Entrepreneurs seeking quick capital to start or expand their businesses often face challenges with traditional loan processes, which can be slow and complicated. Unsecured business loans provide a faster, more flexible alternative by offering funding without requiring collateral. This allows business owners to secure the necessary capital while keeping their personal and business assets protected. In this article, we’ll dive into how unsecured business loans work, the different options available, and how they can help entrepreneurs take advantage of new opportunities swiftly and efficiently.
FAQ
Can I get an unsecured loan for a business?
Which online bank is best for an unsecured business loan?
What is the easiest small business loan to get?
Can I get a loan with an EIN number?
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Understanding unsecured business loans
Unsecured business loans offer a way for companies to get funding without putting up collateral. These loans can be helpful for businesses that need quick cash or don’t have assets to pledge.
What are unsecured business loans?
Unsecured business loans don’t need collateral. Lenders look at your credit score and business health instead. These loans can be term loans or lines of credit.
Term loans give you a lump sum to pay back over time. Lines of credit let you borrow up to a set amount as needed.
Unsecured loans often have higher interest rates than secured loans. This is because they’re riskier for lenders. You might get approved faster, though.
To qualify, you’ll need good credit and strong business finances. Lenders want to see that you can pay back the loan.
How they differ from secured loans
The main difference is collateral. Secured loans need it, unsecured loans don’t.
Secured loans use assets like property or equipment as a backup. If you can’t pay, the lender can take these assets. This makes secured loans less risky for lenders.
| Unsecured loans | Secured loans |
| No collateral needed | Collateral required |
| Higher interest rates | Lower interest rates |
| Faster approval | Longer approval process |
| Shorter terms | Longer terms available |
Unsecured loans often have shorter terms and lower amounts. Secured loans might offer more money and longer pay-back times.
Your choice depends on your needs, assets, and credit. Think about how much you need and how fast you need it.
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Benefits of unsecured business loans
Unsecured business loans offer quick access to funds without putting your assets at risk. They can help you grow your business or manage cash flow gaps.
No collateral required
Unsecured business loans don’t need collateral. This means you don’t have to pledge valuable assets like your home or equipment. It’s great if you don’t own much or want to keep your assets safe.
You can still get funding even if you lack valuable property. This opens doors for new businesses or those with few assets. It’s also less risky for you since the lender can’t take your stuff if you can’t pay.
But keep in mind, that no collateral often means higher interest rates. Lenders take on more risk, so they charge more. Make sure you can handle the payments before you sign up.
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Faster approval process
Unsecured loans usually have a quicker approval process. There’s no need to assess collateral value, which saves time. You can often get approved in days instead of weeks.
This speed is perfect for urgent business needs. Maybe you need to buy inventory fast or cover an unexpected expense. Quick approval means you won’t miss out on opportunities.
Many lenders offer online applications too. This makes the process even faster and easier. You can apply from your office or home without visiting a bank.
Just remember, faster doesn’t always mean easier to get. Lenders still check your credit and business health. Be ready to show strong financials for the best chances of approval.
9 of the best unsecured business loans
Securing the right financing for your business and finding a loan that offers flexibility without the need for collateral is necessary. Below, we’ve gathered a list of 9 of the best unsecured business loans, each offering competitive rates, terms, and features to help your business grow without putting your assets on the line.
1. OnDeck term loan
OnDeck offers business term loans to help you get the funding you need. These loans provide a lump sum of cash that you pay back over time.
You can borrow between $5,000 and $250,000 with OnDeck’s term loans. The repayment terms range from 3 to 24 months.
OnDeck’s application process is quick and easy. You can apply online in minutes and get a decision fast. If approved, you could receive funds as soon as the same day.
These loans don’t require specific collateral. Instead, OnDeck takes a general lien on business assets.
The interest rates for OnDeck term loans can be high. The average APR is 56.1%.
To qualify, your business needs to be at least one year old. You also need $100,000 in annual revenue and a personal credit score of 600+.
