Best Unsecured Business Loans in January 2024

Unsecured business loans can provide fast funds for your business without needing to provide collateral. However, some assets may still be at risk.

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Best unsecured business loan in January 2024

Written by By Jill A. Chafin | Edited by Abigail Bassett and Janet Schaaf | December 28, 2023

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User ratings	Best for…	Max. loan amount	Term length	Min. interest rate	Time in business
(692) User Ratings & Reviews Ratings and reviews are from real consumers who have used the lending partner’s services.	Short-term loans	$250,000	18 to 24 months	35.40% (for at least 5% of customers)*	12 months	Get Business Loan Offers
User ratings coming soon	Line of credit	Starting at $10,000	Revolving with annual review	10.00%	24 months	Get Business Loan Offers
(83) User Ratings & Reviews Ratings and reviews are from real consumers who have used the lending partner’s services.	Fast funding	$500,000	4 to 24 months	1.11 factor rate	Six months	Get Business Loan Offers
	Startups	$150,000	3 or 6 months	4.66%	Six months	Get Business Loan Offers
(14) User Ratings & Reviews Ratings and reviews are from real consumers who have used the lending partner’s services.	Traditional bank	$150,000	Revolving	Prime + 1.75%	Options for startups	Get Business Loan Offers
	Bad credit	$1,500,000	Up to 15 months	1.10 to 1.40 factor rate	Six months	Get Business Loan Offers
	Working capital	$50,000	12, 18 or 24 months	Not disclosed	6 to 12 months	Get Business Loan Offers
User ratings coming soon	Minorities	$250,000	12 to 60 months	7.49%	12 months	Get Business Loan Offers

Learn more about how we chose our picks.

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Unsecured business lenders at a glance

OnDeck: Best for unsecured business loan for short-term loans

Read our review

Loan amounts	$5,000 to $250,000
Starting interest rate	35.40% (for at least 5% of customers)*
Term length	18 to 24 months
Minimum credit score	625
Minimum time in business	12 months

*Minimum APR offered to at least 5% of customers (not the lowest rate offered).

Pros and cons

Lower credit scores accepted
Same-day funding available
Helps build business credit

Doesn’t fund all industries
Requires personal guarantee and business lien
Not available in North Dakota

Why we picked it

OnDeck offers short-term business loans from $5,000 to $250,000 with terms of up to 24 months — no collateral or specific assets required. Funds can be used for various industries, helping low-credit business owners build business credit with on-time payments.

You could receive a decision within minutes, with funds disbursed as soon as the same day. OnDeck also offers an unsecured business line of credit of up to $100,000.

See Your Business Loan Offers

Bank of America: Best for unsecured business loan for line of credit

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Loan amounts	Starting at $10,000
Starting interest rate	10.00%
Term length	Revolving with annual review
Minimum credit score	670
Minimum time in business	24 months

Pros and cons

No cash advance fees
Rate discounts for veterans and Bank of America Preferred Rewards members
Offers multiple small-business products and services

Annual revenue of $100,000 needed to qualify
Doesn’t list maximum borrowing limits
Higher interest rate than a secured line of credit

Why we picked it

With a Bank of America unsecured business line of credit, you can borrow up to your credit limit as often as you need — only paying interest on what you withdraw. While collateral isn’t required, you must have a credit score of 670 or higher and a minimum of two years in operation to qualify.

Preferred Rewards for Business members can reduce their line of credit rates by 0.25% to 0.75% and enjoy other benefits, such as no banking or ATM transaction fees, cashback on payroll services and more.

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National Funding: Best for unsecured business loan for fast funding

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Loan amounts	$5,000 to $500,000
Starting interest rate	1.11 factor rate
Term length	4 to 24 months
Minimum credit score	600
Minimum time in business	Six months

Pros and cons

Can receive funds within 24 hours after approval
Early payoff discount
High funding amounts

Factor rate makes it hard to compare other offers
Annual revenue of $250,000 or higher needed to qualify
Requires daily or weekly payments

Why we picked it

If you need immediate access to funds, National Funding is one of our top picks for a quick business loan. Fill out a short form online, speak to a funding specialist and receive funds as soon as 24 hours after approval.

