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

Last updated on May 19, 2023
Edited bySally Lauckner
✅Fact checked and reviewed

⏰ Estimated read time: 5 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 5 unsecured business lines of credit

LenderNerdWallet Rating▼Max loan amount▼Min. credit score▼Next steps

Fundbox - Line of credit

Read Review
5.0/5

Best for Unsecured business lines of credit for new businesses

$150,000600
Read Review

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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OnDeck - Line of credit

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5.0/5

Best for Unsecured business lines of credit for bad credit

$100,000625

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Headway Capital - Line of credit

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5.0/5

Best for Small unsecured business lines of credit

$100,000600

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Wells Fargo - Line of credit

Read Review
5.0/5

Best for Unsecured bank business lines of credit

$50,000680
Read Review

Here are 5 unsecured business lines of credit

Best for Unsecured business lines of credit for new businesses

Fundbox

Max Amount

$150,000

Min. Credit Score

600

Read Review

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

OnDeck

Max Amount

$100,000

Min. Credit Score

625

Best for Small unsecured business lines of credit

Headway Capital

Max Amount

$100,000

Min. Credit Score

600

Best for Unsecured bank business lines of credit

Wells Fargo

Max Amount

$50,000

Min. Credit Score

680

Read Review

Our pick for

Unsecured business lines of credit for new businesses

Fundbox offers lines of credit of up to $150,000. You may be able to qualify with a minimum of six months in business.

Fundbox - Line of credit

5.0
NerdWallet rating 
Read Review
Max Loan Amount
$150,000
Min. credit score
600
Est. APR
10.10-79.80%
Fundbox offers a business line of credit to fill a cash flow gap, and qualifying is easier than with other lenders.
May fund quickly
5.0
NerdWallet rating 

Max loan

$150,000

Min. Credit score

600

Apr range

10.10-79.80%

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

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

5.0
NerdWallet rating 
Read Review

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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
5.0
NerdWallet rating 

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.
Read Review

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Our pick for

Unsecured business lines of credit for bad credit

You may be able to qualify for an OnDeck line of credit with a minimum credit score of 625. Credit lines are available in amounts up to $100,000.

OnDeck - Line of credit

5.0
NerdWallet rating 
Read Review

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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
5.0
NerdWallet rating 

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.
Read Review

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Our pick for

Small unsecured business lines of credit

Headway Capital offers a flexible unsecured line of credit in amounts up to $100,000. And for smaller credit lines — up to $50,000 — the lender does not file a UCC lien.

Headway Capital - Line of credit

5.0
NerdWallet rating 

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Max Loan Amount
$100,000
Min. credit score
600
Est. APR
40.00-80.00%
Headway Capital offers a fast and flexible line of credit for borrowers who may not qualify for more traditional options.
5.0
NerdWallet rating 

Max loan

$100,000

Min. Credit score

600

Apr range

40.00-80.00%

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

Unsecured bank business lines of credit

Wells Fargo’s unsecured business line of credit offers competitive interest rates and funding amounts up to $50,000. Borrowers with less than two years in business may be able to qualify.

Wells Fargo - Line of credit

5.0
NerdWallet rating 
Read Review
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.
5.0
NerdWallet rating 

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.
Read Review

How Much Do You Need?

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What is an unsecured business line of credit?

Unsecured lines of credit are 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.
» MORE: Compare the best startup business lines of credit

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

Unsecured business lines of credit are available from banks, credit unions and online lenders.
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, on the other hand, 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.
» MORE: How to get a business loan

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 May 19, 2023

Methodology

NerdWallet reviewed both traditional and online lenders in order to create our list of the best unsecured business lines of credit.
Our list includes a variety of loan options to meet the diverse funding needs of small-business owners, with an emphasis on lenders that offer a streamlined underwriting and approval process.
Each small-business loan option on our 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 680 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

Frequently Asked Questions