OnDeck term loans work well if you need fast funding for a specific business expense or project. The short-term and frequent payments can be tough to manage for some businesses.
| Pros | Cons | Funding maximum | Eligibility |
| Fast funding | High rates | $250,000 | 1+ year in business |
| Easy application | Short terms | $100,000+ annual revenue | |
| No specific collateral | Frequent payments | 600+ credit score |
2. Bluevine line of credit
Bluevine offers a flexible line of credit for small businesses. You can borrow between $6,000 and $250,000 with this option. The company provides fast funding, often within 24 hours of approval.
To apply, you fill out a quick online application. It won’t affect your credit score. You can connect your business bank account to speed up the review process.
Once approved, you get access to a digital dashboard. Here you can draw funds and schedule payments as needed. The line replenishes as you make repayments.
Bluevine has two lines of credit options: Flex 6 and Flex 12. Interest rates start at 7.8% for top customers. Your business needs at least $40,000 in monthly revenue to qualify.
| Pros | Cons | Funding maximum | Eligibility |
| Fast funding | High revenue requirement | $250,000 | $40,000+ monthly revenue |
| No impact on credit score to apply | Not available in all states | 6+ months in business | |
| Revolving credit line | High interest rates for some | 600+ credit score |
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3. Fundbox credit
Fundbox offers small businesses access to working capital through lines of credit. You can borrow between $1,000 and $150,000 based on your creditworthiness. The application process is quick and easy, with decisions often made in minutes.
One big plus is Fundbox’s flexible repayment terms. You can choose to repay over 12 or 24 weeks, giving you control over your cash flow. They also don’t require collateral, making it an unsecured option.
On the downside, Fundbox’s fees can be higher than some traditional lenders. You’ll need to carefully consider the cost versus the benefits for your business.
Fundbox stands out for its speed and accessibility. Even businesses with less-than-perfect credit may qualify. This makes it a good choice if you need fast funding and have been turned down elsewhere.
It’s best suited for small businesses looking for short-term financing to cover cash flow gaps or unexpected expenses. Startups and newer companies may find Fundbox more welcoming than traditional banks.
| Pros | Cons | Funding maximum | Eligibility |
| Fast funding | Higher fees | $150,000 | 6+ months in business |
| Easy application | Short repayment terms | $100,000+ annual revenue | |
| No collateral needed | 500+ credit score |
4. Kabbage Funding
Kabbage Funding is a product offered by American Express. It gives small businesses access to lines of credit between $1,000 and $150,000. You can apply online in minutes.
Kabbage Funding is part of American Express Business Blueprint. This platform aims to help small businesses manage their cash flow.
You might like Kabbage Funding for its quick application process. The flexible credit lines can also be helpful for various business needs.
On the downside, some users report bad customer service. There are also complaints about high fees and slower funding times.
Kabbage Funding could be a good choice if you need fast access to credit. It’s best for small businesses looking for flexible financing options.
| Pros | Cons | Funding maximum | Eligibility |
| Quick application | High fees | $150,000 | Small businesses |
| Flexible credit lines | Poor customer service |
5. Lendio loan marketplace
Lendio is an online platform that connects small businesses with lenders. It works with over 75 lenders to offer various loan options.
You can apply for different types of funding through Lendio, including unsecured business loans. The application process is quick and simple.
Lendio doesn’t charge you to use their service. They make money by getting commissions from lenders when you accept an offer.
One great thing about Lendio is the variety of loan options. You can compare offers from multiple lenders in one place.
A downside is that Lendio isn’t a direct lender. This means you’ll need to deal with another company for your actual loan.
Lendio stands out for its large lender network and easy application process. It’s a good choice if you want to explore many loan options quickly.
Lendio works well for small businesses that aren’t sure which type of loan they need. It’s also helpful if you have trouble qualifying with traditional lenders.
| Pros | Cons | Funding maximum | Eligibility |
| Many loan options | Not a direct lender | $2 million | Varies by lender |
| Free to use | May get many offers | ||
| Quick application |
6. Rapid Finance working capital
Rapid Finance offers working capital loans for small businesses. These loans give you quick access to funds for your day-to-day operations. You can use the money to cover payroll, buy inventory, or handle unexpected expenses.
