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Unsecured Business Loans: Best Options of 2023

Last updated on November 13, 2023
Edited bySally Lauckner
✅Fact checked and reviewed

⏰ Estimated read time: 6 minutes

Unsecured business loans offer fast funding because they don't require physical collateral, but your assets may still be at risk.

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Unsecured business loans don’t require that you put up collateral, such as equipment, inventory or property to get financing. Without collateral, however, lenders often consider your business more of a risk, and therefore charge higher interest rates on your funding.
Nevertheless, these small-business loans can be a good financing choice if your company lacks physical collateral or needs capital fast.

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 9 unsecured business loans

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

Bank of America Business Advantage Unsecured Term Loan

Read Review
5.0/5

Best for Long-term unsecured business loans

$100,000700
Read Review

OnDeck - Online term loan

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5.0/5

Best for Short-term unsecured business loans

$250,000625

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Bluevine - Line of credit

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5.0/5

Best for Fast unsecured business loans

$250,000625

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Wells Fargo Small Business Advantage® Line of Credit

Read Review
5.0/5

Best for Unsecured business lines of credit

$50,000680
Read Review

Fora Financial - Online term loan

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4.5/5

Best for Unsecured business loans for borrowers with bad credit

$1,500,000500

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Fundbox - Line of credit

Read Review
5.0/5

Best for Unsecured business loans for startups

$150,000600
Read Review

Headway Capital - Line of credit

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5.0/5

Best for Easy unsecured business loans

$100,000625

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Accion Opportunity Fund - Small Business Working Capital Loan

Read Review
4.0/5

Best for Unsecured business loans for women and minority groups

$250,000570
Read Review

AltLINE - Invoice Factoring

4.5/5

Best for Unsecured invoice factoring

$10,000,000300

Here are 9 unsecured business loans

Best for Long-term unsecured business loans

Bank of America

Max Amount

$100,000

Min. Credit Score

700

Read Review

Best for Short-term unsecured business loans

OnDeck

Max Amount

$250,000

Min. Credit Score

625

Best for Fast unsecured business loans

Bluevine

Max Amount

$250,000

Min. Credit Score

625

Best for Unsecured business lines of credit

Wells Fargo

Max Amount

$50,000

Min. Credit Score

680

Read Review

Best for Unsecured business loans for borrowers with bad credit

Fora Financial

Max Amount

$1,500,000

Min. Credit Score

500

Best for Unsecured business loans for startups

Fundbox

Max Amount

$150,000

Min. Credit Score

600

Read Review

Best for Easy unsecured business loans

Headway Capital

Max Amount

$100,000

Min. Credit Score

625

Best for Unsecured business loans for women and minority groups

Accion

Max Amount

$250,000

Min. Credit Score

570

Read Review

Best for Unsecured invoice factoring

AltLINE

Max Amount

$10,000,000

Min. Credit Score

300

I'M INTERESTED IN:

Our pick for

Long-term unsecured business loans

Bank of America’s unsecured business loan is available in amounts up to $100,000 with repayment terms ranging from 12 to 60 months.

Bank of America Business Advantage Unsecured Term Loan

5.0
NerdWallet rating 
Read Review
Max Loan Amount
$100,000
Min. credit score
700
Bank of America’s term loan offers competitive interest rates and flexible repayment terms — with no collateral required.
5.0
NerdWallet rating 

Max loan

$100,000

Min. Credit score

700

Bank of America’s term loan offers competitive interest rates and flexible repayment terms — with no collateral required.
Read Review

Our pick for

Short-term unsecured business loans

You can use upfront cash from OnDeck's term loans to make large purchases, then pay the loan back over up to two years.

OnDeck - Online term loan

5.0
NerdWallet rating 
Read Review

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Max Loan Amount
$250,000
Min. credit score
625
Est. APR
35.40-99.90%
OnDeck offers a fast term loan for small-business owners with less-than-stellar credit who want to expand.
May fund quickly
5.0
NerdWallet rating 

Max loan

$250,000

Min. Credit score

625

Apr range

35.40-99.90%

OnDeck offers a fast term loan for small-business owners with less-than-stellar credit who want to expand.
Read Review

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Our pick for

Fast unsecured business loans

Bluevine can approve and fund line of credit applications in as little as 12 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

Wells Fargo’s business line of credit offers competitive interest rates and may be available to companies with less than two years in business.

