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Best Unsecured Business Loans of October 2024

By Randa Kriss
Last updated on October 7, 2024
Edited bySally Lauckner
Fact checked and reviewed
Unsecured business loans can offer fast funding because they don't require physical collateral, but your business and personal assets may still be at risk.

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Unsecured business loans don’t require collateral, such as equipment, inventory or property to get financing. They can be a good choice if your company lacks physical collateral or needs money 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 7 of the best unsecured business loans

LenderNerdWallet RatingMax loan amountMin. credit scoreNext steps

Bank of America Business Advantage Unsecured Term Loan

4.8/5

Best for long-term loans

Undisclosed700
Read Review

OnDeck - Online term loan

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4.7/5

Best for short-term loans

$250,000625

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Bluevine - Line of credit

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5.0/5

Best for fast loans

$250,000625

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Headway Capital - Line of credit

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4.7/5

Best for flexible qualifications

$100,000625

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Fundbox - Line of credit

4.9/5

Best for startups

$150,000600
Read Review

Fora Financial - Online term loan

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4.5/5

Best for borrowers with bad credit

$1,500,000570

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Accion Opportunity Fund - Small Business Working Capital Loan

4.6/5

Best for women- and minority-owned businesses

$250,000570
Read Review

Here are 7 of the best unsecured business loans

Best for long-term loans

Bank of America

Max Amount

Undisclosed

Min. Credit Score

700

Best for short-term loans

OnDeck

Max Amount

$250,000

Min. Credit Score

625

Best for fast loans

Bluevine

Max Amount

$250,000

Min. Credit Score

625

Best for flexible qualifications

Headway Capital

Max Amount

$100,000

Min. Credit Score

625

Best for startups

Fundbox

Max Amount

$150,000

Min. Credit Score

600

Best for borrowers with bad credit

Fora Financial

Max Amount

$1,500,000

Min. Credit Score

570

Best for women- and minority-owned businesses

Accion

Max Amount

$250,000

Min. Credit Score

570

I'M INTERESTED IN:

Our pick for

long-term loans

Bank of America’s unsecured business loan offers competitive interest rates and repayment terms ranging from 12 to 60 months.

Bank of America Business Advantage Unsecured Term Loan

Read Review
Max loan amount
Undisclosed
Min. credit score
700

Pros

  • Bank loan with competitive interest rates.
  • No collateral required.
  • Bank of America’s Preferred Rewards program can offer interest rate discounts and other perks.

Cons

  • Can be slow to fund.
  • Prepayment fees may apply to early repayments.
  • Must be an existing Bank of America customer to apply online.

Bank of America Business Advantage Unsecured Term Loan

NerdWallet rating 
4.8/5
Max loan amount
Undisclosed
Min. credit score
700

Our pick for

short-term 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

Read Review

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Max loan amount
$250,000
Min. credit score
625
Est. APR
27.20-99.90%

Pros

  • Cash can be available within the same business day.
  • 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 Nevada, North Dakota or South Dakota.
  • Requires frequent (daily or weekly) repayments.
  • Interest rates can be high compared with traditional lenders.
  • Requires business lien and personal guarantee.
May fund quickly

OnDeck - Online term loan

NerdWallet rating 
4.7/5
Max loan amount
$250,000
Min. credit score
625
Est. APR
27.20-99.90%
May fund quickly

Our pick for

fast loans

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

Bluevine - Line of credit

Read Review

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Max loan amount
$250,000
Min. credit score
625
Est. APR
20.00-50.00%

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.
  • Requires personal guarantee.
  • Not available in North Dakota, South Dakota or Nevada.
  • Rates can be high compared to traditional lenders.
May fund quickly

Bluevine - Line of credit

NerdWallet rating 
5.0/5
Max loan amount
$250,000
Min. credit score
625
Est. APR
20.00-50.00%
May fund quickly

Our pick for

flexible qualifications

You may be able to qualify for Headway’s unsecured line of credit with six months in business, a minimum annual revenue of $50,000 and a credit score of 625 or higher.

Headway Capital - Line of credit

Read Review

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Max loan amount
$100,000
Min. credit score
625
Est. APR
35.00-80.00%

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

NerdWallet rating 
4.7/5
Max loan amount
$100,000
Min. credit score
625
Est. APR
35.00-80.00%

Our pick for

startups

Fundbox makes loans to companies with just six months in business.

Fundbox - Line of credit

Read Review
Max loan amount
$150,000
Min. credit score
600
Est. APR
36.00-99.00%

Pros

  • Financing available within one business day after approval.
  • Simple application with minimal documentation required.
  • Startup-friendly — accepts borrowers with a minimum of six months in business.
  • Low minimum credit score requirement.
  • No prepayment penalties, account maintenance fees or inactivity fees.

