Unsecured business loans don’t need any collateral, making them less risky for lenders. However, borrowers may still be held personally liable if they default on their loan.
A blanket business lien or unlimited personal guarantee permits a lender to seize and sell assets in order to recoup their losses. They may even turn your unsecured loan over to a collections agency for collection efforts.
1. Bluevine
Bluevine is a fintech company that offers businesses various financial services. Its main product is an account and bill payment service for small businesses, but they also provide unsecured lines of credit to these same small firms.
Your line of credit allows you to draw funds as needed, with automatic replenishment. This makes it a great solution for quick cash flow needs in your business with no prepayment fees or account closure penalties.
The application process is straightforward and can be done online. Simply provide your name, address, email, business tax ID number, phone number and either a read-only connection to your bank account or the last three bank statements.
Bluevine has more relaxed qualification requirements compared to some other online lenders, providing their customers with a larger line of credit.
2. Fundbox
Fundbox offers a line of credit to businesses in need of cash quickly and conveniently. You can apply online in minutes, with funding arriving as soon as the next business day!
This lender is ideal for small business owners who require a flexible, revolving line of credit similar to that provided by credit cards. Its credit lines have terms of 12 or 24 weeks and must be paid back with weekly installments.
However, this loan type may not be the best solution for large or long-term needs such as real estate purchases or equipment financing. You might be better served by a specialized loan from another lender.
Fundbox also offers Flex Account, which lets you pay vendors from your line of credit just like with a credit card. Its fees are low and won’t affect your credit score.
3. OnDeck
Unlike traditional bank loans, OnDeck doesn’t require you to put up any physical assets as security for your business loan. Instead, the company takes a general lien on all of your business assets and requires you to sign a personal guarantee as proof of payment.
Unsecured small business loans can be appealing to borrowers who lack the collateral that banks typically require for a business loan. Nonetheless, it’s important to read the fine print carefully so you don’t end up with a higher interest rate than what would apply with more traditional financing options.
OnDeck’s online application process is quick and effortless, with funding available as soon as the same day if your business meets certain requirements. Unfortunately, their credit products often come with high interest rates and fees.
4. Rapid Finance
Entrepreneurs often require an immediate cash infusion for time-sensitive growth opportunities. Rapid Finance provides small businesses with various funding solutions, including SBA loans, term loans and lines of credit.
This lender also provides accounts receivable financing products, such as merchant cash advances and invoice factoring. With these solutions, you can borrow cash from a third party who purchases your outstanding invoices for a percentage then pays you the remainder.
Rapid Finance makes applying for a loan easy by collecting some basic information online and uploading your documents. Once they receive it, a representative will review it and contact you if additional details are required. Upon approval, Rapid Finance could deposit funding directly into your business bank account within minutes!
