Key takeaways

  • Unsecured business loans do not require collateral but often have stricter eligibility requirements and higher interest rates compared to other business loans
  • Traditional lenders, such as banks and credit unions, offer unsecured business loans but may not have as convenient or streamlined applications or online services
  • Online lenders offer quicker application processes, but often come with higher interest rates and fees

Taking out an unsecured business loan gives business owners financing without securing the loan with collateral. These loans can be especially appealing to business owners who don’t have assets.

Since these loans don’t require collateral, the eligibility requirements for some types are often more strict than other business loans, and interest rates can be higher, especially if you have bad credit.

If you’re interested in getting an unsecured business loan or business line of credit, there are a few different places you can find them. Both traditional lenders and online lenders offer unsecured business loans, but each lender type has different pros and cons.

Traditional lenders (banks and credit unions)

Traditional lenders include both banks and credit unions. A bank is a for-profit institution often providing personal and business banking options. A credit union offers similar services, but it is a not-for-profit institution that works primarily to serve its members.

With both types of lenders, you typically have access to in-person services at a local branch. They also often have online and mobile services available. Traditional lenders have been around the longest and tend to offer a more trustworthy track record. According to the Federal Reserve’s 2022 Small Business Credit Survey, 76 percent of approved small-bank and 62 percent of large-bank applicants were satisfied with their experiences compared to 34 percent of applicants at online lenders.

But traditional lenders don’t excel at everything. Most banks work with established businesses with at least two years in business and personal credit scores in the good-to-excellent range.

You may find that the online services of banks and credit unions aren’t as convenient or simple as online lenders. Some traditional lenders have online application options for business loans, but others do not. You often have to wait multiple days or weeks to hear back once you submit a loan application.

3 banks that offer unsecured business loans

Not all banks offer business lending options, and even if they do, they may not have an unsecured business loan option. Here are a few banks that do offer unsecured business loans:

Lender Unsecured loan types Top features
Bank of America
  • Unsecured term loan
  • Unsecured business line of credit
  • Low interest rates
  • Free business credit report
Wells Fargo
  • Wells Fargo BusinessLine® line of credit
  • Wells Fargo Small Business Advantage® line of credit
  • Multiple business lines of credit
  • Low interest rates
  • Rewards program
PNC Bank
  • Unsecured small business loan
  • Unsecured small business line of credit
  • Quick approval times
  • Large loan amounts (up to $3 million)

Online lenders

Online or fintech or alternative lenders provide streamlined business loan applications that can be funded entirely online. This option can be more convenient and quicker than getting an unsecured business loan from a traditional lender.

These lenders are more accessible to various borrowers, including startups and business owners with fair or bad credit. But the convenience of online lenders often comes with a higher price tag, meaning they often have higher interest rates and loan fees than traditional lenders.

3 online lenders that offer unsecured business loans

Here is a look at some online lenders that offer unsecured business loans.

Lender Unsecured loan types Top features
Bluevine Unsecured business line of credit
  • Fast approval and funding times
  • Credit score minimum starts at 625
  • Minimal fees
  • Unsecured term loan
  • Unsecured business line of credit
  • Same-day funding
  • Incentives for early repayment
  • Unsecured term loan
  • Unsecured business line of credit
  • Portal provides access to over 75 lenders
  • Many lending options
  • Funding as soon as the next day

Pros and cons of unsecured business loans

Make sure to consider the pros and cons of unsecured business loans before applying.


  • No collateral required. Even if you don’t have collateral to back a business loan, you have an option with unsecured business loans.
  • Faster loan approval. If you don’t have assets to assess, the loan application often goes much quicker, and you can get your funds sooner than you would with a secured business loan.


  • May still require a personal guarantee. Without collateral backing a loan, lenders may still want reassurance that you will repay what you owe. A personal guarantee is a provision that requires you to take personal responsibility for the loan if the business fails.
  • Higher interest rates. Unsecured business loans often have higher interest rates because they require the lender to take a higher risk than with a secured loan.
  • Fewer loan options. With secured business loans, there are a variety of options available. But lenders don’t offer as many options for unsecured loans, and some do not offer any unsecured business loan options.

Bottom line

The best unsecured business loan offers affordable financing without securing the loan with collateral. As you look, consider what the best option is for you. Think about the interest rates, fees and other costs of the loan for each lender to understand the full picture of the loan costs.

Frequently asked questions

  • Unsecured business loans work mostly like other business loans: Businesses apply for the loan and receive either a lump sum or a line of credit that must be repaid with interest and other fees. But unsecured business loans are different from secured business loans because they don’t require any collateral to secure the loan.
  • Getting an unsecured business loan can be difficult, but it depends on the lender and the financial strength of the business applying for the loan. Lenders consider the age of the business, its revenue and the business credit score, among other factors, to determine if they will grant the loan. For businesses with favorable characteristics, it will likely be easy to get a loan. Other businesses may need to work more to prove to the lender that they can handle the loan.
  • The main difference between unsecured and secured business loans is that unsecured loans don’t require collateral, while secured loans do. Collateral can be anything from business equipment to commercial real estate that the lender can seize if the borrower defaults on the loan. While unsecured loans do not require collateral, they often require a personal guarantee.