Best Unsecured Business Loans in July 2024

Unsecured business loans offer fast funding without putting up collateral, but your assets may still be at risk.

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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.
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Written by Tara Mastroeni | Edited by Dawn Daniels | June 28, 2024

Unsecured business lenders at a glance

ondeck logo

OnDeck: Best short-term unsecured business loan

Loan amounts$5,000 to $250,000
Starting interest rate27.30%*
Term length (months)Up to 24 months
Min. credit score625
Min. time in business12 months
Min. annual revenue$100,000
ProsCons

 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.


Bluevine: Best unsecured line of credit for established businesses

Loan amountsUp to $250,000
Starting interest rateStarting at 6.20% for 26-week (6-month) term
Term length (months)6 or 12 months
Min. credit score625
Min. time in business24 months
Min. annual revenue$40,000/month ($480,000/year)
ProsCons 

 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


National Funding: Best large unsecured business loans

Loan amounts$5,000 to $500,000
Starting interest rate1.11 factor rate
Term length (months)4 to 18 months
Min. credit score600
Min. time in business6 months
Min. annual revenue$250,000
ProsCons

 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

Fundbox logo

Fundbox: Best unsecured business line of credit for startups

Loan amounts$150,000
Starting interest rate4.66% for 12-week terms
8.99% for 24-week terms
Term length (months)12 or 24 weeks
Min. credit score600
Min. time in business6 months
Min. annual revenue$100,000
ProsCons 

 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


Fora Financial: Best unsecured business loans for bad credit borrowers

Loan amounts$5,000 to $1,500,000
Starting interest rate1.10 to 1.40 factor rate
Term length (months)4 to 18 months
Min. credit score570
Min. time in business6 months
Min. annual revenue$15,000/month ($180,000/year)
ProsCons 

 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

Wells Fargo: Best unsecured business line of credit from a traditional bank

Loan amounts$10,000 to $150,000
Starting interest ratePrime + 1.75%
Term length (months)Revolving
Min. credit scoreUndisclosed
Min. time in business24 months
Min. annual revenueUndisclosed
ProsCons 

 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


Headway Capital: Best unsecured line of credit for low-revenue businesses

Loan amounts$100,000
Starting interest rateUndisclosed
Term length (months)12 to 24 months
Min. credit scoreUndisclosed
Min. time in business12 months
Min. annual revenue$50,000
ProsCons 

 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

Accion Opportunity Fund: Best unsecured business loan for minority business owner

Loan amounts$5,000 to $250,000
Starting interest rate8.49%
Term length (months)12 to 60 months
Min. credit scoreUndisclosed
Min. time in business12 months
Min. annual revenue$50,000
ProsCons 

 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

American Express Business Line of Credit: Best small unsecured business line of credit

Loan amounts$2,000 to $250,000
Starting interest rate3% 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 score660
Min. time in business12 months
Min. annual revenue$3,000/month ($36,000/year)
ProsCons 

 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

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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.

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

ProsCons 
 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

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.