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Unsecured Business Line of Credit: What It Is and Best Options

By Randa Kriss
Last updated on January 4, 2024
Edited bySally Lauckner
Fact checked and reviewed

⏰ Estimated read time: 7 minutes

Unsecured business lines of credit don't require physical collateral, but you may have to guarantee your financing in other ways.

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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.
Nevertheless, unsecured credit lines can be a good small-business loan option for newer companies that don’t have sufficient collateral to offer, as well as for those who need fast access to working capital.

How much do you need?

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We’ll start with a brief questionnaire to better understand the unique needs of your business.

Once we uncover your personalized matches, our team will consult you on the process moving forward.

Here are 8 unsecured business lines of credit

LenderNerdWallet RatingMax loan amountMin. credit scoreNext steps

Bank of America Business Advantage Unsecured Line of Credit

5.0/5

Best for Low interest unsecured business lines of credit

Undisclosed700

Wells Fargo BusinessLine® Line of Credit

5.0/5

Best for Unsecured bank business lines of credit

$150,000680

Wells Fargo Small Business Advantage® Line of Credit

5.0/5

Best for Unsecured SBA lines of credit

$50,000680

Headway Capital - Line of credit

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5.0/5

Best for Unsecured business lines of credit for new businesses

$100,000625

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Bluevine - Line of credit

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5.0/5

Best for Fast unsecured business lines of credit

$250,000625

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Fundbox - Line of credit

5.0/5

Best for Unsecured business lines of credit for bad credit

$150,000600

OnDeck - Line of credit

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5.0/5

Best for Unsecured business lines of credit for building credit

$100,000625

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PNC Bank - Unsecured Small Business Line of Credit

Best for PNC customers

$100,000720

Here are 8 unsecured business lines of credit

Best for Low interest unsecured business lines of credit

Bank of America

Max Amount

Undisclosed

Min. Credit Score

700

Best for Unsecured bank business lines of credit

Wells Fargo

Max Amount

$150,000

Min. Credit Score

680

Best for Unsecured SBA lines of credit

Wells Fargo

Max Amount

$50,000

Min. Credit Score

680

Best for Unsecured business lines of credit for new businesses

Headway Capital

Max Amount

$100,000

Min. Credit Score

625

Best for Fast unsecured business lines of credit

Bluevine

Max Amount

$250,000

Min. Credit Score

625

Best for Unsecured business lines of credit for bad credit

Fundbox

Max Amount

$150,000

Min. Credit Score

600

Best for Unsecured business lines of credit for building credit

OnDeck

Max Amount

$100,000

Min. Credit Score

625

Best for PNC customers

PNC Bank

Max Amount

$100,000

Min. Credit Score

720

I'M INTERESTED IN:

Our pick for

Low interest unsecured business lines of credit

Bank of America’s business line of credit offers competitive interest rates, no annual fee and no draw fees. You’ll need to have strong credentials to qualify.

Bank of America Business Advantage Unsecured Line of Credit

Max Loan Amount
Undisclosed
Min. credit score
700
Established businesses with strong credit can access this revolving line of credit, no collateral required.

Max loan

Undisclosed

Min. Credit score

700

Established businesses with strong credit can access this revolving line of credit, no collateral required.

Our pick for

Unsecured bank business lines of credit

Wells Fargo offers unsecured credit lines of up to $150,000 that are a good option for established businesses with strong credit.

Wells Fargo BusinessLine® Line of Credit

Max Loan Amount
$150,000
Min. credit score
680
Est. APR
10.25-18.25%
This Wells Fargo line of credit offers competitive rates for businesses with at least two years in operation.

Max loan

$150,000

Min. Credit score

680

Apr range

10.25-18.25%

This Wells Fargo line of credit offers competitive rates for businesses with at least two years in operation.

Our pick for

Unsecured SBA lines of credit

This SBA-backed unsecured line of credit offers up to $50,000. Borrowers with less than two years in business may be able to qualify.

Wells Fargo Small Business Advantage® Line of Credit

Max Loan Amount
$50,000
Min. credit score
680
Est. APR
13.00-15.00%
Wells Fargo offers an unsecured line of credit that’s designed for borrowers with less than two years in business.

Max loan

$50,000

Min. Credit score

680

Apr range

13.00-15.00%

Wells Fargo offers an unsecured line of credit that’s designed for borrowers with less than two years in business.

Our pick for

Unsecured business lines of credit for new businesses

Headway Capital offers lines of credit of up to $100,000. You may be able to qualify with a minimum of six months in business.

Headway Capital - Line of credit

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Max Loan Amount
$100,000
Min. credit score
625
Est. APR
35.00-80.00%
Headway Capital offers a fast and flexible line of credit for borrowers who may not qualify for more traditional options.

Max loan

$100,000

Min. Credit score

625

Apr range

35.00-80.00%

Headway Capital offers a fast and flexible line of credit for borrowers who may not qualify for more traditional options.

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Our pick for

Fast unsecured business lines of credit

Bluevine provides credit lines up to $250,000. The lender can approve and fund applications in as little as 24 hours.

