Yes, it’s possible to borrow money without collateral using an unsecured business loan. But be aware that these loans often come with stricter eligibility criteria and higher interest rates than business loans that are backed by an asset.
| Loan amounts | $5,000 to $250,000 |
| Starting interest rate | 27.30%* |
| Term length (months) | Up to 24 months |
| Min. credit score | 625 |
| Min. time in business | 12 months |
| Min. annual revenue | $100,000 |
| Pros | Cons |
|---|---|
Same-day funding available Shorter time in business requirement Lower annual revenue requirement | Higher interest rates Daily or weekly repayment required Charges an origination fee |
*This rate reflects the estimated starting APR offered to at least 5% of OnDeck customers. It doesn’t reflect the minimum APR offered by the company.
If you only need to borrow money for a short time, OnDeck could be a good option. The company offers short-term business loans up to $250,000 with the option to receive same-day funding and pay it back over up to 24 months. Plus, since it has a shorter time in business requirement and lower annual revenue requirement, it may be a fit for newer businesses as well.Still, you’ll likely pay more for the privilege of borrowing. OnDeck’s interest rates are relatively high and the company charges an origination fee. You’ll also have to manage a daily or weekly repayment schedule, rather than a monthly one.
Read our full OnDeck small business loan review.
| Loan amounts | Up to $250,000 |
| Starting interest rate | Starting at 6.20% for -week (6-month) term |
| Term length (months) | 6 or 12 months |
| Min. credit score | 625 |
| Min. time in business | 24 months |
| Min. annual revenue | $40,000/month ($480,000/year) |
| Pros | Cons |
|---|---|
Flexible funding Affordable starting interest rate Available to business owners with fair credit | High annual revenue requirement Longer time in business requirement Shorter repayment terms |
If you need flexible access to funding, consider choosing a business line of credit over a term loan. Like business credit cards, lines of credit allow you to borrow money on an as-needed basis and replenish the funds upon repayment. However, lines of credit — and especially Bluevine’s offering — tend to have more affordable interest rates than credit cards.That said, Bluevine’s line of credit is likely only going to be an option if your business is well established. Its annual revenue requirement of $480,000 per year is likely going to be hard for some businesses to reach. In addition, its 24-month time in business requirement knocks out newer operations altogether.
Read our full Bluevine business line of credit review.
| Loan amounts | $5,000 to $500,000 |
| Starting interest rate | 1.11 factor rate |
| Term length (months) | 4 to 18 months |
| Min. credit score | 600 |
| Min. time in business | 6 months |
| Min. annual revenue | $250,000 |
| Pros | Cons |
|---|---|
Lower minimum credit score requirement Shorter time in business requirement Provides dedicated account manager | Steeper annual revenue requirement Uses a factor rate instead of simple interest Short repayment terms |
With a funding cap that extends to $500,000, National Funding offers larger loan amounts than most of the other lenders on this list. Plus, with its minimum credit score requirement of just 600 and time in business requirement of only six months, this funding is accessible to a greater number of businesses as well.On the other hand, the repayment terms only extend to 18 months, which is shorter than many short-term business loan lenders. Not to mention the fact that expressing interest charges as a factor rate makes it much more difficult for the average business owner to understand the cost of borrowing.
Read our full National Funding business loan review.
| Loan amounts | $150,000 |
| Starting interest rate | 4.66% for 12-week terms 8.99% for 24-week terms |
| Term length (months) | 12 or 24 weeks |
| Min. credit score | 600 |
| Min. time in business | 6 months |
| Min. annual revenue | $100,000 |
| Pros | Cons |
|---|---|
Short time in business requirement Lower annual revenue requirement Lower minimum credit score requirement | Low maximum borrowing amount Short repayment terms Only one product available |
Startups who are looking for unsecured business funding may want to turn to Fundbox. Its minimum credit score requirement, annual revenue requirement, and time in business requirement are all more lenient than you might see with other lenders, making it a good fit for businesses that are just getting started.But, there are some tradeoffs to these flexible qualifying standards. At just $150,000, the borrowing cap is lower than you might find elsewhere. Also, Fundbox’s line of credit is the only financing product it offers, which might be too limiting for some business owners who want to take out a term loan.
Read our complete Funbox business loan review.
| Loan amounts | $5,000 to $1,500,000 |
| Starting interest rate | 1.10 to 1.40 factor rate |
| Term length (months) | 4 to 18 months |
| Min. credit score | 570 |
| Min. time in business | 6 months |
| Min. annual revenue | $15,000/month ($180,000/year) |
| Pros | Cons |
|---|---|
Ability to borrow large loan amounts Low minimum credit score Short time in business requirement | Publishes factor rate instead of interest rate Short loan terms Higher annual revenue requirement |
| Loan amounts | $10,000 to $150,000 |
| Starting interest rate | Prime + 1.75% |
| Term length (months) | Revolving |
| Min. credit score | Undisclosed |
| Min. time in business | 24 months |
| Min. annual revenue | Undisclosed |
| Pros | Cons |
|---|---|
Affordable starting interest rate No annual credit line review Offers alternative line of credit option for startups | Not transparent about all of its eligibility requirements Relatively high minimum loan amount Annual fee and cash advance fee attached |
If you’re not a fan of online lenders and you would rather get your financing from a traditional bank, consider Wells Fargo’s BusinessLine® line of credit. This lender showcases affordable interest rates and perks for borrowers, like waiving foreign transaction fees.Plus, it offers options for both established businesses and startups. Their startup option, the Small Business Advantage® line of credit, has a max loan amount of $50,000 and slightly higher interest rates.
