Best Unsecured Business Loans in December 2024

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

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Unsecured business lenders at a glance

U.S. Bank: Best unsecured business loan for fast funding

Up to $50,000

Undisclosed

Up to 48 months

Pros
  • Same-day funding available
  • Shorter time in business requirement
  • No origination fee
Cons
  • Small loan amounts
  • Unclear eligibility requirements
  • Only short repayment terms available

Why we picked it

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If you need cash in your pocket fast, U.S. Bank’s Unsecured Quick Loan could be a good option. The company offers short-term business loans up to $50,000 with the option to receive same-day funding and pay it back over up to 48 months. Plus, since it has a shorter time in business requirement, it may be a good fit for newer businesses as well.

One drawback is that the bank’s website lacks details on the specifics of this loan, including whether there is a minimum credit score or annual revenue requirement.

Read our full U.S. Bank small business loan review.

How to qualify

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In order to qualify, you’ll need to meet U.S. Bank‘s criteria of:

  • Minimum credit score: Undisclosed
  • Minimum time in business: 6 months
  • Minimum annual revenue: Undisclosed

Bluevine: Best unsecured line of credit for established businesses

Up to $250,000

7.80%

6 or 12 months

Pros
  • Flexible funding
  • Low starting interest rate
  • Available to business owners with fair credit
Cons
  • High annual revenue requirement
  • Longer time in business requirement
  • Short repayment terms

Why we picked it

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If you’re an established business looking for flexible access to funding, consider choosing Bluevine’s business line of credit. 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 lower 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 $120,000 per year may be hard for some businesses to reach. In addition, its 12-month time in business requirement excludes startups.

Read our full Bluevine business line of credit review.

How to qualify

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In order to qualify, you’ll need to meet Bluevine‘s criteria of:

  • Minimum credit score: 625
  • Minimum time in business: 12 months
  • Minimum annual revenue: $10,000/month ($120,000/year)

National Funding: Best large working capital loans

$5,000 to $500,000

1.11 factor rate

4 to 24 months

Pros
  • Offers large loan amounts
  • Short time in business requirement
  • Provides dedicated account manager
Cons
  • Steep annual revenue requirement
  • Charges an origination fee
  • Short repayment terms

Why we picked it

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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, National Funding doesn’t consider credit scores in its loan decisions, instead basing approval on a company’s time in business and annual gross sales. This helps make funding accessible to a greater number of businesses.

On the other hand, the repayment terms only extend to 24 months, which is shorter than many short-term business loan lenders. Not to mention the fact that the $250,000 annual revenue requirement can be hard for many small businesses to reach, and the lender requires you to sign a personal guarantee.

Read our full National Funding business loan review.

How to qualify

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In order to qualify, you’ll need to meet National Funding‘s criteria of:

  • Minimum credit score: Undisclosed
  • Minimum time in business: 6 months
  • Minimum annual revenue: $250,000

Fundbox: Best unsecured business line of credit for startups

Up to $150,000

4.66% to 8.99%  4.66% for 12-week terms
8.99% for 24-week terms

3 or 6 months  12 or 24 weeks

Pros
  • Short time in business requirement
  • Low annual revenue requirement
  • Low minimum credit score requirement
Cons
  • Low maximum borrowing amount
  • Short repayment terms
  • Only one product available

Why we picked it

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Startups who are looking for unsecured business funding may want to turn to the line of credit through 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 Fundbox business loan review.

How to qualify

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In order to qualify, you’ll need to meet Fundbox‘s criteria of:

  • Minimum credit score: 600
  • Minimum time in business: 3 months
  • Minimum annual revenue: $30,000

Fora Financial: Best unsecured business loans for bad credit borrowers

Up to $1,500,000

1.15 factor rate Factor rates start at 1.15, but can go as low as 1.10 with early payback provisions

Up to 18 months

Pros
  • Ability to borrow large loan amounts
  • Low minimum credit score
  • Short time in business requirement
Cons
  • Publishes factor rate instead of interest rate
  • Short loan terms
  • Higher annual revenue requirement

Why we picked it

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Borrowers with bad credit may want to explore Fora Financial. This lender accepts scores as low as 570, 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.

