Secured vs. unsecured fast business loans

Small Business

4 min read Published September 25, 2023

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Key takeaways

Secured fast business loans require collateral
Unsecured fast business loans can often be funded faster than secured fast business loans
Secured fast business loans are a good fit for businesses facing difficulty getting approved for unsecured funding

Fast business loans prioritize speed of funding. When you apply with the right lender, you can often get funding from a fast business loan as soon as the next day.

These loans can come in both secured and unsecured forms. There are benefits and advantages to each that can help you decide the right one for you.

Secured vs. unsecured fast business loans

Fast secured loans require collateral. To get this type of loan, you must provide an asset of value to secure the loan. If you fail to make payments, the lender can take the collateral to cover its losses. That helps reduce the lender’s risk.

Fast unsecured loans have no collateral requirements. You can apply even if your company has no assets to offer to secure the debt. But these loans may have higher rates and strict lending requirements compared to secured loans.

Term loans and business lines of credit can be both secured and unsecured. Some loans, like equipment financing and invoice financing, are secured. And some, like invoice factoring or merchant cash advances, are almost always unsecured.

Compare secured fast business loans

If you’re looking for a fast secured business loan, consider these lenders.

Lender	Loan type	Funding speed	Best features
Funding Circle	Term loan Line of credit	Two days	One quick application that shows what loans you’re eligible for Low rates and fees
SMB Compass	Line of credit Equipment loan Bridge loan	24 to 48 hours for most types of loans	Wide variety of loan options Low starting rates High loan amounts
National Funding	Term loan Equipment loan	As soon as 24 hours	Lowest payment guarantee Early payoff discount
Lendio	Equipment loan	Next business day	Shows offers from large network of lenders

Compare unsecured fast business loans

Consider these options if you’re looking for an unsecured loan with quick funding.

Lender	Loan type	Funding speed	Best features
OnDeck	Line of credit	Same-day	Early payment discount Low credit score requirements
Fundbox	Line of credit	Next business day	Low credit score requirements No early repayment penalty
Credibly	Merchant cash advance	Same-day	Minimal eligibility requirements Variety of loans available
Backd	Working capital loan	Next business day	Generous loan amounts Low annual revenue requirements

Bankrate insight

The best business credit cards are often unsecured and don’t require collateral. This is a great alternative to a fast business loan because it offers easy access to funds while potentially earning rewards and building credit. But you will likely need to provide a personal guarantee.

When to take out a fast secured business loan

Secured fast business loans are a great fit for businesses needing quick funds and have assets to provide as collateral. Since there is less risk involved, lenders tend to offer the most affordable rates and terms for these loans.

Secured term loans and business lines of credit are also more accessible than unsecured loans. So, if you are a startup or a business owner with fair-to-bad credit, a secured loan can help you secure affordable financing.

When to take out a fast unsecured business loan

Unsecured fast business loans typically have quicker application processes than secured loans because the lender doesn’t have to examine the collateral to assess its value. If you need money quickly, skipping the collateral may speed up the process.

An unsecured loan is also a good choice if you plan to pay the loan off quickly. The extra effort of offering collateral to lower the interest rate won’t save you much if the loan only lasts a few months.

You may also consider an unsecured business loan if you have no collateral. If you don’t have assets, an unsecured loan is the only option.

Bankrate insight

Since fast business loans often require daily or weekly payments, you run the risk of defaulting if you can’t afford your payments. It is recommended to use a business loan calculator to determine the cost of the loan and compare fast business loan options to find the best one for you.

Bottom line

If you’re a business owner needing funds quickly, you’ll want to opt for a lender focusing on quick underwriting and approval. Many online lenders offer both secured and unsecured fast business loans.

Though secured loans require that you put your business’s assets at risk, doing so can be worth it because you’ll save money through lower rates and fees. Before you apply for any business loan, take the time to shop around for the best deal.

Frequently asked questions

No, not all business loans need to be secured. If your company has strong financials, good credit, and a long operating history, that can help it qualify for unsecured loans. But some lenders may ask for a personal guarantee on your business loan in place of collateral.
Whether you want a secured or unsecured loan, the process starts the same: you’ll have to find a lender and fill out an application. Both loan types require similar info, such as your company’s financial documents, credit score, personal information and business plans. When applying for a secured loan, you’ll need to provide details about the proposed collateral.
The quickest way to get a business loan is to have a complete and accurate application with the required documentation. Applying through an online lender with a streamlined process can also speed up approval and funding.