Wells Fargo Small Business Advantage® 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

Our pick for

Unsecured business loans for borrowers with bad credit

Fora Financial has a minimum credit score requirement of 500 and you can qualify with as little as six months in business.

Fora Financial - Online term loan

4.5
NerdWallet rating 
Read Review

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Max Loan Amount
$1,500,000
Min. credit score
500
Fora Financial can be a good fit for borrowers who may fall short of qualifying for traditional bank financing or young but established small businesses looking for speedy financing.
4.5
NerdWallet rating 

Max loan

$1,500,000

Min. Credit score

500

Fora Financial can be a good fit for borrowers who may fall short of qualifying for traditional bank financing or young but established small businesses looking for speedy financing.
Read Review

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Our pick for

Unsecured business loans for startups

Fundbox makes loans to companies with just 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

Easy unsecured business loans

You may be able to qualify for Headway’s unsecured line of credit with 12 months in business, a minimum annual revenue of $50,000 and a credit score of 600 or higher.

Headway Capital - Line of credit

5.0
NerdWallet rating 

with Fundera by NerdWallet

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.
5.0
NerdWallet rating 

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

Unsecured business loans for women and minority groups

Accion Opportunity Fund offers unsecured business loans of up to $250,000. The lender says 90% of its borrowers are women, people of color and/or low-to-moderate income.

Accion Opportunity Fund - Small Business Working Capital Loan

4.0
NerdWallet rating 
Read Review
Max Loan Amount
$250,000
Min. credit score
570
Est. APR
7.49-29.67%
Accion is a good option for businesses that haven't been able to secure traditional financing. The lender targets its funding efforts toward minority, women and low-to-moderate-income entrepreneurs.
4.0
NerdWallet rating 

Max loan

$250,000

Min. Credit score

570

Apr range

7.49-29.67%

Accion is a good option for businesses that haven't been able to secure traditional financing. The lender targets its funding efforts toward minority, women and low-to-moderate-income entrepreneurs.
Read Review

Our pick for

Unsecured invoice factoring

AltLINE offers business-to-business companies access to cash quickly instead of having to wait for their customers to pay their invoices.

AltLINE - Invoice Factoring

4.5
NerdWallet rating 
Max Loan Amount
$10,000,000
Min. credit score
300
AltLINE offers fast invoice factoring with competitive factoring rates.
4.5
NerdWallet rating 

Max loan

$10,000,000

Min. Credit score

300

AltLINE offers fast invoice factoring with competitive factoring rates.

How Much Do You Need?

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What is an unsecured business loan?

An unsecured business loan is a type of financing that doesn't require you to pledge physical collateral — like business equipment, inventory or real estate — to secure funding. But even though physical collateral is not required, that doesn’t mean you’ll necessarily be off the hook if you can’t repay an unsecured loan: Most are backed by either a personal guarantee or UCC lien.
A personal guarantee holds you personally responsible for the debt if your business cannot pay, and the lender can seize your personal assets to recover their losses in the case of default. A UCC lien gives a lender the right to seize your business assets if you’re unable to repay your loan. Lenders typically file UCC liens with your secretary of state’s office after you sign your loan agreement.
Your lender may file a lien on specific assets, or they might file a blanket lien, which allows them to seize any business assets necessary to recover their losses.
» MORE: Differences between secured and unsecured business loans

How do unsecured business loans work?

Unsecured business loans typically work like other types of debt financing — you apply for a loan, receive funds and pay back what you’ve borrowed over time with interest.
Unsecured business loans typically fund faster than secured loans because the lender doesn’t have to check the value of your collateral. The lack of collateral, however, also makes them riskier for lenders. That’s why unsecured loans usually come with higher interest rates and require a personal guarantee.

