Unsecured Business Loans for Collateral-Free Cash

June 17, 2016 Small Business, Small Business Loans
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Unsecured Business Loans: Where to Find Them and How to Qualify

An unsecured business loan has an attractive advantage over a secured loan: Small-business owners don’t have to put up collateral.
When the loan is secured, assets you use as collateral are at risk — perhaps your home, your business equipment or inventory. If your business goes south and you can’t pay the loan, the lender can take those possessions.

Unsecured loans, on the other hand, place the burden of the risk on the lender. These loans will likely carry a higher APR than secured business loans, but they typically come with higher approval rates and faster funding. Although you don’t need collateral to qualify, you may still need strong business revenue, several years of operating history and fair or better personal credit — though this will depend on the individual lender’s requirements.

Here are five alternative lenders offering unsecured business loans or lines of credit of up to $100,000.


Lending Club: Best among online lenders for unsecured term loans if you want the lowest costs.

OnDeck: Solid choice for an unsecured line of credit for working capital needs and handling unexpected expenses.

StreetShares: Good choice for newer businesses that need smaller amounts of cash.

Kabbage: Can be a smart option if you have bad credit and need a working-capital line of credit fast.

Fundbox: Sound choice if you have unpaid customer invoices and want to avoid a credit check.

Unsecured business loans: Summary of funding options.

If you want a term loan with competitive rates: Lending Club

Lending Club is a good option for strong businesses that want competitive rates. The lender’s APR ranges from 8% to 32%, making its loans slightly more expensive than SBA loans but the lowest among unsecured funding options online. Lending Club also has less stringent requirements than banks, which typically require excellent personal credit and collateral to back loans. The lender requires a minimum 600 credit score and requires collateral only on loans greater than $100,000.

  • Loan amount: $5,000 to $100,000.
  • APR: 8% to 32%.
  • Loan term: 1 to 5 years.
  • Funding time: As fast as 2 days but typically a week or two.
  • Read our Lending Club review.
Get started at Lending Club

Before you apply for a Lending Club loan, find out whether you meet the minimum qualifications.

  • 600+ personal credit score.
  • 2+ years in business.
  • $75,000+ in annual revenue.
  • Own at least 20% of the business.
  • No recent bankruptcies or tax liens.

Lending Club is currently unavailable to borrowers in Iowa and Idaho.

Do I qualify?

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If you need cash for working capital or unexpected expenses: OnDeck

OnDeck’s unsecured business line of credit is a good option for businesses that need working capital to manage cash flow or handle unexpected expenses.

With a credit line, you’ll have access to cash that you can borrow whenever you need it. Each individual draw on the line of credit is repaid weekly over a period of six months, and borrowers can choose to repay sooner to save on interest with no prepayment penalties. OnDeck’s line of credit doesn’t require a lien on your business’s assets, although you still have to sign a personal guarantee, which makes you personally liable for repaying the debt if your business fails to.

  • Loan amount: Up to $100,000.
  • APR: 14% to 40%.
  • Loan term: Repaid weekly.
  • Funding time: As fast as 24 hours but typically a few days.
  • Read our OnDeck review.
Get started at OnDeck

Before you apply for a OnDeck line of credit, find out whether you meet the lender’s minimum qualifications.

  • 600+ personal credit score.
  • 9+ months in business.
  • $75,000+ in annual revenue.
  • No bankruptcies in the last two years.
  • Personal guarantee required.
Do I qualify?

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If you have a newer business and need a smaller loan: StreetShares

StreetShares, a company founded by U.S. military veterans, is a good option for newer businesses.

StreetShares offers term loans of as much as $100,000, with no collateral or liens required. Borrowers should note that the maximum loan you can qualify for is 20% of your annual revenue. For example, if your business makes $300,000 per year, you can qualify for a loan of up to $60,000.

  • Loan amount: $2,000 to $100,000.
  • APR: 9% to 40%.
  • Loan term: 3 to 36 months.
  • Funding time: 1 to 5 days.
  • Read our StreetShares review.
Get started at StreetShares

Before you apply for a StreetShares loan, find out whether you meet the lender’s minimum qualifications.

  • 600+ personal credit score.
  • 1+ year in business.
  • $25,000+ in annual revenue.
  • No bankruptcies in the past three years.

