Can You Get a Startup Business Loan With No Collateral?
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Startup business loans with no collateral, also called unsecured business loans, are not as difficult to find as they once were. In fact, we’ve compiled a list below of nearly a dozen strong options to consider. However, you can expect this type of small-business loan to have higher interest rates, shorter repayment terms or lower maximum lending amounts than secured business loans.
Some startup business loans don’t require collateral on paper, but that doesn’t mean your personal or business assets are off the hook. Instead of collateral, startup funding may require the business owner to sign a personal guarantee or accept a UCC filing — or both. Either way, the lender will have access to your assets if your business is unable to repay its debts.
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How to get a startup business loan with no collateral
Without collateral from the borrower, the lender doesn’t have specific assets available to liquidate in case the borrower defaults on the loan. This, in addition to a short or relatively nonexistent business history, makes startup business loans with no collateral particularly risky for lenders.
To make up for the imbalance, a borrower can highlight their startup’s strengths, supplement them with a solid business plan and be willing to sign a personal guarantee. Meeting minimum annual revenue and time in business requirements, along with having a good personal credit score can also help startups qualify for loans.
However, unsecured startup business loans are typically more expensive for the borrower than secured loans. If a startup doesn’t need funding right away, it might be worth waiting to apply for a loan until it has collateral to offer. Startup business owners can also use the extra time to build their credit and establish their business.
10 startup business loans with no collateral requirement
The providers listed below work with startups that have one year or less of business history, and they don’t require collateral. Equipment financing and invoice financing providers that make this list do not require additional collateral outside of the items that are being financed.
| Product | Max loan amount | Min. credit score | Learn more |
|---|---|---|---|
 Fora Financial - Online term loan NerdWallet Rating Apply now with Fundera by NerdWallet | $1,500,000 | 570 | Apply now with Fundera by NerdWallet |
 Headway Capital - Line of credit NerdWallet Rating Apply now with Fundera by NerdWallet | $100,000 | 625 | Apply now with Fundera by NerdWallet |
 National Funding - Equipment Financing NerdWallet Rating Apply now with Fundera by NerdWallet | $150,000 | 600 | Apply now with Fundera by NerdWallet |
 OnDeck - Online term loan NerdWallet Rating Apply now with Fundera by NerdWallet | $250,000 | 625 | Apply now with Fundera by NerdWallet |
 Accion Opportunity Fund - Small Business Working Capital Loan NerdWallet Rating | $250,000 | 600 | |
 AltLINE - Invoice Factoring NerdWallet Rating | $5,000,000 | 300 | |
 Fundbox - Line of credit NerdWallet Rating | $150,000 | 600 | |
 Wells Fargo Small Business Advantage® Line of Credit NerdWallet Rating | $50,000 | 680 | |
 FundThrough - Invoice Factoring | $10,000,000 | 300 | |
 Kiva U.S. | $15,000 | 300 |
Startup business loan types that don’t require collateral
The right loan for you will depend on lenders’ requirements, repayment term lengths and schedules, how much money your business needs and interest rates. Here are several types of startup business loans with no collateral requirement (though most of these options still involve a personal guarantee and/or a business lien).
Unsecured lines of credit
Most startup-friendly unsecured lines of credit come from online lenders. Some require a minimum of six months in business, while many require one to two years. In rare instances, you’ll find a lender that considers borrowers with less than six months in business, such as Fundbox, which requires just three months in business. Instead of putting collateral on the table, borrowers often have to sign a personal guarantee.
While online business loans have some of the most forgiving eligibility criteria, their interest rates are usually much higher than bank or Small Business Administration loans, and borrowers are sometimes required to make payments each week as opposed to monthly. Still, unsecured lines of credit are among the largest loans on this list — up to $150,000 in some cases.
Microloans
Microloans can be a great option for startups as they also often have more flexible qualification requirements than traditional bank loans. Unlike online business loans, though, microloans typically have competitive interest rates. And while these loan amounts may be smaller than those offered by online business lenders (typically no more than $50,000), many microlenders don’t require collateral.
Personal business loans
Personal loan eligibility generally depends on a borrower’s personal credit history and income. This is good news for startup business owners who don’t meet other lenders’ time in business and annual revenue requirements.
On the downside, personal loans may not let you borrow as much as business loans. Most personal loans max out at $100,000, and some have a much lower cap. You can find unsecured personal loans from banks and online lenders.
Business credit cards
Like personal business loans, business credit cards depend mostly on your personal credit history. While they can help cover everyday purchases and solve short-term cash flow issues, be sure to borrow only what you can pay off each month. Misusing a credit card can not only put your business into a debt cycle that’s hard to break out of, but it can also harm your personal credit if the issuer reports to consumer credit bureaus.
It’s best to pay off the card in full each month, choose a card with a 0% interest introductory period and strategically use your business credit card rewards to cut costs elsewhere.
Self-secured loans
Self-secured loans, like invoice financing and equipment financing, let borrowers use the items being financed as collateral. So while they’re not technically unsecured, they don’t require business owners to offer additional business collateral or pledge personal assets.
Equipment financing could be a viable option for startup owners who need funding to buy essential machinery, while invoice financing is a better fit for business-to-business companies that have been open long enough to have a collection of unpaid invoices.
This type of financing can come from online lenders and banks, and requirements vary from lender to lender.
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