Unsecured Business Line of Credit: What It Is and Best Options
Unsecured business lines of credit don't require physical collateral, but you may have to guarantee your financing in other ways.
An unsecured business line of credit doesn’t require you to put up physical collateral, like inventory or equipment, to access financing. Because you’re not providing this type of security, however, lenders might consider you more of a risk — and as a result, charge higher interest rates.
Still, unsecured credit lines can be a good small-business loan
Our top picks for unsecured business lines of credit include:
- Best for fast funding: Bluevine.
- Best for bank lines of credit: Wells Fargo.
- Best for new businesses : Headway Capital.
Below, you’ll find our full list of the best unsecured business lines of credit, plus information on how to choose the right option for your needs.
Why trust NerdWallet
Max loan amount
$250,000
Min. credit score
625
Min. annual revenue
$120,000
See Your Loan Options with Fundera by NerdWallet
Pros
- Cash can be available within 12 to 24 hours.
- Can be used to build business credit.
- Low minimum credit score requirement.
Cons
- Requires weekly payments.
- Not available in North Dakota, South Dakota or Nevada.
- Rates can be high compared with traditional lenders.
Bluevine - Line of credit
Best for Fast funding
Max loan amount
$250,000
Min. credit score
625
Min. annual revenue
$120,000
with Fundera by NerdWallet
Pros
- Cash can be available within 12 to 24 hours.
- Can be used to build business credit.
- Low minimum credit score requirement.
Cons
- Requires weekly payments.
- Not available in North Dakota, South Dakota or Nevada.
- Rates can be high compared with traditional lenders.
Max loan amount
$100,000
Min. credit score
625
Min. annual revenue
$100,000
with Fundera by NerdWallet
Pros
- Fast access to working capital.
- Accepts borrowers with a minimum credit score of 625.
- Streamlined application process with minimal documentation required.
- Can be used to build business credit.
Cons
- Not available in North Dakota.
- May require frequent weekly payments.
- Interest rates can be high compared with traditional lenders.
OnDeck - Line of credit
Best for Building business credit
Max loan amount
$100,000
Min. credit score
625
Min. annual revenue
$100,000
with Fundera by NerdWallet
Pros
- Fast access to working capital.
- Accepts borrowers with a minimum credit score of 625.
- Streamlined application process with minimal documentation required.
- Can be used to build business credit.
Cons
- Not available in North Dakota.
- May require frequent weekly payments.
- Interest rates can be high compared with traditional lenders.
Max loan amount
$150,000
Min. credit score
680
Min. annual revenue
Undisclosed
with Fundera by NerdWallet
Pros
- Bank line of credit with competitive interest rates.
- Revolving credit line with no scheduled annual review.
- No collateral required; no prepayment penalties.
Cons
- Must be an established business with strong credit to qualify.
- May take longer to fund than online lenders.
- Annual fee and inactivity fees may apply.
Wells Fargo BusinessLine® Line of Credit
Best for Bank lines of credit
Max loan amount
$150,000
Min. credit score
680
Min. annual revenue
Undisclosed
with Fundera by NerdWallet
Pros
- Bank line of credit with competitive interest rates.
- Revolving credit line with no scheduled annual review.
- No collateral required; no prepayment penalties.
Cons
- Must be an established business with strong credit to qualify.
- May take longer to fund than online lenders.
- Annual fee and inactivity fees may apply.
Max loan amount
$250,000
Min. credit score
600
Min. annual revenue
$30,000
with Fundera by NerdWallet
Pros
- Financing available within two business days after approval.
- Simple application with minimal documentation required.
- Low minimum credit score, time in business and annual revenue requirements.
- No prepayment penalties, account maintenance fees or inactivity fees.
Cons
- Rates are high compared with traditional banks.
- Weekly repayments required over a short term (maximum of 24 weeks).
Fundbox - Line of credit
Best for Bad credit
Max loan amount
$250,000
Min. credit score
600
Min. annual revenue
$30,000
with Fundera by NerdWallet
Pros
- Financing available within two business days after approval.
- Simple application with minimal documentation required.
- Low minimum credit score, time in business and annual revenue requirements.
- No prepayment penalties, account maintenance fees or inactivity fees.
Cons
- Rates are high compared with traditional banks.
- Weekly repayments required over a short term (maximum of 24 weeks).
Pros
- Revolving bank line of credit with competitive interest rates.
- No collateral required.
- No draw fees.
Cons
- Must be an established business with strong credit to qualify.
- Can be slow to fund.
- Must be an existing Bank of America customer to apply online.