StreetShares is currently unavailable to borrowers in North Dakota or South Dakota.

Do I qualify?

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If you need working capital and have bad credit: Kabbage

Kabbage is a good option for borrowers with bad credit who need fast cash for short-term expenses; the company does not have a minimum credit score to qualify. Funding is fast: Once approved, you can get access to funds immediately or, at most, within a few days. You’ll pay more for it, however, as Kabbage’s loan ranges from 32% to 108% APR. With a short repayment time frame and a higher annual percentage rate, it’s likely not your best option for a large expense, such a new piece of expensive equipment for your company.

Keep in mind that each new draw from the line starts its own six- or 12-month term with its own fee structure, so the cost of borrowing will increase.

  • Loan amount: $2,000 to $100,000.
  • APR: 32% to 108%.
  • Loan term: 6 or 12 months.
  • Funding time: A few minutes to several days.
  • Read our Kabbage review.
Get started at Kabbage

Before you apply for a Kabbage loan, find out whether you meet the minimum qualifications.

  • No minimum personal credit score required.
  • 1+ year in business.
  • $50,000+ in annual revenue.
  • A business checking or online payment platform required.
Do I qualify?

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If you have unpaid invoices and want to avoid a credit check: Fundbox

If you have customers who pay you in 30, 60 or 90 days, Fundbox is a good option for invoice financing. The lender provides an unsecured cash advance (no collateral or personal guarantee required) for up to 100% of the value of your unpaid customer invoices. You can borrow from $500 to $100,000. The company provides instant approval, with funding typically in one to three business days. After receiving the cash advance, you’ll repay it in 12 equal weekly installments, plus a fee. If your customer ends up paying you before then, you can repay the advance in full to save on fees, with no penalties.

  • Loan amount: $500 to $100,000.
  • APR: 13% to 68%.
  • Loan term: Equal repayments over a 12-week period.
  • Funding time: 1 to 3 business days.
  • Read our Fundbox review.
Get started at Fundbox

Before you apply for Fundbox’s invoice financing, find out whether you meet the lender’s minimum qualifications.

  • No minimum personal credit score required.
  • No minimum annual revenue required.
  • Must use online accounting software that can link to Fundbox (such as Quickbooks, FreshBooks, Harvest).
Do I qualify?

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Unsecured business loans: Funding options

Funding options:Good option for: Do you qualify?Loan amount & APR

Term loan

Good personal credit
• Strong businesses
• 600+ personal credit score
• 2+ years in business
• $75,000+ annual revenue
• $5,000 to $100,000
• 8% to 32%
Good personal credit
• Managing cash flow
•Unexpected expenses
• 600+ personal credit score
• $75,000+ annual revenue
• 9+ months in business
• No personal bankruptcies in the past 2 years
• Up to $100,000
• 14% to 40%
Street Shares
Good personal credit
• Newer businesses
• Veterans
• 600+ personal credit score
• $25,000+ annual revenue
• 1+ year in business
• $2,000 to $100,000
• 8% to 40%
Bad personal credit
• Short-term working capital
• Fast cash
• No minimum credit score
• 1+ year in business
• $50,000+ annual revenue
• Must have a business checking or PayPal account
• $2,000 to $100,000
• 32% to 108%
Bad personal credit
• Fast cash
• Invoice financing
• No minimum credit score
• Minimum of six months activity in an online accounting or bookkeeping software application
• $500 to $100,000
• 13% to 68%

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Want to compare more small-business loan options?

NerdWallet has created a comparison tool for the best small-business loans to meet your needs and goals. We gauged lender trustworthiness and user experience, among other factors, and arranged lenders by categories that include your revenue and how long you’ve been in business, so that you know which loans you qualify for.

Compare business loans
Steve Nicastro is a staff writer at NerdWallet, a personal finance website. Email: Steven.N@nerdwallet.com. Twitter: @StevenNicastro.

To get more information on and compare funding options for your small business, visit NerdWallet’s small-business loans page. For free, personalized answers to questions about starting and financing your business, visit theSmall Business section of NerdWallet’s Ask an Advisor page.

This post was updated on June 17, 2016. It was originally published Nov. 10, 2015.

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