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Best Unsecured Business Loans of July 2024

By Randa Kriss
Last updated on July 15, 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. Without collateral, however, lenders often consider offering capital to your business more of a risk, and may charge higher interest rates on your loan.
However, 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 RatingMax loan amountMin. credit scoreNext steps

Bank of America Business Advantage Unsecured Term Loan

5.0/5

Best for Long-term unsecured business loans

Undisclosed700
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

5.0/5

Best for Unsecured business lines of credit

$50,000680
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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Fundbox - Line of credit

5.0/5

Best for Unsecured business loans for startups

$150,000600
Read Review

Fora Financial - Online term loan

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4.5/5

Best for Unsecured business loans for borrowers with bad credit

$1,500,000570

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Accion Opportunity Fund - Small Business Working Capital Loan

5.0/5

Best for Unsecured business loans for women and minority groups

$250,000570
Read Review

Credibly Merchant Cash Advance

Best for Unsecured business loans with no personal guarantee

$600,000500

Here are 9 unsecured business loans

Best for Long-term unsecured business loans

Bank of America

Max Amount

Undisclosed

Min. Credit Score

700

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

Best for Easy unsecured business loans

Headway Capital

Max Amount

$100,000

Min. Credit Score

625

Best for Unsecured business loans for startups

Fundbox

Max Amount

$150,000

Min. Credit Score

600

Best for Unsecured business loans for borrowers with bad credit

Fora Financial

Max Amount

$1,500,000

Min. Credit Score

570

Best for Unsecured business loans for women and minority groups

Accion

Max Amount

$250,000

Min. Credit Score

570

Best for Unsecured business loans with no personal guarantee

Credibly

Max Amount

$600,000

Min. Credit Score

500

I'M INTERESTED IN:

Our pick for

Long-term unsecured business 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

Max Loan Amount
Undisclosed
Min. credit score
700
Bank of America’s term loan offers competitive interest rates and flexible repayment terms — with no collateral required.

Max loan

Undisclosed

Min. Credit score

700

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

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

Read Review

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Max Loan Amount
$250,000
Min. credit score
625
Est. APR
27.20-99.90%
OnDeck offers a fast term loan for small-business owners with less-than-stellar credit who want to expand.
May fund quickly

Max loan

$250,000

Min. Credit score

625

Apr range

27.20-99.90%

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

Read Review

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Max Loan Amount
$250,000
Min. credit score
625
Est. APR
20.00-50.00%
Bluevine's 26-week 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 26-week 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

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

Easy unsecured business loans

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%
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.
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

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 loans 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
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.

Max loan

$1,500,000

Min. Credit score

570

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 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

Max Loan Amount
$250,000
Min. credit score
570
Est. APR
8.49-24.99%
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.

Max loan

$250,000

Min. Credit score

570

Apr range

8.49-24.99%

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.

Our pick for

Unsecured business loans with no personal guarantee

Credibly doesn’t require you to sign a personal guarantee to get a merchant cash advance. Like all MCAs, however, this product may be expensive.

Credibly Merchant Cash Advance

Max Loan Amount
$600,000
Min. credit score
500
Credibly offers fast, flexible funding with low starting factor rates.

Max loan

$600,000

Min. Credit score

500

Credibly offers fast, flexible funding with low starting factor rates.

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 unsecured business loans
Bank of America’s unsecured business loan has competitive rates and loan terms that go up to 60 months, making it a good option for larger purchases that can be paid off over a long term.
It’s best for established businesses that have strong credit and want to avoid pledging high-value assets as collateral on a business loan. Certain benefits — such as the ability to apply online — are available to those who already hold accounts with Bank of America.

OnDeck

Best for short-term unsecured business loans
OnDeck’s online business loan offers terms up to 24 months, with lower credit score and time in business requirements than traditional lenders. Due to the high payment frequency though (daily or weekly), this short-term loan option is best for businesses that have steady cash flow but can’t qualify with traditional lenders for other reasons, like time in business or personal credit score.
Though there’s no specific collateral requirement, it’s important to note that your loan will be secured by a general lien.

Bluevine

Best for fast unsecured business loans
Bluevine is an online lender that offers business funding up to $250,000, with a minimum credit score requirement of only 625. If you are approved, funds can be available to you in as little as 24 hours, which can make a huge difference if you’re in need of cash to cover a payment, or you’re trying to capitalize on a time-sensitive opportunity.
Speed aside, it’s prudent to make sure you know what you’re getting into with a loan from Bluevine. Payments may be as frequent as every week, and even though there’s no collateral requirement, your loan will be secured by a personal guarantee, which can put your personal finances at risk if you default.

Wells Fargo

Best for unsecured business lines of credit
Wells Fargo’s Small Business Advantage Line of Credit is available to borrowers who have been in business for less than two years, with credit scores of at least 680. The line of credit is backed by the SBA, so businesses must meet other SBA standard requirements; however, the competitive rates make it a top choice for startup businesses.

Headway Capital

Best for easy unsecured business loans
Headway Capital’s line of credit requires only six months in business, a 625 minimum credit score and $4,200 in monthly revenue — making it an ideal option for startup businesses. The tradeoffs involve higher rates and draw fees; however, if approved, you can be funded as quickly as the following business day. Unlike other startup options, Headway will also work with you on repayment terms and payment options — terms can be up to 24 months and you can choose whether monthly or weekly payments work best for your business model.

Fundbox

Best for unsecured business loans for startups
Fundbox offers another startup-friendly unsecured line of credit to businesses that have only been in business for six months and have credit scores as low as 600. Like many online lenders, you can be funded very quickly after approval; however, you’ll also find higher rates, short terms and frequent payments, which can put your business at risk of default if you’re not careful.

Fora Financial

Best for unsecured business loans for borrowers with bad credit
Fora Financial will fund your business up to $1.5 million, even if your credit score is below 600 and you’ve only been in business for six months. This is a great option for businesses that have strong cash flow and are making a large purchase. Though you’ll get a discount for prepaying your loan, Fora uses factor rates that can often turn out to cost much more when compared to other lenders, and the longest term is less than two years, which means your monthly payments will likely be high.

Accion Opportunity Fund

Best for unsecured business loans for women and minority groups
Accion Opportunity Fund is a nonprofit community development financial institution (CDFI) whose mission is to provide access to capital for traditionally underserved communities of business owners, including women and minorities. They offer loans up to $250,000 with competitive rates, and are a good option for business owners that can’t qualify for traditional funding, or are wary of working with traditional lenders.
Though there are no collateral requirements, Accion does require a personal guarantee, which means that your personal finances may be at risk if you default on the business loan.

Credibly

Best for unsecured business loans with no personal guarantee
Most unsecured loans still require a personal guarantee, which can put your personal assets at risk if things go awry with your business. If avoiding a personal guarantee is your main concern, you may opt for a merchant cash advance. Credibly has a minimum credit score requirement of 500 and only needs six months in business; however, daily repayments are required and Credibly uses factor rates that can make it difficult to compare rates to other lenders.

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 Uniform Commercial Code 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, based on the Uniform Commercial Code, 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.

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 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 financing, 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 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 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 four 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. A 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

You’ll want to 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 that you provide 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 will 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.

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:
  • SBA loans. SBA loans are partially guaranteed by the U.S. Small Business Administration and issued by banks and credit unions. These loans offer long repayment terms and low interest rates. Although all SBA loans require a personal guarantee, you may not need to provide physical collateral for SBA 7(a) loans of $50,000 or less. You will, however, likely need good credit and strong finances to qualify.
  • 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.

Frequently asked questions

Last updated on July 15, 2024

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 and our editorial guidelines.

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