Last updated on February 20th, 2019 at 10:17 am
Interested in business loans but have no adequate collateral to come up with? There’s a great solution for this – unsecured business loans. Unsecured business loans offer a great opportunity to borrowers who don’t want to put up collateral or any personal guarantees.
Most banks want borrowers to present something as collateral for the loan they are taking in. However, this can be a burden for some small business owners.
Does the need for collateral bother you? Then let the best Unsecured Loans for Small Business work for you! Here, we put together the top-rated companies to assist you with your loan.
Fully Unsecured Business Loan Lenders
Are you looking the best, fully unsecured business loans? Below is the list of four best, unsecured business loan lenders who are willing to accept the risks of default just to make sure your needs for building your business are met. Borrowers are not required to present collateral nor personal guarantees, but still need to meet some qualifications to get approved.
1. Fundbox (Invoice financing)
2. Behalf (Purchase financing)
3. PayPal Working Capital (Merchant cash advance for PayPal merchants)
4. RapidAdvance (Merchant cash advance for all merchants)
Benefits of Unsecured Business Loans
If you are a business owner and you’re not using unsecured business loans, you’re not realizing the positive impact it can have on your business. If you are just relying on the company’s own resources to pay for expenses, you are cutting away at your chance to grow. That’s exactly why small businesses use such loans, for the chance to expand and pay for ongoing costs.
One reason why unsecured business loans are made is to help take good care of various business costs. When these costs pile up, more businesses end up in economic failure. Knowing your options as a business owner is important, because then you can make an informed decision.
If you haven’t explored these loans yet, you may need to understand what benefits you can get from them first.
Here are some of them:
- Need not own anything for justness.
It means that you are eligible for the loan, even if you do not own a vehicle, a home, or any other means.
- No credit checks required.
Unsecured loans usually require no credit check, which won’t make your score drop, as long as you make the agreed-upon payments.
- Quick approval.
Expect to get a response in minutes, up to a few days when waiting for approval. Rest assured that you will receive what you deserve in a timely manner after you submit all the required documents.
- Payment flexibility.
With unsecured loans, you can make payments weekly, bi-weekly, or choose a more manageable payment schedule. However, for business transactions outside the norm, don’t forget to contact your loan provider to see what your options are.
- Higher loan amounts.
Most secured lenders often have limited funding. Unsecured business loans don’t normally have this limitation because they don’t require any assets.
- High-interest rates.
With many providers, unsecured loans carry high APR rates to offset potential losses (due to lack of collateral). It is important to keep an eye on the interest rates that a lender offers and make sure you make each payment.
- Stricter guidelines.
Due to the nature of how the business runs, unsecured business loans provide stricter guidelines.
- No long-term financial commitments.
Unsecured loans only provide short-term commitments for the amount to be paid back. The borrowed funds are designed to be paid off as quickly as possible. This is to fix sale slowdown risks and other financial issues. Clearing debts as fast as possible opens more opportunity for you to profit faster.
Fundbox: For Businesses That Invoice Customers
If you are looking for a business loan that invoices customers, Fundbox is highly recommended. Fundbox is our best pick for invoice financing or factoring loan type. It is widely known for giving out loans at a very reasonable rate.
Small business loans with invoice financing or factoring let you receive a lump sum payment right before the due date to help stabilize the cash flow of your business. Moreover, an invoice financing business helps prevent late-paying customers while giving businesses an excellent way to put more money into the business.
Fundbox is the best unsecured business loan company which offers business owners a simple way to fix their cash flow and late-paying customers. They do it by advancing payments for their outstanding invoices. Fundbox allows you to have 100% advance invoice which can be paid back for over three months. You can get the money the very next day after the application, with no collateral or personal guarantee required.
What You Can Get with Fundbox:
- Clear invoice
- Cash upfront
- No hidden fees
- 100% invoice value
- Free registration
- Instant payment
Loan processing with Fundbox is simple and straightforward, the reason why it was rated 5 stars by QuickBook users. Fundbox customers enjoyed an average of 41% increase in cash availability. With Fundbox, you can create free account in a few minutes, select outstanding invoices, get the money directly to your bank, and run the business the way you want to.
When you need to improve your cash flow situation, let Fundbox help you and turn the 30, 60 or 90 days due into cash. Apply today and get the money tomorrow.
Behalf: For Small Purchase Financing
For unsecured loans that offer small purchase financing, Behalf is the best option for you. We greatly recommend Behalf for business owners who are in need of a loan for small purchase financing.
