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5 Unsecured Business Loans for Collateral-Free Cash

Steve NicastroApril 7, 2020

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Online lenders provide unsecured business loans that don't require collateral and may be faster to fund than secured loans.

An unsecured business loan has an attractive advantage over a secured loan: You don’t have to put up collateral, such as business equipment, inventory or property, to obtain financing. That means a lender cannot directly seize your assets if you fail to repay the loan.

However, even though an unsecured business loan is not backed by collateral, some lenders may still require you to sign a personal guarantee. A personal guarantee gives a lender the right to go after your personal assets (think a home, car or cash) to recoup the loan if you fail to repay the debt.

Unsecured small-business loans usually carry higher annual percentage rates than secured business loans, but they typically come with faster funding.

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Our picks for

Unsecured loans with no personal guarantee

Kabbage - Line of credit

Kabbage - Line of credit

Est. APR

24.00 - 99.00%

Min. Credit Score

560

Pros

  • Financing up to $250,000 available within a few days.
  • Accepts low credit scores.

Cons

  • Rates are high compared to other online lenders.
  • Must have online checking or PayPal account to verify cash flow.
  • Fixed-fee structure means early repayment does not save interest.

Qualifications

  • Minimum credit score: 560.
  • Minimum time in business: 1 year.
  • Minimum annual revenue: $50,000.
Read full review
Kabbage provides fast loans for business owners with bad personal credit, but rates can be high.
Fundbox - Line of credit

Fundbox - Line of credit

Est. APR

10.10 - 79.80%

Min. Credit Score

550

Pros

  • Cash can be available by the next day.
  • Low minimum credit score requirement.

Cons

  • Rates are high compared to traditional banks.

Qualifications

  • Minimum credit score: 550.
  • Minimum time in business: 3 months.
  • Minimum annual revenue: $50,000.
Read full review
Fundbox offers a business line of credit to fill a cash-flow gap, and qualifying is easier than with other lenders.

Our picks for

Unsecured loans with a personal guarantee

OnDeck - Line of credit

OnDeck - Line of credit

Est. APR

13.99 - 63.00%

Min. Credit Score

600

Pros

  • Cash can be available within the same business day.
  • Requires low minimum credit score.
  • Less paperwork than most lenders.

Cons

  • Fixed-fee structure means early repayment will not save interest.
  • Requires weekly repayments.
  • Requires personal guarantee.

Qualifications

  • Minimum credit score: 600.
  • Minimum time in business: 3 years.
  • Minimum annual revenue: $250,000.
  • No bankruptcies in the past 2 years.
Read full review
OnDeck offers a fast line of credit for small-business owners with less-than-stellar credit who need to manage cash flow or buy inventory.
BlueVine - Line of credit

BlueVine - Line of credit

Est. APR

15.00 - 78.00%

Min. Credit Score

650

Pros

  • Cash can be available within 12 to 24 hours.
  • Multiple products for different financing needs

Cons

  • Short repayment term results in higher payment amounts.
  • Requires personal guarantee.
  • Not available in North Dakota, South Dakota or Vermont.

Qualifications

  • 6-month line of credit
  • Minimum credit score: 650.
  • Minimum time in business: 36 months.
  • Minimum annual revenue: $100,000.
  • 12-month line of credit
  • Minimum credit score: 650.
  • Minimum time in business: 3 years.
  • Minimum annual revenue: $480,000.
Read full review
BlueVine's line of credit provides fast working capital for short-term borrowing needs.
BlueVine - Invoice factoring

BlueVine - Invoice factoring

Est. APR

15.00 - 68.00%

Min. Credit Score

530

Pros

  • Finances larger invoices.
  • Cash can be available within the same day.
  • Accepts low minimum credit score and short time in business.

Cons

  • Not for businesses that do not invoice on net terms.
  • Loan amount is tied to the value of your invoices.
  • Dependency on customers to pay their bills on time.

Qualifications

  • Minimum credit score: 530.
  • Minimum time in business: 3 months.
  • Minimum annual revenue: $100,000.
Read full review
BlueVine’s invoice factoring works best for financing larger invoices, but only if your customers reliably pay on time.

Easily get real, personalized small business loan rates to compare — not just ranges or estimates.

It’s free and won’t affect your credit.

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Summary of Unsecured Business Loans for Collateral-Free Cash

Unsecured business loans with no personal guarantee

Kabbage is a good option for borrowers with bad credit who need fast cash for short-term expenses. The company requires a minimum credit score of 560. Once approved, you can get access to funds immediately or, at most, within a few days. With a short repayment period and a higher APR, this is likely not your best option for a large expense, such as a costly piece of new equipment for your company.

Fundbox is a better choice for businesses that need short-term working capital, because the lender provides a line of credit up to $100,000. Borrowings on the line of credit are repaid weekly for 12 or 24 weeks, and funding is as fast as the next business day. Qualifying requires a minimum $50,000 annual revenue and three months in business.

StreetShares requires only one year in business. You’ll need a minimum credit score of 600 and at least $75,000 in revenue to qualify for its term loan or line of credit.

Borrowers should keep in mind one caveat: The maximum loan or line of credit you can qualify for is 20% of your annual revenue. For example, a business earning $300,000 annually can qualify for financing up to $60,000.

Unsecured business loans with a personal guarantee

OnDeck’s unsecured business line of credit is a good option for business owners who need working capital to manage cash flow or handle unexpected expenses. Its APRs range from 11% to 63%, and its requirements are less stringent than some of its online competitors. You’ll need a minimum 600 credit score to qualify, and at least a year of business history and $100,000 in annual revenue.

OnDeck’s line of credit doesn’t require a lien on your business’s assets, although you still have to sign a personal guarantee, which makes you liable for repaying the debt if your business fails to repay.

BlueVine offers an unsecured line of credit with APRs that range from 15% to 78%. The line of credit maxes out at $250,000, which provides a little more wiggle room for larger purchases. They also come in either six- or 12-month terms, though the 12-month option is harder to qualify for. And they’re fast — it takes up to 12 hours to be approved for a line of credit, and once approved, you can receive funding within 24 hours.

BlueVine also has an invoice financing product. BlueVine will front you 85% to 90% of your outstanding invoice, then the rest (minus fees) once your customer pays you. It’s a good option if you have strong revenue and need to finance large invoices.

Find and compare small-business loans

NerdWallet has created a comparison tool for the best small-business loans to meet your needs and goals. We gauged lender trustworthiness and user experience, among other factors, and arranged lenders by categories that include your revenue and how long you’ve been in business, so that you know which loans you qualify for.

Last updated on April 7, 2020

To recap our selections...

NerdWallet's Unsecured Business Loans for Collateral-Free Cash