At the same time, though, Wells Fargo is not fully transparent about its eligibility requirements, which can make it hard to tell if you’ll qualify for financing. Plus, this line of credit comes with fees and requires a personal guarantee.
Read our full Wells Fargo business loan review.
| Loan amounts | $100,000 |
| Starting interest rate | Undisclosed |
| Term length (months) | 12 to 24 months |
| Min. credit score | Undisclosed |
| Min. time in business | 12 months |
| Min. annual revenue | $50,000 |
| Pros | Cons |
|---|---|
Low annual revenue requirement Flexible payment schedules Short time in business requirement | Low borrowing cap Doesn’t fully disclose eligibility information Not transparent about interest rates |
Businesses who struggle to meet the annual revenue requirement for most lenders may be better served by Headway Capital. At just $50,000, its requirement is low enough for many businesses to meet. What’s more, this lender provides the option to pick between a weekly or monthly repayment schedule, providing added flexibility.Yet, there are some limitations to this lender. First and foremost, the borrowing cap on its line of credit is fairly low, extending to only $100,000. In addition, Headway Capital is not very transparent about all of its eligibility requirements and rate information, which makes it hard to tell if they are truly a fit for your business.
Read our entire Headway Capital business loan review.
| Loan amounts | $5,000 to $250,000 |
| Starting interest rate | 8.49% |
| Term length (months) | 12 to 60 months |
| Min. credit score | Undisclosed |
| Min. time in business | 12 months |
| Min. annual revenue | $50,000 |
| Pros | Cons |
|---|---|
Prioritizes minority small business owners Provides business coaching and mentoring Offers flexible loan terms | Not available in MT, ND, SD, TN or VT Doesn’t disclose minimum credit score requirement |
Minority business owners may be a good fit for the Accion Opportunity Fund. The fund focuses on assuaging racial and gender inequalities by providing financing to minority business owners who have historically had trouble obtaining loans from traditional lenders. This fund combines flexible loan terms with supplemental programs, like business coaching and mentoring, for a holistic borrowing experience.Unfortunately, though, these loans are not available in all states. At the same time, the fund does not disclose a minimum credit score requirement. However, the website does state that it looks at many factors beyond credit score when weighing loan approval decisions.
| Loan amounts | $2,000 to $250,000 |
| Starting interest rate | 3% to 9% for 6-month loans 6% to 18% for 12-month loans 9% to 27% for 18-month loans 12% to 18% for 24-month loans |
| Term length (months) | 6 to 24 months |
| Min. credit score | 660 |
| Min. time in business | 12 months |
| Min. annual revenue | $3,000/month ($36,000/year) |
| Pros | Cons |
|---|---|
Low minimum loan amount Low annual revenue requirement No prepayment penalty | Each draw counts as a separate installment loan Confusing fee structure Requires personal guarantee |
When you only need to borrow a small loan amount, think about using American Express’s business line of credit. Loan amounts start at just $2,000, ensuring that you never have to borrow more than you need. Plus, its low annual revenue requirement makes it an attainable funding option for most business owners.However, there are some unique features of this line of credit that business owners should consider. For one, each draw on the line counts as a separate installment loan. For another, the fee structure, which frontloads your interest charges during the first few months of borrowing, may be confusing.
Read our full American Express Business Line of Credit review.
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At its core, the term “unsecured business loan” refers to any business loan that is not secured by collateral.
Secured business loans, on the other hand, are backed by an asset, such as property or equipment. If you stop making payments on a secured business loan, the lender can repossess your asset as a form of repayment.
Since unsecured business loans do not have an asset attached to them, they are often considered riskier for the lender. As a result, they may come with more stringent eligibility requirements and/or higher interest rates than a secured option. But, at the same time, you’re not putting an asset at risk.
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Yes, it’s possible to borrow money without collateral using an unsecured business loan. But be aware that these loans often come with stricter eligibility criteria and higher interest rates than business loans that are backed by an asset.
To qualify for an unsecured business loan, your business will generally need to have sufficient revenue and longevity. You may also need a strong personal FICO score and to provide a personal guarantee.
Every lender’s minimum credit score requirements are different. Typically, a score of 670 and above is considered a good credit score and will be sufficient enough to get you approved for most loans. Meanwhile, a score of 740 or above is considered very good or excellent and is more likely to get you access to the most affordable interest rates.