An unsecured business loan is financing that does not require collateral (like equipment, real estate, or inventory) to secure the loan. Instead, approval is based on creditworthiness, cash flow, business history, and underwriting metrics. However, many unsecured loans do require a personal guarantee, meaning your personal assets could still be on the line if your business defaults.
Common types of unsecured business financing:
Lines of credit
Merchant Cash Advances (MCAs)
Invoice factoring / accounts receivable financing
Microloans (small amounts)
Because they pose more risk to the lender, unsecured business loans often carry higher interest rates, stricter qualification criteria, and lower maximum amounts than secured loans.
Here are some of the leading unsecured business loan providers and options you should watch in 2025, along with their key features:
| Lender / Product | Loan Type / Focus | Highlights & Terms | What Makes Them Stand Out |
|---|---|---|---|
| Bluevine | Unsecured Line of Credit | Flexible line of credit, competitive rates | Often cited for good terms for established small businesses Forbes |
| Fundbox | Line of Credit / Invoice Financing | Good for startups & smaller businesses | Often more lenient on credit, faster approval LendingTree+1 |
| OnDeck | Short-Term / Unsecured Term Loans | Fast funding, smaller amounts | Frequently listed among top unsecured business lenders Forbes+1 |
| PNC Bank | Unsecured Business Loan | Traditional bank unsecured loan | Offers unsecured small business loans $20,000 to $100,000PNC Bank |
| Bank of America | Business Advantage Term Loan (Unsecured component) | Terms and rates vary; unsecured aspects | BoA's unsecured offerings are part of its broader small business portfolio Bank of America |
| SBA Microloan | Small unsecured (or lightly secured) loans | Up to $50,000, often collateral may not be required | A good match for very small or startup businesses lendio.com+1 |
| Clarify Capital (Online) | Unsecured Term Loans | No collateral, flexible uses, fast approvals | Doesn’t charge prepayment penalties in most cases Clarify Capital |
| Fora Financial | Alternative / Unsecured Loans | Suitable for lower credit profiles | Called one of the best unsecured options for bad credit businesses LendingTree |
These lenders are frequently mentioned in industry rankings like Forbes’ “Best Unsecured Business Loans” lists. Forbes
To choose the right unsecured loan in 2025, carefully compare:
Interest Rate / APR
Because no collateral is involved, rates are generally higher. Expect APRs significantly above secured loan rates.
According to recent data, average small business loan rates can range from ~ 6.5% to 11.7%, though unsecured financing may be higher.
Loan Amounts & Limits
Unsecured loans tend to be smaller (e.g. $5,000 to $500,000), depending on the lender and your business metrics.
Term / Repayment Schedule
Shorter terms (6–36 months) are common for unsecured loans. Some lenders offer flexible draws or lines of credit.
Fees and Costs
Origination fees, prepayment penalties, late fees, and processing fees can vary widely. Clarify total cost before accepting.
Credit / Revenue Requirements
Even without collateral, expect to show strong personal credit and business revenue. Some lenders require 2+ years in business or minimum income thresholds.
Personal Guarantee
Most unsecured loans still require a personal guarantee, meaning your personal assets may be exposed if the business defaults.
Speed and Funding Time
Many online lenders offer fast approval (same day or next day) for unsecured products since they skip collateral appraisal.
Pros
No collateral required, reducing risk of losing business assets
Faster approval and funding compared to secured loans
Flexibility: funds can often be used broadly (working capital, inventory, payroll)
Cons
Higher interest rates and costs to offset lender risk
Tighter qualification requirements
Smaller maximum loan amounts
Personal guarantee often required despite no collateral
Build strong personal and business credit
Maintain consistent revenue and cash flow history
Reduce existing debt and improve your debt service coverage ratio (DSCR)
Show profitability and growth trends
Provide financial statements, bank statements, tax returns, and projections
Start with a smaller loan to build trust with the lender