Unsecured Business Loans for Collateral-Free Cash

Small Business, Small Business Loans
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An unsecured business loan has an attractive advantage over a secured loan: You don’t have to put up collateral, such as your home, business equipment or inventory. So if your small business goes south and you can’t repay the loan, the lender can’t seize your personal or business assets.

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. Unsecured 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:

If you have bad personal credit

If you have good personal credit

Unsecured business loans: Summary of options

Best unsecured business loans for 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 qualifying credit score, and funding is fast. Once approved, you can get access to funds immediately or, at most, within a few days. You’ll pay more for this speed, however. Kabbage’s APRs range from 32% to 108%. With a short repayment time frame and a higher APR, this is likely not your best option for a large expense, such as an expensive piece of new equipment for your company.

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

 

Fundbox is a good option if you have bad credit and your business has unpaid customer invoices. The invoice financing lender doesn’t require a personal credit check. 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 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.

fundbox
  • Loan amount: $500 to $100,000.
  • APR: 13% to 68%.
  • Loan term: Equal repayments over a 12-week period.
  • Funding time: One to three business days.
  • Read our Fundbox review.
If you have bad credit and unpaid customer invoices: a good option.

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Best unsecured business loans for good credit: OnDeck, Lending Club and StreetShares

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 are between 14% and 40%, and its requirements are less stringent than some of its online competitors. You’ll need a minimum 600 credit score to qualify, at least nine months of business history and $75,000 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.

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

Lending Club provides both term loans and lines of credit. The APRs on both products range from 8% to 35%, 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, and it requires collateral only on loans and credit lines greater than $100,000. You’ll also need a minimum two years of business history and $75,000 in annual revenue to qualify.

LendingClub-box

Term loan

  • Loan amount: $5,000 to $300,000.
  • APR: 8% to 35%.
  • Loan term: One to five years.
  • Funding time: As fast as two days but typically a week or two.
  • Read our Lending Club review.
LendingClub-box

Line of credit

  • Loan amount: $5,000 to $300,000.
  • APR: 8% to 35%.
  • Loan term: Repaid up to 25 months.
  • Approval time: Less than a week for funding.
  • Read our Lending Club review.

StreetShares is an option if you haven’t built up much of a business history yet, because the lender requires a minimum of only one year in business. You’ll also need a minimum credit score of 600 and at least $25,000 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.

StreetShares-e1459274893272
  • Loan amount: $2,000 to $100,000.
  • APR: 9% to 40%.
  • Loan term: Three to 36 months.
  • Funding time: One to five days.
  • Read our StreetShares review.

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Unsecured business loans: Summary of options

Funding options:Good option for: Do you qualify?Loan amount & APR
kabbage
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%
fundbox
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%
ondeck
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%
lending_club_logo_new-249x47

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 35%
lending_club_logo_new-249x47

Line of credit


Good personal credit
• Strong businesses
• 600+ personal credit score
• 2+ years in business
• $75,000+ annual revenue
• $5,000 to $100,000
• 8% to 35%
Street Shares
Good personal credit
• Working capital
• 600+ personal credit score
• $25,000+ annual revenue
• 1+ year in business
• $2,000 to $100,000
• 9% to 40%

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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.

Updated Nov. 3, 2016.