Cons

  • Rates are high compared with traditional banks.
  • May require personal guarantee.
  • Weekly repayments required over a short term (maximum of 24 weeks).
May fund quickly

Fundbox - Line of credit

NerdWallet rating 
4.9/5
Max loan amount
$150,000
Min. credit score
600
Est. APR
36.00-99.00%
May fund quickly

Our pick for

borrowers with bad credit

Fora Financial has a minimum credit score requirement of 570 and you can qualify with as little as six months in business.

Fora Financial - Online term loan

Read Review

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Max loan amount
$1,500,000
Min. credit score
570

Pros

  • Cash can be available quickly.
  • Get a discount for prepaying.
  • No collateral required.
  • Low minimum credit score requirement.

Cons

  • Charges a factor rate that makes it more difficult to compare costs with other lenders.
  • Can’t build business credit.
  • Longest loan term is 18 months.

Fora Financial - Online term loan

NerdWallet rating 
4.5/5
Max loan amount
$1,500,000
Min. credit score
570

Our pick for

women- and minority-owned businesses

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

Read Review
Max loan amount
$250,000
Min. credit score
570
Est. APR
8.49-24.99%

Pros

  • Loan amounts from $5,000 to $250,000.
  • Customized loan terms.
  • No prepayment penalty.

Cons

  • Slower processing speed compared to online lenders.
  • Not available in all U.S. states.

Accion Opportunity Fund - Small Business Working Capital Loan

NerdWallet rating 
4.6/5
Max loan amount
$250,000
Min. credit score
570
Est. APR
8.49-24.99%

How Much Do You Need?

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A closer look at our picks for the best unsecured business loans

Bank of America

Best for long-term loans
Can be a good option if:
  • You have strong personal credit and at least two years in business.
  • You’d like to repay your loan over one year or more.
  • You’re an existing Bank of America customer.
  • You want to build business credit.
May not be a fit if:
  • You’re a startup or have a lower credit score.
  • You need fast access to funds.

OnDeck

Best for short-term loans
Can be a good option if:
  • You want short-term funding for a specific business purpose.
  • You need access to funds in just a few days.
  • You’re a newer business and/or have fair credit.
May not be a fit if:
  • You want a term loan with a monthly repayment schedule.
  • You have less than one year in business.

Bluevine

Best for fast loans
Can be a good option if:
  • You have at least one year in business and good revenue.
  • You’re looking for access to working capital within 24 hours of approval.
  • You want to build business credit.
May not be a fit if:
  • You’re a brand-new business.
  • You want to repay funds over a long period of time.

Headway Capital

Best for flexible qualifications
Can be a good option if:
  • You have at least six months in business.
  • You have bad personal credit.
  • You want fast access to working capital.
May not be a fit if:
  • You need more than $100,000 in funding.
  • You want to build business credit.
  • You don’t want to pay a draw fee on your credit line.

Fundbox

Best for startups
Can be a good option if:
  • You have at least six months in business.
  • You need funding within a few days.
  • You want to build business credit.
  • You don’t want to pay draw or account maintenance fees.
May not be a fit if:
  • You need more than $150,000 in business capital.
  • You want to repay your funds on a monthly basis over a longer period of time.

Fora Financial

Best for borrowers with bad credit
Can be a good option if:
  • You have a personal credit score of at least 570.
  • You want a discount for prepaying your loan.
May not be a fit if:
  • Your monthly revenue is less than $20,000.
  • You want to build business credit.
  • You prefer a longer repayment period (greater than 18 months).

Accion Opportunity Fund

Best for women- and minority-owned businesses
Can be a good option if:
  • You want a loan with competitive interest rates.
  • You have bad personal credit.
  • You’d prefer a longer repayment period (one year or more).
  • You’re a women-, minority- or veteran-owned business.
May not be a fit if:
  • You want funding in less than one week.
  • You have less than a year in operation.

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 isn’t 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 Uniform Commercial Code lien.
A personal guarantee holds you personally responsible for the debt if your business cannot pay, meaning the lender can seize your personal assets to recover its 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 it may file a blanket lien, which allows it to seize any business assets necessary to recover its losses.
You can get an unsecured business loan from banks, credit unions and online lenders. You’ll find the most competitive interest rates through banks and credit unions, while online lenders tend to have more flexible qualification requirements.

Pros and cons of unsecured business loans

Pros

Fast access to funds.

Physical collateral not required.

Startups and borrowers with bad credit may qualify.

Cons

APRs typically higher than secured business loans.

Personal guarantee or UCC lien likely required.

Less desirable terms (e.g., lower loan amounts, shorter repayment terms).

Strong financials and credit often needed to get the most competitive unsecured loans.

How do unsecured business loans work?

Unsecured business funding typically works 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 usually fund faster than secured business 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 may require personal guarantees or UCC liens.

Types of unsecured business loans

There are many different types of unsecured business funding options, including:

Business 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 commonly used as emergency funds.