Purchase financing allows businesses to buy essential goods and services. However, you should know the APR is around 33%, slightly lower than Fundbox rates. You agree to pay back the amount being financed.
Your partnership with Behalf helps you run your business on your very own terms. With Behalf, you can increase the sales and have the control on how you pay for everything you purchase. Cash flow is easy with Behalf. You can lend up to $50,000 with super quick funding, and must pay back within 1-6 months.
What You Can Get with Behalf:
- Full purchase control
- No hidden fees
- Free application
- Fixed monthly rate
- No maintenance fees
- No origination fees
Behalf is an unsecured lender that does conduct credit checks for evaluating business owners creditworthiness. If credit score is a concern of yours, opt for a business loan for bad credit.
PayPal Working Capital: For PayPal Merchants
Good news for PayPal sellers out there. With PayPal Working Capital, you can now usher your business with an unsecured loan. To qualify for this type of loan, you must have processed at least $20,000 in PayPal sales and have 3 months of PayPal history.
With PayPal Working Capital, you can loan up to $85,000 in a quick, convenient, and relatively inexpensive way. PayPal Working Capital also provides a very flexible loan option where you can choose the percentage of your daily PayPal sales that go towards the settlements.
The amount you can receive from PayPal Working Capital is based on the history of your PayPal sales. When you apply, you are not required to go through a credit check, so don’t worry about your credit score. Once you are approved, you will have the funds in minutes.
What You Get with PayPal Working Capital:
- Flexible payments
- Affordable fixed fee
- No credit check required
- Quick funding
- No periodic interest
- No hidden fees
- Only one fixed fee
With PayPal Working Capital, you can choose a share of your sales to automatically deduct as payments. When you have no sales, you won’t pay a thing but you have to pay 10% back every 90 days to keep your loan in good status. If ever you want to pay the loan in full, you can do it anytime with no charge. Since there is just one fixed fee, there are no other fees or periodic interest attached.
As you grow with PayPal Working Capital, you can see how your business changes. Just like other PayPal merchants, you can have the best month every month. If you are ready to get started with PayPal Working Capital, check the history of your sales and receive an amount that fits your business.
RapidAdvance: For All Merchants
One of the most common unsecured type of funding is done through a merchant cash advance, sometimes known as credit card receivable funding. This type of loan may be quite expensive, as the APR can go as high as 80%.
With RapidAdvance, you will get a lump sum payment in exchange for a share of your daily credit or debit card sales. However, cash advance has no fixed term and you only have to make payments on days you get sales. This flexibility has been favored by some businesses since hey are not forced to pay when sales are not generated.
What You Can Get with RapidAdvance:
- BBB A+ ratings
- Lightning fast approval
- No personal guarantee required
- No collateral required
- 1-2 days approval
- 3-5 days funding
RapidAdvance’s APR offer will depend on your credit score and the amount of your credit card sales. Qualified cardholders are allowed to borrow $5K to $500K, payable in 4 to 12 months.
Partially Unsecured Business Loan Lenders
Partially unsecured business loan provides more favorable business costs and terms. With it, businesses are allowed to get a loan even if it’s hard for them to come up with sufficient collateral. However, the need for personal guarantee is required as personal assets are likely to limit default cases for lenders.
Whatever business assets you do own, the partially unsecured lenders may put a general lien on them. As far as the lender is concerned, partially secured loans are less risky than ones that are fully unsecured. Here are the three best partially unsecured business loans to choose from:
1. Accion (Startups and Bad Credits)
2. Lending Club (Business Needing Large Loans)
3. SmartBiz (Good Credit Small Loans)
Partially Unsecured Business Loan Lenders: Deep Overview
Accion: For Startups with Bad Credit
For borrowers who have poor credit or limited credit history but still want to start a new business, we recommend Accion.
Accion is our best pick for startups and businesses with bad credit. It is a non-profit organization who specializes in lending under-served businesses that banks won’t lend to.
Businesses are allowed to borrow funds whether the collateral is present or not. However, providing collateral can give your application a higher chance at approval and possibly the lowest rate too.
The collateral need not be equal to the amount of loan, as long as it is present, it shows a commitment to the lender. Starting a business with bad credit is usually nearly impossible, but Accion work with you. If you have poor credit history, you likely won’t get a low APR rate either. With Accion, you can may qualify for a business loan ranging from $300 to $1,000,000.