While many lenders charge prepayment penalties for repaying your debt early, National Funding offers an early payoff discount to help businesses save even more.

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Fundbox: Best for unsecured business loan for startups

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Loan amounts	Up to $150,000
Starting interest rate	4.66% for 3-month terms 8.99% for 6-month terms
Term length	3 or 6 months
Minimum credit score	600
Minimum time in business	Six months

Pros and cons

New businesses can qualify after six months of operation
Fundbox Plus unlocks more discounts
Available in all 50 states

Only one loan product available
Not all industries are eligible
Short repayment terms

Why we picked it

Fundbox’s business line of credit is an excellent choice for a quick startup business loan. With a low minimum credit score and short time-in-business requirement, entrepreneurs can withdraw up to $150,000 on an as-needed basis to tackle ongoing business expenses.

And if you upgrade to Fundbox Plus, you can get 20% off fees and other benefits.

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Wells Fargo: Best for unsecured business loan for traditional bank

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Loan amounts	$5,000 to $150,000
Starting interest rate	Prime + 1.75%
Term length	Revolving
Minimum credit score	680
Minimum time in business	Options for startups

Pros and cons

No collateral required
Offers a range of small-business services
Automatic enrollment in free rewards program

Personal guarantee required
Smaller credit limit for startups
High annual fees

Why we picked it

Business owners wanting a traditional bank experience can receive in-person support at one of Wells Fargo’s 7,000+ physical branches. The Wells Fargo Small Business Advantage® line provides up to $50,000 in revolving funds for new businesses. Companies that have operated for at least two years can access up to $150,000 with a Wells Fargo unsecured business line of credit, only paying interest on the amount you use.

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Fora Financial: Best for unsecured business loan for bad credit

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Loan amounts	$5,000 to $1,500,000
Starting interest rate	1.10 to 1.40 factor rate
Term length	Up to 15 months
Minimum credit score	500
Minimum time in business	Six months

Pros and cons

Flexible borrower requirements
Fast funding
Early payoff discount

Factor rate makes it hard to compare other offers
Doesn’t help build business credit
Monthly revenue of $15,000 needed to qualify

Why we picked it

Fora Financial offers bad credit business loans to business owners with credit scores as low as 500 with no collateral. If approved, funds up to $1,500,000 could hit your business bank account within 24 to 72 hours. Note that the factor rate can make borrowing expensive.

Contact Fora Financial for a commitment-free quote to see how much financing your business could receive.

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Headway Capital: Best for unsecured business loan for working capital

Read our review

Loan amounts	Up to $50,000
Starting interest rate	Not disclosed
Term length	12, 18 or 24 months
Minimum credit score	Not disclosed
Minimum time in business	6 to 12 months

Pros and cons

Interest doesn’t compound
No hidden fees
Flexible repayment terms

Not available in all states
Lack of information about APRs
Offers low funding amounts compared to other lenders

Why we picked it

A working capital loan with Headway Capital can provide up to $50,000 in revolving funds, helping cover expenses like inventory, marketing, payroll or seasonal fluctuations in income.

While Headway Capital doesn’t disclose minimum credit score requirements, businesses must operate for at least six months to one year with an annual revenue of $50,000 or higher to qualify.

See Your Business Loan Offers

Accion Opportunity Fund: Best for unsecured business loan for minorities

Loan amounts	$5,000 to $250,000
Starting interest rate	7.49%
Term length	12 to 60 months
Minimum credit score	Not disclosed
Minimum time in business	12 months

Pros and cons

Prioritizes women, people of color and low-income entrepreneurs
Provides business coaching and mentorship
Flexible repayment terms

Only available to U.S.-based companies
Annual revenue of $50,000 or more needed to qualify
Not available in all states

Why we picked it

Nonprofit lender Accion Opportunity Fund (AOF) provides affordable loans to diverse businesses unable to qualify for traditional loans due to limited or poor credit history. Women-owned businesses, minority entrepreneurs and those looking for veteran business loans are encouraged to apply.

