An unsecured business loan has an attractive advantage over a secured loan: You don’t have to put up collateral, such as business equipment, inventory or property, to obtain financing in the first place. That means a lender cannot directly seize your assets if you fail to repay the loan.
However, even though an unsecured business loan is not backed by collateral, some lenders may still require you to sign a personal guarantee. A personal guarantee gives a lender the right to go after your personal assets (think a home, car or cash) to recoup the loan if you fail to repay the debt.
Unsecured small business loans are likely to carry a higher annual percentage rate than secured business loans, but they typically come with faster funding.
Here are our recommendations for the best unsecured business loans for you:
Unsecured business loans with no personal guarantee: Kabbage, Fundbox and StreetShares
Kabbage is a good option for borrowers with bad credit who need fast cash for short-term expenses. The company requires a minimum credit score of 560. Once approved, you can get access to funds immediately or, at most, within a few days. With a short repayment time frame and a higher APR, this is likely not your best option for a large expense, such as a costly piece of new equipment for your company.
- Loan amount: $2,000 to $250,000.
- APR: 24% to 99%.
- Loan term: 6, 12 or 18 months.
- Funding time: A few minutes to several days.
- Read our Kabbage review.
Fundbox is a better choice for businesses that need short-term working capital, because the lender provides a line of credit up to $100,000. Borrowings on the line of credit are repaid weekly for up to 12 weeks, and funding is as fast as the next business day. Qualifying requires a minimum $50,000 annual revenue and three months in business.
If you have unpaid customer invoices, Fundbox also offers invoice financing. There’s no credit check or minimum annual revenue requirements, but you must use online accounting software that can link to Fundbox, such as QuickBooks, FreshBooks or Harvest.
Fundbox provides an unsecured cash advance — no collateral or personal guarantee required — for up to 100% of the value of your invoices. Funding typically comes through in one to three business days. After receiving the cash advance, you’ll repay it in 12 or 24 equal weekly installments, plus a fee. If your customer pays you before then, you can repay the advance in full to save on fees, with no penalties.
Line of Credit
- Loan amount: $1,000 to $100,000
- APR: 10.1% to 79.8%
- Loan term: 12 weeks
- Funding time: As fast as next business day
- Read our Fundbox review
- Loan amount: $1,000 to $100,000.
- APR: 10.1% to 68.7% for 12 weeks; 11.4% to 78.6% for 24 weeks.
- Loan term: Equal repayments over a 12- or 24-week period.
- Funding time: As fast as the next business day.
- Read our Fundbox review.
StreetShares is an option if you haven’t built up much of a business history, because the lender requires only one year in business. You’ll also need a minimum credit score of 600 and at least $75,000 in revenue to qualify.
Borrowers should keep in mind one caveat: The maximum loan or line of credit you can qualify for is 20% of your annual revenue. For example, a business earning $300,000 annually can qualify for financing up to $60,000.
- Loan amount: $2,000 to $250,000 for term loans; $5,000 to $250,000 for standard line of credit; Up to $2 million for invoice factoring and government contract financing
- APR: 9% to 40%; 1% to 5.5% for select products
- Loan term: 3 to 36 months
- Funding time: 1 to 5 days
- Read our StreetShares review
Unsecured business loans with a personal guarantee: OnDeck, Lending Club and BlueVine
OnDeck’s unsecured business line of credit is a good option for business owners who need working capital to manage cash flow or handle unexpected expenses. Its APRs run 11% to 60.8%, and its requirements are less stringent than some of its online competitors. You’ll need a minimum 600 credit score to qualify, and at least a year of business history and $100,000 in annual revenue.
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 liable for repaying the debt if your business fails to repay.
Line of Credit
- Loan amount: Up to $100,000
- APR: 11% to 60.8%, as of Q1 2018
- Loan term: Repaid weekly for up to six months
- Funding time: As quickly as 24 hours but typically a few days
- Read our OnDeck review
*APRs update quarterly
LendingClub provides term loans with an APR range of 9.8% to 35.7%, making it slightly more expensive than Small Business Administration loans, but they’re the lowest among unsecured funding options online. The lender requires a minimum 600 credit score, a minimum one year of business history and $50,000 in annual revenue to qualify. You also must own at least 20% of the business. The personal guarantee is for loans under $100,000. Above that, Lending Club requires a lien on your business liquid assets such as inventory and cash in case you default.
- Loan amount: $5,000 to $300,000.
- APR: 9.8% to 35.7%.
- Loan term: 1 to 5 years.
- Funding time: As fast as two days, but typically a week or two.
- Read our Lending Club review.
BlueVine offers an unsecured line of credit with APRs that range from 16% to 62%. Loans max out at $150,000, which provides a little more wiggle room for larger purchases. They also come in either six-or 12-month terms, though the 12-month option is harder to qualify for. And they’re fast — it takes up to 12 hours to be approved for a line of credit, and, once approved, you can receive funding within 24 hours.
Like Fundbox, BlueVine also has an invoice financing product. BlueVine will front you 85% to 95% of your outstanding invoice, then the rest (minus fees) once your customer pays you. It’s a good option if you have strong revenue and need to finance large invoices.
Line of Credit
- Loan amount: $5,000 to $250,000.
- APR: 15% to 78%.
- Loan term: Repaid over 6 or 12 months.
- Funding time: As fast as 24 hours.
- Read our BlueVine review.
- Loan amount: $20,000 to $5 million.
- APR: 15% to 68%.
- Loan term: 1 to 13 weeks
- Funding time: 1 to 3 days.
- Read our BlueVine review.
Unsecured business loans: Summary of options
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.