsecured business loan for minority borrowers
- American Express Business Line of Credit: Best small unsecured business loan
Frequently asked questions
Yes, it’s possible to borrow money without collateral using an unsecured business loan. But be aware that these loans often come with stricter eligibility criteria and higher interest rates than business loans that are backed by an asset.
To qualify for an unsecured business loan, your business will generally need to have sufficient revenue and longevity. You may also need a strong personal FICO score and to provide a personal guarantee.
Every lender’s minimum credit score requirements are different. Typically, a score of 670 and above is considered a good credit score and will be sufficient enough to get you approved for most loans. Meanwhile, a score of 740 or above is considered very good or excellent and is more likely to get you access to the most affordable interest rates.