In addition to financing, AOF offers educational classes, coaching and customer support in English and Spanish, making it an excellent resource for immigrant business owners.

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What is an unsecured business loan?

An unsecured business loan is a type of small-business financing that doesn’t require the borrower to provide collateral — such as cash, equipment or real estate.

Since the funds aren’t secured by pledged assets, lenders typically charge higher interest rates for unsecured versus secured loans.

While collateral isn’t required, it’s common for unsecured loans for business to require a personal guarantee or blanket lien in order to reduce lender risk in case you default on the debt.

On this page

What is an unsecured business loan?
Secured vs. unsecured business loans
Types of unsecured business loans
Pros and cons of unsecured business loans
How to get an unsecured business loan
How to compare unsecured business loans
Alternatives to unsecured business loans
How we chose the best unsecured business loans
Best unsecured business loans summary
Frequently asked questions

Secured vs. unsecured business loans

The differences between secured vs. unsecured business loans can affect your eligibility, interest rate, loan amount and repayment term.

	Unsecured loans	Secured loans
Loan amounts	Amounts tend to be smaller, ranging from $10,000 to $500,000 or more	Amounts vary based on collateral — can go as high as $5 million
Terms	Shorter repayment terms, typically under 24 months	Longer repayment terms based on collateral — can go up to 25 years
Rates	No collateral typically means higher interest rates	Collateral typically helps lower interest rates
Approval	Applicants may be subject to more scrutiny before approval	Applicants may have a better chance of approval since collateral reduces lender risk
Time to funding	With no assets to appraise, lenders may issue funds more quickly	Individual assets must be appraised, slowing down time to funding

Types of unsecured business loans

The following types of business loans provide financing without collateral to help you tackle your short- and long-term business needs and projects.

Term loans

Small-business term loans provide a lump sum you must repay in installments with accruing interest. Long-term business loans usually require monthly payments, while short-term loans can have daily or weekly payments. Unsecured term loans typically have higher interest rates since they aren’t backed by collateral like secured term loans.

Line of credit

A business line of credit is a revolving credit line you can withdraw from as needed, only paying interest on the funds used. Similar to term loans, a line of credit can also be secured or unsecured. While an unsecured line of credit doesn’t require collateral, lenders may want you to provide a personal guarantee or lien. Providing collateral could help you access higher loan limits and lower interest rates with a secured line of credit.

Merchant cash advance

A merchant cash advance is an alternative form of business financing where you receive an upfront cash advance in exchange for a portion of your future sales. Merchant cash advances charge a factor rate instead of an interest rate, which can be tricky to understand.

Since this type of funding typically has less stringent eligibility requirements, it’s ideal for newer businesses looking for a startup business loan with no collateral.

Invoice factoring

With invoice factoring, you sell your outstanding invoices to a factoring company in exchange for an advance payment — typically 70% to 90% of the total invoice amount. You don’t need to provide collateral or a personal guarantee. After the factoring company collects payments on your behalf, they will deduct their fee and send you the remaining balance.

Are equipment loans unsecured loans?

Equipment loans, also called equipment financing, help you purchase or upgrade essential equipment and machinery for your company. Technically, equipment loans are a type of secured business loan since the lender can seize the equipment if the borrower defaults. However, qualifying for equipment financing is typically easier than other types of secured business loans.

Pros and cons of unsecured business loans

Pros	Cons
Collateral is not required Applications are typically processed quickly Startups and bad-credit borrowers may be able to get approved	A higher credit score is usually needed Often requires a personal guarantee Interest rates tend to be higher than secured business loans

Pros

Cons

Collateral is not required

Applications are typically processed quickly

Startups and bad-credit borrowers may be able to get approved

A higher credit score is usually needed

Often requires a personal guarantee

Interest rates tend to be higher than secured business loans

How to get an unsecured business loan

Here are five steps to get an unsecured business loan.