- Prepayment fees may apply to early repayments.
Bank of America Business Advantage Unsecured Line of Credit
Best for Low interest rates
Max loan amount
Undisclosed
Min. credit score
700
Min. annual revenue
$100,000
Pros
- Revolving bank line of credit with competitive interest rates.
- No collateral required.
- No draw fees.
Cons
- Must be an established business with strong credit to qualify.
- Can be slow to fund.
- Must be an existing Bank of America customer to apply online.
- Prepayment fees may apply to early repayments.
Pros
- Bank line of credit (backed by the SBA) with competitive interest rates.
- No annual fee or prepayment penalties.
- Available to borrowers with less than two years in business.
- Does not charge an origination fee.
Cons
- May take longer to fund than online lenders.
- Credit lines only available up to $50,000.
- Need a Wells Fargo checking account to access online bill pay.
Wells Fargo Small Business Advantage® Line of Credit
Best for SBA lines of credit
Max loan amount
$50,000
Min. credit score
680
Min. annual revenue
Undisclosed
Pros
- Bank line of credit (backed by the SBA) with competitive interest rates.
- No annual fee or prepayment penalties.
- Available to borrowers with less than two years in business.
- Does not charge an origination fee.
Cons
- May take longer to fund than online lenders.
- Credit lines only available up to $50,000.
- Need a Wells Fargo checking account to access online bill pay.
Max loan amount
$100,000
Min. credit score
625
Min. annual revenue
$50,000
with Fundera by NerdWallet
Pros
- Flexible qualification requirements.
- No prepayment penalties.
- Funds available by next business day after approval.
Cons
- Most borrowers are subject to a 2% draw fee.
- Not available in all U.S. states.
Headway Capital - Line of credit
Best for New businesses
Max loan amount
$100,000
Min. credit score
625
Min. annual revenue
$50,000
with Fundera by NerdWallet
Pros
- Flexible qualification requirements.
- No prepayment penalties.
- Funds available by next business day after approval.
Cons
- Most borrowers are subject to a 2% draw fee.
- Not available in all U.S. states.
Pros
- Bank line of credit with competitive interest rates.
- Streamlined application and underwriting process.
- Monthly repayments with no set term.
Cons
- Requires high minimum credit score and multiple years in business.
- Businesses in certain states and industries are ineligible.
PNC Bank - Unsecured business line of credit
Best for Established businesses
Max loan amount
$100,000
Min. credit score
720
Min. annual revenue
$100,000
Pros
- Bank line of credit with competitive interest rates.
- Streamlined application and underwriting process.
- Monthly repayments with no set term.
Cons
- Requires high minimum credit score and multiple years in business.
- Businesses in certain states and industries are ineligible.
What is an unsecured business line of credit?
An unsecured line of credit is not backed by physical collateral
A personal guarantee UCC lien
Not all lenders file liens on their borrowers, but it’s less likely that you’ll find an unsecured business line of credit without a personal guarantee.
How does an unsecured business line of credit work?
An unsecured business line of credit works like any other credit line. You can draw from a set limit of funds and only pay interest on the funds you borrow. Then, you repay what you’ve borrowed over time and can continue to draw on the line — provided you make your payments on time and don’t exceed your credit limit.
Secured vs. unsecured business line of credit
The main difference between a secured and unsecured business line of credit is the use of collateral.
A secured business line of credit
Providing collateral, however, helps mitigate the risk a lender takes when issuing you a business line of credit
In certain circumstances, secured lines of credit can be easier to qualify for, as lenders can rely on the value of your collateral, even if you’re a startup or don’t have perfect credit.
If you’re trying to get an inventory loan
For unsecured business lines of credit, on the other hand, lenders often focus on the credit and financial history of your business.
💬 Business Lines of Credit: Only pay interest on what you use
Business lines of credit are a great option for business owners who are looking for flexible funding. Lines of credit can cover unexpected expenses and allow recipients to only pay interest on what they borrow.
By connecting businesses with trusted lenders in our network, our in-house sales experts have helped secure $947 million in lines of credit for borrowers. Get started today and let us do the heavy lifting for you.
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— Mike Ross, NerdWallet Business Loans Team Lead
Pros and cons of an unsecured business line of credit
Pros
No physical collateral required.
Fast approval times.
Startups and borrowers with bad credit may qualify.
Cons
Possible higher rates and less favorable terms than secured lines of credit.
Lower credit limits than secured lines of credit.
