Some business owners can’t or don’t want to pledge specific assets—personal or business—as security for a business loan. Many traditional lenders require business loans to be supported by collateral, such as real estate or equipment. The best unsecured business loans offer large amounts of funding—quickly—with easy-to-meet qualifications.
Top 5 Unsecured Business Loans
Lender | Best For | Max. Funding |
|---|---|---|
Unsecured short-term funding | $500,000 | |
Unsecured business line of credit | $250,000 | |
Credit line with monthly payments | $250,000 | |
Startup funding | $100,000 | |
Term loan with flexible repayment terms | $500,000 |
*Last Updated: January 2021
How We Evaluated Unsecured Business Loans
In evaluating the best unsecured business loans, we considered a variety of lending options. The desire of some small business owners to access funds without providing specific business or personal assets as collateral was top of our minds. None of the providers we reviewed requires specific assets (e.g., business equipment or a home) as collateral, but most require a personal guarantee.
The providers we reviewed provide two basic types of unsecured business loans: small business lines of credit (LOC) and short-term business loans. With an LOC, borrowers have the flexibility of re-advancing the principal when they pay it back. With a term loan, business owners have longer to repay.
The best unsecured business loans are:
OnDeck: Best Overall Unsecured Business Loan
An OnDeck unsecured business loan is best for prime borrowers (minimum 700 credit score) who might qualify for special interest rates as low as 9% to borrow up to $500,000. Plus, OnDeck is best for unsecured business loans up to $500,000 with credit scores as low as 500. OnDeck offers term loans and an unsecured business line of credit (LOC), and applicants might get both products.
BlueVine: Best Unsecured Business Line of Credit
BlueVine is best for its unsecured business line of credit up to $250,000 and it is also good for businesses with only six months in operation. The minimum qualifications required by BlueVine are competitive, with weekly or monthly repayment options. BlueVine’s pricing is transparent, comparing favorably with others on our list, with as low as 4.8% simple interest per month.
Kabbage: Best for Monthly Repayment Terms
Kabbage offers a $250,000 unsecured business line of credit to help businesses fund working capital, and it is best for borrowers preferring monthly repayment terms. Most of the other providers we reviewed only offer weekly payments. It’s also good for established businesses (one or more years) with lower gross annual revenues ($50,000 per year or $4,200 per month for the past three months).
Fundbox: Best Unsecured Startup Funding
A Fundbox unsecured business line of credit is best for startup businesses. Startup businesses that have been operating for at least six months can potentially qualify for a loan with no collateral to borrow up to $100,000. Recent financial accounting history will primarily be used to qualify applicants for an unsecured line of credit with Fundbox, so good recent performance is a plus.
LoanBuilder: Best for Borrowers Needing Flexibility
LoanBuilder is the best for borrowers needing an unsecured business loan up to $500,000 with flexible terms. This is because borrowers get to choose the repayment period between 13 and 52 weeks. If approved, business owners must make payments weekly. To qualify, applicants need to have been in business for nine or more months, carry a minimum 550 credit score, and have at least $42,000 in annual revenue to qualify.
Bottom Line
With an unsecured business loan, borrowers don’t have to pledge physical assets (e.g., house, business equipment, other real estate) directly to secure the loan. However, most unsecured business loan providers still require a blanket UCC filing on business assets and a personal guarantee. The providers we reviewed are all good unsecured funding options.
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