1. Calculate how much you need

A business budget can help determine how much you need to cover essential business expenses. Remember, unsecured business loans typically have higher interest rates. If you need to invest in long-term projects, you might be better off applying for an SBA or long-term business loan.

Use our business loan calculator to estimate how much you could borrow.

2. Evaluate your qualifications

Most lenders list their business loan requirements online, such as minimum credit score, annual revenue and any collateral requirement. While online lenders tend to have more lenient qualification requirements, they typically charge higher fees than conventional banks.

Before applying, check your credit scoresto know your eligibility options. Boosting your credit score today could help you qualify for more competitive offers in the future.

3. Research unsecured business lenders

Research lenders to find the best match for your business needs. Pay attention to hidden fees and extra costs since these can add up, making the loan cost more than expected. Also, check that the lender reports payments to the major credit bureaus to help you build your business credit.

Be sure to read small-business lender reviews before applying to stay aware of any predatory lenders.

4. Gather required documents

Although every lender will require different documents, you will likely need to provide a business plan, personal and business tax returns, financial statements and a balance sheet. Check a lender’s website beforehand to see what else might be required.

5. Apply and review

You can complete most unsecured business loan applications online, although some traditional banks might require an in-person visit. Unsecured loans typically have a faster timeline for approval and funding since the lender doesn’t have to review your assets.

If using an online lender, you could receive funds within one to three business days after approval. Otherwise, your unsecured loan could take up to two weeks to get approved.

How to compare unsecured business loans

Compare the following loan details to help you pick the best unsecured business loan:

Interest rate: Is the business loan interest rate variable or fixed? Does the lender charge a factor rate? Consider low-interest business loans to save the most over the life of the loan.

Repayment term: Does the lender require daily, weekly or monthly payments? Can you afford the payments?

Time to fund: How quickly will your application be processed? Note that the fastest business loans tend to come with higher rates and fees.

Additional fees: Review your business loan agreement for extra fees, such as origination fees, late charges and business loan prepayment penalties.

Loan purpose: How you plan to use the funds can dictate which loan type to pick. For example, consider a business acquisition loan or commercial real estate loan when acquiring or expanding an existing business. Meanwhile, a working capital line of credit is an excellent option for covering a range of business expenses.

Beware of scams

Watch out for lenders trying to pressure you into borrowing more funds or anyone offering no-credit-check business loans. Read up on signs of predatory lending and report all suspicious behavior to the Better Business Bureau.

Alternatives to unsecured business loans

If an unsecured business loan doesn’t fit your needs, here are some other funding options to consider:

SBA loans

Backed by the U.S. Small Business Administration, SBA loans offer low-cost funding solutions for small business owners who can’t qualify for traditional financing. The SBA 7(a) loan is ideal for general business expenses, the SBA CDC/504 loan is best for major fixed assets and the SBA microloan can help with short-term costs.

Note that the approval process for most SBA loans can take up to two months or longer, and you need a personal credit score of 680 or higher to qualify.

Small-business grants

Small-business grants can provide you with funds to grow and expand your business. Although these grants tend to be competitive, it’s worth the effort of applying to access free money for your business.

Business credit cards

If you need help financing everyday expenses or low-cost supplies, business credit cards are typically easier to qualify for than a small-business loan. Note that credit card interest rates usually run higher than traditional loans, and carrying a significant balance could hurt your credit score.

Crowdfunding

If you want a non-loan option, consider crowdfunding. For example, GoFundMe for business lets you create a business profile and broadcast a funding goal, collecting donations from friends, family and the public. Crowdfunding could be a good fit if your business has a solid online presence and fan base.