What You Can Get with Accion:
- Transparent pricing
- Clear terms
- Inclusive credit access
- Responsible products
- Dependable underwriting
- Quick application
Accion offers microloans which is perfect for startups and business owners with credit issues. Accion believes that you deserve a fair chance at borrowing money as a business owner. To create or grow a healthy company, consider an unsecured business loan from a lender like Accion, who have helped numerous businesses.
A number of people join the Accion daily. Most reviews favored Accion and praised their fast approval rate. A few users mentioned this lender helps businesses get started easily. If you you are looking for a loan with clear terms and transparent pricing, apply at Accion’s website.
Lending Club: For Business Needing Large Loans
For businesses who are looking for large loans, we recommend Lending Club. The Lending Club is our best pick for a business loan that offers P2P (person-to-person) funding. It is great for businesses with good credit who want to try this loan model.
The Peer2Peer platform connects investors with loan seekers. Since you can bypass the bank and talk directly to investors, P2P seems to be attractive for business owners with unique business models. To qualify for the loan, you need to have good credit and well-established business.
Lending Club is one of the world’s largest online credit marketplace assisting personal, business, and financing loans, where borrowers access lower interest rates through a friendly interface. To help you achieve financial goals everyday, Lending Club is provides an easy to understand, high-efficient online marketplace. It is the reason why thousands of Lending Club clients highly recommend the company.
What You Can Get with Lending Club:
- No collateral for under $100K loans
- More efficient and transparent lending
- No branch infrastructure operation
- Free registration
- No membership fees
- Great flexibility
With Lending Club, you can get an instant quote, open an account in minutes, and start building a portfolio of thousands of loans. Such loans are ideal for qualified business loan borrowers. If you need medical financing, Lending Club is a great provider as well so no matter what kind of loan you are interested in, expect a fast and convenient process. Though this loan requires personal guarantee, their process is safe and proven.
For loans or lines under $100K, collateral is not required. However, eligibility for the loan is only valid if the business is already 24 months old, has at least $75,000 in annual sales, and has no recent tax liens or bankruptcies on record. The business owner should also have at least fair or better personal credit. The registration process takes only minutes. If you are qualified, you can borrow the highest amount without any collateral.
SmartBiz: For Small Loans with Good Credit
SmartBiz is our best pick for business owners with good credit who are seeking small loans with the lowest interest rates. Anyone who is looking for the best business loan with SBA, we recommend SmartBiz. Yo do have to be in business for at least 2 years and have good credit.
The funding process usually takes 7 days for a 10 year loan term. Businesses are allowed to loan up to $350K for 10 long years, depending on the length of their business and their credit score. It is fast and easy to get an SBA loan with SmartBiz. It is the least expensive of all loan options mentioned in this guide. With only 7.21% to 8.44% APR, all qualified business owners can get good rates, lower monthly payments, and no prepayment penalties.
The SmartBiz loan process is streamlined; no collateral required for loans under $150K and a speedy funding process.
What You Can Get with SmartBiz:
- Fast and easy application
- Trust and satisfaction guaranteed
- Best deals provided
- Low monthly payments
- No prepayment penalties
- Better interest rates
On the other hand, if you want to take out a loan above $150K, you are required to provide collateral. However, it is only required if you have less than 675 as a credit score. Currently, you may qualify for their lowest APR offer of 6.25% to 7.25%. It takes less than 5 minutes to fill out their quick loan application (and it won’t affect your credit score).
Once the application is complete, you can get the funds as fast as 7 days. Some lenders have a 14 day funding process so this is definitely faster. Besides, SmartBiz has been trusted and loved by over 92% of Wise Small Business customers. SmartBiz was scored 9.6 out of 10 in a TrustPilot survey which proves really great client satisfaction.
Whether you need working capital, expanding your business, equipment financing, debt refinancing or business acquisition, allow SmartBiz to take your business to the next level.
Our Final Review About Unsecured Business Loans
To start a small or a big business, business owners need to be brave in taking risks towards working with someone. Whether it is your first time building a business or expanding a current entity, business loans can help you grow and maintain cash flow.
There are various small business financing options, but unsecured business loans are easy if you don’t have collateral but have can sign a personal guarantee. If you goal is to get lower interest rates, go for partially unsecured business loans. However, if you don’t have both, an unsecured loan might be the best option.
What’s important to you and your business when selecting an unsecured business loan?
The WiseSmallBusiness Team is full of industry experts and successful business owners willing to contribute important business articles.