Unsecured business line of credit requirements
The unsecured business line of credit requirements you’ll need to meet will vary based on your lender. In general, however, lenders will consider similar criteria, such as:
- Personal credit score. You’ll typically need to have a minimum credit score of 600 or higher to qualify for an unsecured business line of credit. Although
online lenders - Annual revenue. Most lenders have a minimum monthly or annual revenue requirement. This requirement can range anywhere from $50,000 to $250,000 per year, or more.
- Time in business. Lenders want to be able to see that you can successfully manage and sustain your company. You’ll usually need at least six months in business to qualify.
- Financial history. Unsecured business line of credit lenders will use your bank statements, other financial accounts and financial statements (e.g., balance sheets, cash flow statements) to evaluate your ability to repay potential debt.
If you qualify for a credit line, your lender will also use these factors to determine your credit limit, interest rates and repayment period. The stronger business credentials
Where to get an unsecured business line of credit
Banks and credit unions
Unsecured business lines of credit are available from traditional lenders, like banks credit unions types of small-business loans
You’ll likely need good credit, strong finances and, in most cases, a few years in business, to get an unsecured credit line from a bank.
If you have a previous relationship with one of these institutions, you might start by contacting it to see what options are available. Smaller, community banks and credit unions can also be a good choice, as they’re more likely to approve loan applications compared with larger banks.
It’s important to keep in mind, however, that these lenders tend to have slow funding processes.
Online lenders
Unsecured business lines of credit are also available from a variety of online lenders. Unlike more traditional financial institutions, online lenders typically offer fast, simple financing. Certain lenders can even approve and fund applications in as little as 24 hours.
These companies often have flexible eligibility criteria, and some are willing to work with startups and/or borrowers with bad credit
Average interest rate on an unsecured business line of credit
The average interest rate factor rate
In this case, you’ll want to calculate these rates into an annual percentage rate (which includes additional fees, e.g. draw fees, origination fees
How to get an unsecured business line of credit
To get an unsecured business line of credit, you can follow these steps:
1. Decide how much funding you need
Think about why you need a business line of credit and what you’re going to use it for. Are you planning to purchase inventory — or are you looking for an emergency fund
2. Evaluate your business’s credentials and make sure you can qualify
Although unsecured business line of credit requirements will vary by lender, most companies will consider your personal credit score, annual revenue and time in business during the underwriting process.
It’s important to remember that lenders are more likely to prioritize your credit and financial history with unsecured credit lines, as you’re not backing your funding with physical collateral.
3. Research and compare line of credit lenders.
Once you have an understanding of your funding needs and qualifications, you can start researching small-business lender
- Maximum credit line amounts.
- Interest rates and additional fees.
- Repayment terms and renewal periods.
- Personal guarantee and/or UCC lien requirements.
- Funding speed.
- Application process.
- Customer service and lender reputation.
Keep in mind that not all lenders will offer an unsecured business line of credit. If you’re unsure if a credit line is unsecured or secured, it will be helpful to reach out to the lender directly for more information.
4. Gather your documentation and submit an application
When you apply for an unsecured business line of credit, you’ll likely need to provide some, if not all, of the following:
- Basic information about you and your business.
- Business and personal bank statements.
- Business and personal tax returns.
- Business financial statements.
If you’re working with an online, private business lender
Generally, online lenders will offer streamlined applications and fast business loans
5. Review and sign your loan agreement
After you’ve been approved for an unsecured line of credit, your lender will provide you with a business loan agreement
You should review the agreement thoroughly and make sure you understand all of the terms and conditions before signing. If you have any questions or need clarification, you can reach out to your lender for assistance.
Frequently asked questions
Can you get an unsecured business line of credit for a new business?
Which banks offer unsecured business lines of credit?
How hard is it to get an unsecured business line of credit?
What credit score do you need for an unsecured business line of credit?
Methodology
NerdWallet’s review process evaluates and rates small-business loan products from traditional banks and online lenders. We collect over 30 data points on each lender using company websites and public documents. We may also go through a lender’s initial application flow and reach out to company representatives. NerdWallet writers and editors conduct a full fact check and update annually, but also make updates throughout the year as necessary.
Our star ratings award points to lenders that offer small-business friendly features, including:
-Transparency of rates and terms.
-Flexible payment options.
-Fast funding times.
-Accessible customer service.
-Reporting of payments to business credit bureaus.
-Responsible lending practices.
We weigh these factors based on our assessment of which are the most important to small-business owners and how meaningfully they impact borrowers’ experiences.
NerdWallet does not receive compensation for our star ratings. Read more about our ratings methodology for small-business loans editorial guidelines