How we chose the best unsecured business loans

We reviewed the leading small-business lenders to determine the overall best eight unsecured business loans. To make our list, unsecured business loan lenders must meet the following criteria:

No collateral: The loans featured on this list do not require collateral to qualify. However, many unsecured loans require a personal guarantee and/or business lien.
Minimum time in business: Options available to all stages of business, from startups to those operating for more than 24 months.
Minimum credit score: Personal credit score requirements of 680 or lower.
Rates and terms: We prioritize lenders with competitive rates, limited fees, flexible repayment terms, a range of loan amounts and APR discounts.
Repayment experience: We consider each lender’s reputation and overall business practices. We also favor lenders that report to all major credit bureaus, offer reliable customer service and provide customer perks, like free business coaching.

Best unsecured business loans summary

OnDeck: Best for short-term loans
Bank of America: Best for line of credit
National Funding: Best for fasting funding
Fundbox: Best for startups
Wells Fargo: Best for traditional bank
Fora Financial: Best for bad credit
Headway Capital: Best for working capital
Accion Opportunity Fund: Best for minorities

Frequently asked questions

Small-business loans can be either secured or unsecured. Secured loans are backed by collateral, such as cash, equipment or real estate, which the lender can seize if you default. While unsecured loans don’t require collateral, the lender might charge higher rates and ask for a personal guarantee or business lien.

Consider a secured business loan if you have fair or bad credit, have assets you can provide as collateral and want access to more funds at the lowest rate possible.
Consider an unsecured business loan if you have good to excellent credit, don’t have any collateral and don’t need a large amount.

Unsecured loans typically require higher credit scores since they are riskier than secured loans. You’ll likely need to meet strict business loan requirements regarding your company’s time in business and annual revenue.

Some lenders also have state requirements or don’t lend to specific industries. You may need to provide documentation on your business performance, including financial statements and recent tax returns.

While you don’t need to provide collateral, you might struggle finding an unsecured business loan with no personal guarantee.

Some lenders offer bad credit business loans without collateral, but you’ll likely pay higher rates and fees for these products. Low-credit borrowers might have better luck with a secured business loan or invoice financing. You could also consider an equipment loan for bad credit since the equipment acts as collateral.

If a lender places a blanket lien on your unsecured business loan, your assets may be at stake. Should you default on an unsecured loan, the lender can take your business assets and use them as collateral for repayment. If your loan contract has a personal guarantee, you are personally responsible for repaying the debt.

Best Unsecured Business Loans in January 2024

Unsecured business loans can provide fast funds for your business without needing to provide collateral. However, some assets may still be at risk.

How Does LendingTree Get Paid?

Best unsecured business loan in January 2024

How Does LendingTree Get Paid?

Unsecured business lenders at a glance

OnDeck: Best for unsecured business loan for short-term loans

Bank of America: Best for unsecured business loan for line of credit

National Funding: Best for unsecured business loan for fast funding

Fundbox: Best for unsecured business loan for startups

Wells Fargo: Best for unsecured business loan for traditional bank

Fora Financial: Best for unsecured business loan for bad credit

Headway Capital: Best for unsecured business loan for working capital

Accion Opportunity Fund: Best for unsecured business loan for minorities

Why do millions of Americans trust LendingTree?

SECURITY

SAVINGS

SUPPORT

What is an unsecured business loan?

Secured vs. unsecured business loans

Types of unsecured business loans

Term loans

Line of credit

Merchant cash advance

Invoice factoring

Are equipment loans unsecured loans?

Pros and cons of unsecured business loans

How to get an unsecured business loan

1. Calculate how much you need

2. Evaluate your qualifications

3. Research unsecured business lenders

4. Gather required documents

5. Apply and review

How to compare unsecured business loans

Beware of scams

Alternatives to unsecured business loans

SBA loans

Small-business grants

Business credit cards

Crowdfunding

How we chose the best unsecured business loans

Best unsecured business loans summary

Frequently asked questions

Is a small-business loan secured or unsecured?

How hard is it to get an unsecured business loan?

Can you get an unsecured business loan with bad credit?

What happens if you default on an unsecured business loan?