Invoice factoring

Invoice factoring lets you sell your unpaid invoices for cash advances. The factoring company 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 merchant cash advance company 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.

How to get an unsecured business loan

Follow these steps to get an unsecured business loan:

1. Determine your financing needs

You should consider how much funding you need and how much debt you can afford. NerdWallet’s business loan calculator can help you estimate payments and interest costs.

2. Evaluate your business’s qualifications

If you’re not securing your loan with collateral, your lender will rely more heavily on traditional business loan requirements, such as personal credit score, annual revenue and time in business.
Although online lenders often accept startups and borrowers with bad credit, these businesses may receive higher interest rates. Established businesses with good credit and strong finances will be able to access the most desirable rates and terms.

3. Compare lenders

Research different lenders to find the best choice for your business. As you compare your options, you should think about factors such as maximum loan amounts, interest rates, repayment terms and fees. You’ll also want to consider a lender’s application process, time to funding, customer service and reputation.

🤓 Nerdy Tip

Keep an eye out for predatory lenders who impose unfair or deceitful loan terms on a borrower, and target high-risk borrowers in particular. To avoid these lenders and scams, always look for transparent terms and rates, compare fees to reputable lenders and check to see if the lender reports to one of the three major credit bureaus.

4. Submit an application

Although application requirements vary by lender, you’ll typically need to provide:
  • Basic information about you and your business.
  • Business and personal tax returns.
  • Business and personal bank statements.
  • Financial statements.
Online lenders often expedite the underwriting process by allowing you to connect your financial accounts directly to their platforms. You may be able to get a business loan from an online lender in as little as 24 hours. Banks and credit unions, on the other hand, may take several days, or even weeks.

5. Address lender questions

Sometimes during the review of your application, the lender will want to discuss information you’ve provided or ask for additional documents. Addressing lender questions and providing the information requested quickly can help expedite the review process.
Also, during this time, the lender may provide alternative loan options that you might more easily qualify for. For example, if the lender feels an unsecured loan is too risky, they may suggest you add a cosigner or that you consider a secured business loan.

6. Review loan terms

You’ll receive a business loan agreement after your application is approved. The document will contain the terms of your financing such as loan amount, interest rate, repayment period, payment amounts and schedule. It will also include the interest rate you’ll be charged and any fees that apply.
It’s important to review the agreement carefully to make sure the loan details you discussed with the lender match what’s spelled out in the agreement. If anything is unclear, speak with your lender before you commit to the loan.

How to compare unsecured business loans

Don't be afraid to shop around for a business loan. Comparing offers from a few lenders can help you be sure you're getting the best deal possible. Here are some things to look out for when sizing up unsecured loans for your business:
  • Loan amount. Some lenders may not offer the amount you were hoping for. If you borrow less than what you need to fund your business goals, you may risk falling short of revenue targets, making it harder to pay off the loan.
  • Interest rate and fees. These can vary widely across lenders. That’s why it’s best to compare each loan offer’s APR, which includes both the interest rate and any upfront fees. You can also use our business loan calculator to compare total costs across the life of each loan.
  • Guarantee requirements. While you’re not required to put up a specific business asset as collateral for unsecured loans, you’ll likely be asked to guarantee the loan via a personal guarantee and/or Uniform Commercial Code lien instead. Make sure you know what you’re risking before putting pen to paper. 
  • Repayment terms. How long you have to repay your loan and how often you’re required to make payments all vary from lender to lender. Make sure your business has enough positive cash flow before committing to frequent payment terms or shorter-term loans. And don’t forget to ask about prepayment penalties — these are fees some lenders charge when you make additional payments.

Methodology

🤓 Here's the nerdy science behind how we picked the best unsecured business loans.
NerdWallet’s review process evaluates and rates small-business loans from banks, reputable online lenders and more.
We analyze over 800 data points across lenders using a combination of company websites, public documents, company representatives and by going through lenders’ initial application process ourselves.
NerdWallet writers and editors conduct a full fact check and update our top lists regularly to ensure accuracy and fairness.
While the lenders on this page don’t require specific collateral to secure these loans, all still require a signed personal guarantee and/or file a UCC lien. This means that company or personal assets are still at risk if you default on any of these unsecured business loans.

Here’s how we evaluate each lender

A guide to our star ratings

Lenders that receive a NerdWallet rating of 5 stars are outstanding among their peers. They deliver excellent value and excel at each of our evaluation criteria.
Lenders that earn 4.0 or 4.9 stars are excellent. They provide loans that possess all the standard features you'd expect, but are lacking in one or two areas.
Lenders with a rating of 3.0 or 3.9 stars are a good choice, however, they may be lacking in a few areas.
Lenders that we rate below 3 stars are lacking in several key areas, and we won’t typically recommend them as a first choice to secure a loan.

Frequently asked questions

Last updated on October 7, 2024

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.

See Your Loan Options