Bluevine - Line of credit

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Max Loan Amount
$250,000
Min. credit score
625
Est. APR
20.00-50.00%
Bluevine's line of credit provides fast working capital for short-term borrowing needs.
May fund quickly

Max loan

$250,000

Min. Credit score

625

Apr range

20.00-50.00%

Bluevine's line of credit provides fast working capital for short-term borrowing needs.

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Our pick for

Unsecured business lines of credit for bad credit

You may be able to qualify for an Fundbox line of credit with a minimum credit score of 600. Credit lines are available in amounts up to $150,000.

Fundbox - Line of credit

Max Loan Amount
$150,000
Min. credit score
600
Est. APR
36.00-99.00%
Fundbox offers a business line of credit to fill a cash flow gap, and qualifying is easier than with other lenders.
May fund quickly

Max loan

$150,000

Min. Credit score

600

Apr range

36.00-99.00%

Fundbox offers a business line of credit to fill a cash flow gap, and qualifying is easier than with other lenders.

Our pick for

Unsecured business lines of credit for building credit

OnDeck offers a flexible unsecured line of credit in amounts up to $100,000. Responsible spending can help you build your business credit history.

OnDeck - Line of credit

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Max Loan Amount
$100,000
Min. credit score
625
Est. APR
39.90-77.90%
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.
May fund quickly

Max loan

$100,000

Min. Credit score

625

Apr range

39.90-77.90%

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.

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Our pick for

PNC customers

PNC offers an unsecured business line of credit with revolving terms. You’ll need a PNC business checking account to set up credit line payments. Lines of credit may be eligible for overdraft protection for your PNC checking account.

PNC Bank - Unsecured Small Business Line of Credit

Max Loan Amount
$100,000
Min. credit score
720
PNC offers a revolving line of credit that works similarly to a credit card, but you’ll need excellent credit and multiple years in business to qualify.

Max loan

$100,000

Min. Credit score

720

PNC offers a revolving line of credit that works similarly to a credit card, but you’ll need excellent credit and multiple years in business to qualify.

How Much Do You Need?

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What is an unsecured business line of credit?

An unsecured line of credit is not backed by physical collateral like real estate, equipment or inventory. Although you don’t need to provide collateral, your lender will likely require a personal guarantee or Uniform Commercial Code lien in order to mitigate the risk of lending to your business.
A personal guarantee holds you personally responsible for the debt if your business can’t pay and your lender can seize your personal assets to recover its losses. Similarly, a UCC lien gives your lender the right to seize your assets in the event of default. UCC liens can be filed for specific assets, or your lender can file a blanket lien, which covers all of your assets.
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 is backed by specific collateral, such as property or equipment. Lenders may also require a personal guarantee or UCC lien on secured credit lines — in addition to physical collateral.
Providing collateral, however, helps mitigate the risk a lender takes when issuing you a business line of credit. As a result, secured credit lines tend to have lower interest rates, longer repayment terms and larger borrowing amounts compared with unsecured business lines 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 example, the lender may prioritize the value of the products you’re looking to purchase when underwriting your application.
For unsecured business lines of credit, on the other hand, lenders often focus on the credit and financial history of your business.

How to qualify for an unsecured business line of credit

The 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 may accept bad or fair credit scores, banks will likely require good credit.
  • 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 you have, the more likely you are to receive competitive rates and terms.

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 and credit unions. Like many other types of small-business loans, banks and credit unions usually offer the most competitive interest rates and repayment terms, but can have strict qualification requirements.
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. As a tradeoff for speed and flexibility, however, online lenders usually charge higher interest rates.

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? Asking these types of questions can help you determine how much funding is right for your needs.

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 options. As you compare different providers, you’ll want to consider:
  • 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, alternative lender, you may be able to connect your financial accounts directly to the lender’s platform, in lieu of providing certain documents.
Generally, online lenders will offer streamlined applications and fast business loans. Traditional lenders, on the other hand, may require more extensive documentation and have slower funding times. You may also need to visit a branch in person to apply.

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 to sign. This agreement will include information about your credit limit, interest rates, fees, repayment period and renewal terms.
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.

Find the right business loan

The best business loan is generally the one with the lowest rates and most ideal terms. But other factors — like time to fund and your business’s qualifications — can help determine which option you should choose. NerdWallet recommends comparing small-business loans to find the right fit for your business.
Last updated on January 4, 2024

Methodology

NerdWallet’s review process evaluates and rates small-business loan products from both traditional and online lenders.
We collect over 30 data points on each lender, taking into account features we consider to be small-business friendly, including: transparency of rates and terms, flexible payment options, fast funding times, accessible customer service, reporting of payments to business credit bureaus and responsible lending practices.
Each unsecured business line of credit on this list meets the following criteria:
- Maximum loan amount of at least $50,000.
- Transparent rates and repayment terms.
- Funding available within two weeks of applying.
- Personal credit score requirements of 720 or below.
- No more than two years in business required.

Wondering if you qualify?

It’s possible to get a business loan even if you have bad credit. Bad-credit business loans are available from alternative sources, like online or nonprofit lenders.

Learn more

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