Unsecured Business Loans: Your Top 5 Options in 2020

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The Best Unsecured Business Loans for Small Businesses

Unsecured business loans are small business loans that don’t require a borrower to offer collateral. With unsecured business loans, borrowers avoid the risk of putting valuable assets on the line for financing, but lenders make up for their increased risk by charging higher interest rates, requiring personal guarantees, or filing liens.

Here’s a comparison of the best unsecured business loans:

Lender  Eligibility   Loan Amounts Cost and Repayment Term Personal Guarantee or Lien?
One-year business history; $50K annual revenue; no credit score minimum
$2K – $250K
1.5% – 10% per month; 6, 12, or 18 months
Personal guarantee
One year business history; $100K annual revenue; 600 credit score
$5K – $500K

 

9.99% – 79% annual interest rate; 3 – 36 months
Personal guarantee and lien
Six months in business; $25K annual revenue; 600 credit score
$2K – $250K
6.5% – 39%; 3 – 36 months
Personal guarantee and lien for lines of credit and larger loans
Six months in business; $100K annual revenue; 600 credit score
 

$5K – $250K

4.8% – 51%; 6 or 12 months
Personal guarantee and lien
Three months in business; $25K annual revenue; 500 credit score
$1K – $100K
Starts at 4.66%; 12 or 24 weeks
Personal guarantee on higher credit lines

Keeping this in mind, here are the top five options for unsecured business loans:

1. Kabbage

Best for: Fast access to capital with no minimum credit score requirement, as well as no collateral.

Kabbage offers a business line of credit that can range from $2,000 all the way up to $250,000. You won’t need to provide collateral in order to qualify for Kabbage financing.

One of the biggest advantages of using Kabbage is fast access to capital. If you need funding quickly, Kabbage is a great option because they can fund your application within a matter of hours. 

Plus, they don’t set a minimum qualifying credit score, so this is a particularly good unsecured business financing option for borrowers with bad credit. You only need to have been in business for one year and generating at least $50,000 in annual revenue. Kabbage charges a loan fee of 1.5% to 10% each month, which translates to a high APR, but this lender could be a good option for short-term business needs, such as buying inventory or supplies.

Get more details from our comprehensive Kabbage review.

See If You Qualify

2. OnDeck Capital

Best for: Working capital financing with more favorable interest rates than similar lenders.

OnDeck Capital offers short-term unsecured business loans and unsecured business lines of credit. Just like Kabbage, OnDeck financing doesn’t depend on the value of specific business collateral. They offer financing from $5,000 to $500,000.

It’s slightly harder to qualify for an OnDeck loan compared to Kabbage, but you’ll get better interest rates than you’d typically be able to access through unsecured business loans—OnDeck’s interest rates range from 13.99% to 36% on their line of credit product. This is lower than Kabbage’s starting point for interest rates.

OnDeck’s unsecured product works particularly well if you need working capital. You can use OnDeck’s product to handle cash flow issues or cover unexpected expenses that come up. To qualify, you need a credit score of 600, one year in business, and $100,000 in annual business revenue.

Get more details from our OnDeck review.

See If You Qualify

3. StreetShares

Best for: Veteran-owned or slower-growth businesses that don’t have significant annual revenue.

StreetShares is another alternative business lender that offers unsecured business loans. Loans go up to $250,000 and come as a short-term loan or line of credit. This lender originally launched to help veteran-owned businesses, but loans are available to non-veterans as well in a range of industries.

In order to qualify for StreetShares financing, you need to have a 600 credit score and be in business for at least one year. However, only $25,000 in annual revenue is required, and interest rates start at just 7%. This makes StreetShares an economical option for home-based businesses, microbusinesses, and slower-growth businesses that are seeking unsecured business loans.

Get more details from our StreetShares review.

4. BlueVine

Best for: Business emergencies and cash flow gaps that need fast funding.

BlueVine offers an unsecured line of credit that doesn’t require collateral. Credit lines extend up to $250,000, with repayment options of six or 12 months. The interest rates range from 4.8% to 51%, and when translated to an APR, it will appear to be an expensive product. However, the fact that you pay back the balance so quickly can make it ideal for business emergencies and cash flow gaps. You only have to pay for the funds that you actually draw from your credit line.

The BlueVine line of credit also has a fast turnaround time. The initial online application takes just a few minutes, and you can have funding in your bank account within two business days. To qualify, you need six months of business history, a credit score of 600, and $100,000 in annual revenue.

Get more details from our BlueVine review.

See If You Qualify

5. Fundbox

Best for: Easy, fast funding with more lenient requirements and, in some cases, no personal guarantee. 

Fundbox is one final option for unsecured business loans. Similar to Kabbage and BlueVine, Fundbox offers an unsecured business line of credit. They don’t require specific collateral on any credit lines and on smaller credit lines, they’ll even waive a personal guarantee. Their credit lines are smaller, topping out at $100,000. However, Fundbox is one of the easiest unsecured loans to qualify for. You only need a 500 credit score, $25,000 in actual or projected annual revenue, and three months in business.

Similar to the other unsecured loan options, it’s very quick and easy to apply for a Fundbox line of credit. You can connect your business bank account or accounting software to the Fundbox application and get a credit decision within minutes. The funds can be in your account as soon as the next business day after you apply. Fundbox interest rates start at 4.66% of the draw amount and go up from there based on creditworthiness.

Get more details from our Fundbox review.

Apply for an Unsecured Business Loan

Frequently Asked Questions

The Bottom Line

The risk of defaulting on a business loan is very real for business owners—especially those who fail to qualify for financing from a traditional bank. Acknowledging this risk isn’t meant to scare entrepreneurs away from pursuing debt financing—but it is important to think about all the factors involved before signing on the dotted line for a new business loan.

Unsecured business loans save you the trouble of having to offer a specific asset as collateral in exchange for a business loan. However, you could still be on the hook if your business fails. Lenders use alternative methods, such as personal guarantees and blanket liens, to shore up their interests. Make sure that you read the fine print on any unsecured business loan and have a clear plan for paying it off.

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Senior Contributing Writer at Fundera

Priyanka Prakash, JD

Priyanka Prakash is a senior contributing writer at Fundera.

Priyanka specializes in small business finance, credit, law, and insurance, helping businesses owners navigate complicated concepts and decisions. Since earning her law degree from the University of Washington, Priyanka has spent half a decade writing on small business financial and legal concerns. Prior to joining Fundera, Priyanka was managing editor at a small business resource site and in-house counsel at a Y Combinator tech startup.

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