Types of unsecured business loans

There are many different types of unsecured business financing, including:

Term loans

Term loans are likely what you imagine when you think of a business loan. These loans are lump sums of capital that you borrow from a lender and repay over a set period of time. Term loans can be a good option if you need to make a specific investment or purchase for your business.

Business lines of credit

Credit lines are a flexible form of financing that allow you to borrow up to a certain limit and only pay interest on the money you borrow. You then repay the funds and continue to draw on the line. Unsecured business lines of credit can be used for working capital, as well as other short-term expenses. These products are also used as emergency funds.

Invoice factoring

Invoice factoring lets you sell your unpaid invoices for cash advances. The factoring company then takes control of your invoices and is responsible for collecting payments from your customers. Although factoring companies may want to see established invoicing practices and a certain amount of time in business, you may not have to provide a personal guarantee — since you’re selling an asset to them directly.

Merchant cash advance

With an MCA, a lender advances you cash based on your sales, and you repay them with a portion of your future sales. This type of financing is usually easier to qualify for than other business loans. Merchant cash advances are risky and expensive, however, and should be treated as an option of last resort.

SBA 7(a) loans

SBA 7(a) loans up to $50,000 may not require collateral. This includes programs such as the SBA 7(a) Small, Express and Export Express programs. However SBA loans do require an unlimited personal guarantee from anyone who owns more than 20% of a business.

Pros and cons of unsecured business loans

Pros

  • Speed. Applications can usually be processed quickly.
  • Collateral not required. You can get financing even if your business doesn’t have many physical assets.
  • Can be easy to qualify. Some lenders offer unsecured business loans to startups and/or businesses with bad credit.

Cons

  • Can be expensive. These loans tend to have higher APRs than those secured by collateral.
  • Assets can still be at risk. You’ll probably have to provide a personal guarantee, which puts your personal assets on the line, or a business lien, which allows a lender to seize the assets your business does have.
  • Less desirable terms. Because lenders consider unsecured debt more risky, you’ll often receive higher interest rates, lower loan amounts and shorter repayment terms than you might receive with secured business loans.
  • Can be difficult to access the best options. Although some lenders will be more flexible with their criteria, others, like banks, will have stricter requirements. You’ll likely need strong financials and credit to get the most competitive unsecured loans.

How to get an unsecured business loan

You may be able to get an unsecured business loan from both traditional financial institutions, like banks and credit unions, and online lenders.
Generally bank loans will offer the most competitive interest rates. However, to qualify for an unsecured loan from a bank, you’ll likely need multiple years in business, strong personal credit and excellent annual revenue.
In comparison, online lenders may have more flexible qualifications and can be faster to fund than traditional lenders. But like banks and credit unions, online lenders may also require a personal guarantee for a business loan without collateral.
» MORE: How to qualify for a small-business loan

Alternatives to unsecured business loans

If you don’t think an unsecured business loan is a good option for your business, you might consider these alternatives:

Business credit cards

If your time in business is too short to qualify for an online business loan, business credit cards for startups are typically available to companies of all ages. Business credit cards offer flexible, unsecured financing that you can use for everyday spending as well as larger purchases, depending on your credit limit. You’ll likely still need to provide a personal guarantee, though.

Small business grants

Small-business grants can be a good option if you want to avoid taking on debt — or can’t yet qualify for affordable financing. It can be time-consuming to find and apply for the right grant for your business — but if you can secure one, you have access to free funds you don’t need to repay.

Crowdfunding

Crowdfunding can also be worth considering if your business doesn’t quite meet traditional loan requirements. You can create a business profile on a crowdfunding platform, like Kickstarter, and publish a funding goal to raise money from the public. Typically, you’ll offer some type of reward or equity in exchange for funds. Crowdfunding can be a particularly good choice for product-based businesses that have an internet following.

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 November 13, 2023

Methodology

NerdWallet reviewed both traditional and online institutions in order to create our list of the best unsecured business loans.
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