What are Unsecured Small Business Loans

What are the Best Unsecured Small Business Loans?

unsecured small business loan abstract

For small companies and business owners dealing with a constant lack of funds for growing and expanding their businesses to the next level, one excellent option is the unsecured small business loan.

The fact that the application and approval process is generally fast and easy compels most small business owners to look no further than the unsecured small business loan. Unsecured small business loans have several benefits:

  • No assets or collateral needed
  • Flexible terms with fixed payments. Often daily, weekly or monthly.
  • Easy one page application
  • Minimal additional paperwork
  • Approvals in 24 hours
  • Funding in 1 to 3 days.

Often entrepreneurs and small business owners are a bit disenchanted by what they sometimes perceive as slightly higher interest rates for unsecured small business loans relative to what they believe they could receive from a more traditional bank loan. The stark reality is that banks typically will not lend to most small business owners. This is based either on industry type, revenue or years in business, let alone the personal credit score of the owner. You must remember that if you’re getting a bank loan, while the rates may be lower, they will always require personal security or assets, commonly known as a personal guarantee. Like all things in life there is a trade-off between the PG (personal guarantee) vs. an unsecured small business loan.

Can I Get a Traditional Business Loan?


Many small business lenders like Sunwise Capital will now offer more bank like rates and terms for those borrowers who want a more traditional looking bank like loan and have a FICO score at least in the mid to upper 600’s that want a 5 year term with monthly payments. The era of great credit with no documented revenue is over.

Remember, since the unsecured small business loan requires no assets or collateral, the business lender inherently is taking on more risk. As a result this increases the cost of funds. Often times it is best for the business owner to look at this loan in several ways. One key question you must always ask yourself on any type of business loan is, “What is my R.O.I? (Return on Investment)”?

First, based on your industry, number of years in business, your personal and business credit and a plethora of other factors, would your business even qualify for a small business loan. Second, what are you going to do with the money? And lastly, what happens if you do not get the money?

The reality is that upon further examination, these types of unsecured business loans might have lower interest rates than other types of collateralized loans, such as factoring.

Suppose you took the loan to purchase some business equipment, inventory or anything else that may help you grow your business. The small business loan lenders couldn’t care less. The business loan lenders primary concern is whether or not you can repay the loan, without killing your cash flow. Unsecured small business loans are comparable in every way to other loans. The big difference is that the unsecured small business loan doesn’t need assets or collateral to secure the loan.

When you go to the bank and ask for a traditional bank loan, they will require some security or collateral. That can be stocks, CD’s, your home or automobile. Basically anything they can place a lien on. They will also encumber all of the partners or owners of the business. Typically your unsecured small business loan will require only one owner and quite often it can be the one with the best personal credit score.

The loan application process is very simple. It starts by the business owner filling in a one-page application (Click Here). Generally you’ll have to submit the last 3 months of your business bank account as well. Depending on loan amounts, etc. you may have to provide some additional documentation to support your small business loan request. This can include part or all of your business tax return, a current P&L or business balance sheet.

Do you have excellent personal credit and don’t mind offering a personal guarantee? If so you can base the decision off of your FICO score. This small business loan will typically offer you bank like interest rates and terms up to five years with monthly payments. The decision is truly up to you. The only question is whether or not you qualify.

To see more about a good credit small business loan you can CLICK HERE. Generally it is safe to say that an unsecured small business loans are approved in 24 hours relative to small business loans based off of your personal credit and this is one of the factors that you would consider when deciding on the different types of loans that are available to you.  The biggest difference is the time to fund. An unsecured small business loan will fund in 24 – 48 hours. A small business loan based on personal credit may take 3 to 5 business days and a traditional bank small business loan can take up to 90 days if you’re lucky.

Borrowers like to have their business loans available promptly. Unsecured small business loans are now the new “new” and are considered as common as the bank business loan. These unsecured small business loans are offered without the traditional personal guarantees and the business owner can use the funds as they most see fit.  As a result, the business owner is typically put is a much better situation as they are more and more using these unsecured small business loans for business renovation, starting a new division or expansion, reducing outstanding debt, payroll, taxes and even working capital. The only caveat is that the lender will expect the business they lend to will maintain that business (and the bank account they are drawing the funds).

In addition to those already mentioned, there are numerous other uses for the unsecured small business loans that were previously supported by traditional bank small business loans.  Feel free to call Sunwise Capital ( or call 888.456.9223 to speak directly to underwriting and to see if you qualify.


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