How to qualify

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In order to qualify, you’ll need to meet Fora Financial‘s criteria of:

  • Minimum credit score: 570
  • Minimum time in business: 6 months
  • Minimum annual revenue: $20,000/month ($240,000/year)

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

$10,000 to $150,000

9.75%  Based on the current prime rate of 8.00% + an added 1.75% from Wells Fargo

Revolving

Pros
  • Low starting interest rate
  • Points-based rewards program
  • No annual fee for the first year
Cons
  • Not transparent about all of its eligibility requirements
  • Relatively high minimum loan amount
  • Annual fee after the first year

Why we picked it

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If you’re not a fan of online lenders and you would rather get your financing from a traditional bank, consider Wells Fargo Bank’s BusinessLine® line of credit. This lender offers unique perks for borrowers, like a points-based rewards program (similar to credit cards rewards) and no 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 Bank 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 Bank business loan review.

How to qualify

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In order to qualify, you’ll need to meet Wells Fargo Bank‘s criteria of:

  • Minimum credit score: Typically 680
  • Minimum time in business: 24 months
  • Minimum annual revenue: Undisclosed

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

$50,000

Undisclosed

12 to 24 months

Pros
  • Low annual revenue requirement
  • Flexible payment schedules
  • Short time in business requirement
Cons
  • Low borrowing cap
  • Doesn’t fully disclose eligibility information
  • Not transparent about interest rates

Why we picked it

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Businesses that 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.

But there are some drawbacks to this lender. First and foremost, the borrowing cap on its unsecured line of credit is fairly low, extending to only $50,000. 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’re a fit for your business without applying.

Read our entire Headway Capital business loan review.

How to qualify

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In order to qualify, you’ll need to meet Headway Capital‘s criteria of:

  • Minimum credit score: Undisclosed
  • Minimum time in business: 12 months
  • Minimum annual revenue: $50,000

Accion Opportunity Fund: Best unsecured working capital loan for minority business owners

$5,000 to $250,000

8.49%

12 to 60 months

Pros
  • Prioritizes minority small business owners
  • Provides business coaching and mentoring
  • Offers flexible loan terms
Cons
  • Not available in Montana, North Dakota, South Dakota, Tennessee, Vermont or District of Columbia.
  • Doesn’t disclose minimum credit score requirement
  • Has origination fees of 3.00% to 5.00%

Why we picked it

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Minority business owners may be a good fit for the Accion Opportunity Fund. The fund focuses on addressing racial and gender inequalities by providing financing to minority business owners who have historically had trouble obtaining loans from traditional lenders. It combines flexible loan terms with supplemental programs, like business coaching and mentoring, for a holistic borrowing experience.

Accion Opportunity 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.

How to qualify

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In order to qualify, you’ll need to meet Accion Opportunity Fund‘s criteria of:

  • Minimum credit score: Undisclosed
  • Minimum time in business: 12 months
  • Minimum annual revenue: $50,000

PNC Bank: Best unsecured business loan for businesses in low-income communities

$20,000 to $100,000

Undisclosed

24 to 60 months

Pros
  • Rate discount for businesses in low- or moderate-income communities
  • Low minimum loan amount
  • Over 2,000 branches nationwide
Cons
  • Longer time in business requirement
  • Doesn’t disclose interest rates
  • Some eligibility requirements are unclear

Why we picked it

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If you operate in a low-income community, consider PNC Bank’s small business loan. PNC Bank offers 1.00% off its standard rates for new unsecured business loans for businesses located in low- and moderate-income areas.

PNC Bank loan amounts start at $20,000, making it an option for small businesses that need a smaller loan.

PNC Bank doesn’t disclose a minimum credit score for its small business loans. However, it does state that a personal credit history of five or more years that shows on-time payments on various types of debt is desired.

Read our full PNC Bank small business loan review.

How to qualify

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In order to qualify, you’ll need to meet PNC‘s criteria of:

  • Minimum credit score: Not disclosed
  • Minimum time in business: 24 months
  • Minimum annual revenue: Not disclosed

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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 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 an option for newer businesses that don’t qualify for lower-cost financing.

Invoice factoring

Invoice factoring allows you to 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

To apply for a business loan:

1. Determine your borrowing needs: Go over your budget to determine what amount you need and whether you can afford repayments. 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 your personal and business credit score when determining rates and eligibility.

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.

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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.

A personal guarantee is usually 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:

  • Qualification criteria: We factor in how easy it is to qualify for a loan and include lenders for newer businesses.
  • 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 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.