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Best Unsecured Business Loans of February 2023

Unsecured business loans offer fast funding because they don't require physical collateral, but your assets may still be at risk.
By Randa Kriss
Last updated on October 4, 2022
Edited byRyan Lane

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Unsecured business loans don’t require collateral like equipment, inventory or property to get financing. Instead, you’ll probably have to sign a personal guarantee — which gives a lender the right to go after your personal assets (think a home, car or cash) if you fail to repay your unsecured debt. Some lenders might place a lien on your business assets, too.
Unsecured loans usually come with higher interest rates than secured ones do. But these small-business loans can be a good choice if your business lacks physical collateral or needs funding fast. Here are our picks for the best unsecured business loans.

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 unsecured business loans

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Lender
NerdWallet Rating
Max loan amount
Min. credit score
Next steps

American Express Business Blueprint™ - Line of credit

on American Express Business Blueprint™'s website

4.5/5

Best for Unsecured business line of credit

$250,000640

on American Express Business Blueprint™'s website

Bluevine - Line of credit

with Fundera by NerdWallet

5.0/5

Best for Fast unsecured business loan

$250,000625

with Fundera by NerdWallet

OnDeck - Line of credit

with Fundera by NerdWallet

5.0/5

Best for Unsecured business line of credit for bad credit borrowers

$100,000625

with Fundera by NerdWallet

Fora Financial - Online term loan

with Fundera by NerdWallet

4.5/5

Best for Unsecured term loan for bad credit borrowers

$1,400,000500

with Fundera by NerdWallet

Fundbox - Line of credit

with Fundera by NerdWallet

5.0/5

Best for Unsecured business loan for startups

$150,000600

with Fundera by NerdWallet

Funding Circle - Online term loan

with Fundera by NerdWallet

5.0/5

Best for Long-term unsecured business loan

$500,000660

with Fundera by NerdWallet

OnDeck - Online term loan

with Fundera by NerdWallet

5.0/5

Best for Short-term unsecured business loan

$250,000625

with Fundera by NerdWallet

Here are 7 unsecured business loans

Best for Unsecured business line of credit

American Express Business Blueprint™

Max Amount

$250,000

Min. Credit Score

640

Best for Fast unsecured business loan

Bluevine

Max Amount

$250,000

Min. Credit Score

625

Best for Unsecured business line of credit for bad credit borrowers

OnDeck

Max Amount

$100,000

Min. Credit Score

625

Best for Unsecured term loan for bad credit borrowers

Fora Financial

Max Amount

$1,400,000

Min. Credit Score

500

Best for Unsecured business loan for startups

Fundbox

Max Amount

$150,000

Min. Credit Score

600

Best for Long-term unsecured business loan

Funding Circle

Max Amount

$500,000

Min. Credit Score

660

Best for Short-term unsecured business loan

OnDeck

Max Amount

$250,000

Min. Credit Score

625

Our pick for

Unsecured business line of credit

The American Express® Business Line of Credit is available to business owners with an average monthly revenue of at least $3,000.

American Express Business Blueprint™ - Line of credit

4.5
NerdWallet rating 
Read Review

on American Express Business Blueprint™'s website

Max Loan Amount
$250,000
Min. credit score
640
American Express Business Blueprint™ loans are a good option for business owners with fair credit who want access to working capital.
4.5
NerdWallet rating 

Max loan

$250,000

Min. Credit score

640

American Express Business Blueprint™ loans are a good option for business owners with fair credit who want access to working capital.
Read Review

on American Express Business Blueprint™'s website

Our pick for

Fast unsecured business loan

Bluevine’s line of credit can fund in as little as 12 hours.

Bluevine - Line of credit

5.0
NerdWallet rating 
Read Review

with Fundera by NerdWallet

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%

Depending on your creditworthiness and your business's financials

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 line of credit for bad credit borrowers

OnDeck is willing to work with borrowers who have credit scores as low as 625, though you may face high APRs.

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
29.90-65.90%
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

29.90-65.90%

Based on loans originated in the half-year ending March 31, 2022

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

Unsecured term loan for bad credit borrowers

Fora Financial has an even lower minimum credit score than OnDeck, and you can qualify with as little as six months in business.

Fora Financial - Online term loan

4.5
NerdWallet rating 
Read Review

with Fundera by NerdWallet

Max Loan Amount
$1,400,000
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

$1,400,000

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

with Fundera by NerdWallet

Our pick for

Unsecured business loan for startups

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

Fundbox - Line of credit

5.0
NerdWallet rating 
Read Review

with Fundera by NerdWallet

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%

Depending on your creditworthiness and your business's financials

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

with Fundera by NerdWallet

Our pick for

Long-term unsecured business loan

Funding Circle offers loans with terms as long as seven years.

Funding Circle - Online term loan

5.0
NerdWallet rating 
Read Review

with Fundera by NerdWallet

Max Loan Amount
$500,000
Min. credit score
660
Est. APR
5.99-16.49%
Funding Circle is an option for established businesses that are financing an expansion or refinancing debt.
May fund quickly
5.0
NerdWallet rating 

Max loan

$500,000

Min. Credit score

660

Apr range

5.99-16.49%

Depending on your creditworthiness and your business's financials

Funding Circle is an option for established businesses that are financing an expansion or refinancing debt.
Read Review

with Fundera by NerdWallet

Our pick for

Short-term unsecured business loan

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

with Fundera by NerdWallet

Max Loan Amount
$250,000
Min. credit score
625
Est. APR
29.90-97.30%
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

29.90-97.30%

Based on loans originated in the half-year ending March 31, 2022

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

with Fundera by NerdWallet

How Much Do You Need?

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What are unsecured business loans?

Unsecured business loans are a type of financing that doesn't require that you 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.

How do unsecured business loans work?

Unsecured business loans 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. But the lack of collateral also makes them riskier for lenders. That’s why unsecured loans usually come with higher interest rates and require a personal guarantee.

Pros and cons of unsecured business loans

The benefits of unsecured business loans include:
  • Applications can usually be processed quickly.
  • You can get financing even if your business doesn’t have many physical assets.
The drawbacks of unsecured business loans include:
  • They tend to have higher APRs than loans secured by collateral.
  • 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.

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.
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.
Government-backed SBA 7(a) loans offered by banks and other lenders may not need collateral if they're less than $25,000. But SBA loans do require an unlimited personal guarantee from anyone who owns more than 20% of a business.
Lenders will typically assess your personal creditworthiness when you apply for a business loan without collateral. They’ll also usually consider how many years you’ve been in business, as well as your annual revenue.

Alternatives to unsecured business loans

Term loans and business lines of credit aren’t the only types of unsecured financing. The following options will likely have less favorable terms than those traditional business loans, but they may be worth considering based on your business’s needs.
If you want to avoid a personal guarantee or business lien: Accounts receivable factoring lets you sell your unpaid invoices for cash advances. Factoring companies may want to see established invoicing practices and a certain amount of time in business, but you likely won’t need to provide a personal guarantee since you’re selling an asset to them directly.
If your time in business is too short to qualify for an online business loan: Business credit cards for startups are typically available to businesses 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.
If you don’t meet other qualification requirements: Merchant cash advances are usually easier to qualify for than business loans. 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 risky and expensive, though, and should be treated as an option of last resort.

Compare small-business loans

For a look beyond unsecured loans, check out NerdWallet’s list of the best small-business loans for business owners. Our recommendations are based on the market scope and track record of lenders, the needs of business owners, and an analysis of rates and other factors, so you can make the right financing decision.
Last updated on October 4, 2022