The company provides loan amounts from $5,000 to $1 million. Repayment terms range from 3 to 60 months. This flexibility lets you choose a loan that fits your business needs.
Rapid Finance aims to make the loan process fast and simple. You can apply online and get a decision quickly. If approved, you may receive funds in as little as one business day.
| Pros | Cons | Funding maximum | Eligibility |
| Fast funding | Higher interest rates | $1 million | 6+ months in business |
| Flexible terms | Frequent payments | $120K+ annual revenue | |
| Simple application | Short repayment periods | 500+ credit score |
Rapid Finance stands out for its speed and ease of use. You don’t need perfect credit or years in business to qualify. This makes it a good choice for newer businesses or those with less-than-ideal credit.
The company offers both secured and unsecured loans. This gives you options based on your situation and comfort level with using collateral.
7. Credibly business loans
Credibly offers various business funding options, including unsecured loans. You can get working capital loans, lines of credit, and merchant cash advances. Loan amounts range from $5,000 to $600,000.
Credibly’s fast approval process is a plus. You may get funds in just a few days. They also accept lower credit scores than some lenders.
On the downside, Credibly’s rates can be high. Some loans have short repayment terms. This could strain your cash flow.
We picked Credibly for its flexible loan options. They cater to different business needs and sizes.
Credibly works well for small businesses needing quick cash. It’s a good choice if you have less-than-perfect credit.
| Pros | Cons | Funding maximum | Eligibility |
| Fast funding | High rates | $600,000 | 3+ months in business |
| Lower credit scores accepted | Short repayment terms | $15,000+ monthly revenue | |
| Multiple loan options | 500+ credit score |
8. National funding small business loans
National Funding offers small business loans and equipment financing. They provide fast access to funds up to $500,000. You can apply online for their working capital and short-term loans.
This lender has some good points. They have a quick application process. You can get money in as little as 24 hours. They also work with businesses that have lower credit scores.
There are some drawbacks to consider. National Funding’s loans can be expensive. They may have high interest rates and fees. Their loan terms are also quite short, often less than a year.
National Funding stands out for its speed and flexibility. They can help businesses that might struggle to get loans elsewhere. This makes them a solid choice for some small companies.
These loans work well for certain businesses. They’re good if you need cash fast or have less-than-perfect credit. They also fit businesses looking for equipment financing options.
| Pros | Cons | Funding maximum | Eligibility |
| Fast funding | High costs | $500,000 | 6+ months in business |
| Flexible credit requirements | Short terms | $100,000+ annual revenue | |
| Equipment financing available | Daily or weekly payments | 500+ credit score |
9. Balboa Capital business loans
Balboa Capital offers unsecured business loans from $20,000 to $250,000. You can apply online easily and get a decision within an hour during business hours.
If approved, you might get same-day funding. This quick process helps you access cash fast for your business needs.
Balboa Capital provides flexible terms and competitive rates. You can choose a loan term that fits your budget and repayment plans.
The company also offers equipment financing and SBA loans. This gives you more options to fund different aspects of your business.
| Pros | Cons | Funding maximum | Eligibility |
| Fast approval | High interest rates | $250,000 | Varies |
| Same-day funding | Short repayment terms | ||
| Flexible terms |
You might like Balboa Capital for its quick funding and easy application. But keep in mind that their loans may have higher rates and shorter terms than traditional bank loans.
Balboa Capital is a good choice if you need fast cash for your business. It’s best for small businesses that can handle higher payments over a shorter period.
Conclusion
Unsecured business loans offer a practical and accessible way for entrepreneurs to secure the funding they need without the complexities of traditional loans. With fast approval times and no collateral requirements, these loans provide a valuable opportunity for business owners to grow, invest, and adapt quickly in today’s competitive market. By understanding the various loan options available and choosing the right one for their unique needs, entrepreneurs can harness the power of unsecured business loans to drive their ventures forward with confidence and agility.
Create your online store in minutes!
Create your online store in minutes!
Develop and launch your store with 10Web AI Ecommerce Website Builder.
