Top Unsecured Business Loan Options

In the dynamic landscape of entrepreneurship, securing the proper financial support without the collateral traditionally required can seem like driving cross country without a map.

This trek has hidden paths and shortcuts to success for those who know where to look.

As the CEO of Sunwise Capital, I’ve guided countless businesses through this labyrinth, discovering the most viable unsecured business loan options that pave the way to growth and opportunity.

“Top Unsecured Business Loan Options” is your personal map to these hidden paths, offering a clear and concise overview of the best avenues available for securing funding without the need for collateral.

Drawing on a wealth of experience and insights from the forefront of business financing, this article aims to demystify the process and present you with practical, accessible options that can fuel your business ambitions. Think of it as your personal GPS.

Whether you’re an emerging startup or an established business looking to expand, let’s uncover the top unsecured business loan options to help you move forward with confidence and capital.

Unsecured Small Business Loans – Top Loan Options for Your Company

Business loans are outstanding because they allow you to get funding and access to cash without having collateral. However, most businesses don’t qualify for an unsecured loan or this type of financing at traditional banks.

Fortunately, there are alternative sources of financing available for small businesses. Many entrepreneurs find these types of loans to be far less expensive than traditional bank loans.

For small companies and business owners who constantly lack funds to grow and expand their businesses to the next level, excellent funding options include unsecured small business loans. 

The application and approval process is generally fast and easy, which compels most small business owners to consider an unsecured small business loan.

If you’re looking for a way to fund your next big idea, read on. I’ll share the top three unsecured business loan programs that can help you finance your startup.

What Are the Benefits of Unsecured Small Business Loans?

Unsecured Business Loans – Pros:

• No personal assets or collateral requirements
• Cover cash flow gaps
• Credit history – Poor credit is OK – minimum credit score requirements of 500 or better on your credit report
• Flexible terms with fixed loan payments.
• Repayment terms – daily, weekly payments, or monthly repayments.
• Fixed rates
• Short-term business loans
• Larger amounts – up to $2M
• Business revenue requirements – monthly revenues of $15,000 (annual business revenue $150,000)
• Loan terms – short term loan – 3- 12 months, unsecured term loans up to 3 years
• Easy one-page application – no application fee
• Minimum eligibility requirements, qualifications, and additional paperwork
• Approvals in a few minutes
• Funding time – faster funding in a few hours (same-day funding) or the next business day
• Minimum time in business – At least 12 months
• Requires business checking account or business savings account
• Competitive interest rates – Annual Percentage Rates ranges from 5.49% to 50 %
• Competitive with business credit cards
• No prepayment penalty
• High approval rates
• Lowest rates – see our $500 guarantee

Unsecured Business Loan Cons

Lenders take on more risk when providing unsecured company loans. If your company defaults on this business loan, the lender can take the collateral to cover their losses. 

Rates of Interest That Are Much Greater

Unsecured business loans do not require collateral, so they have higher interest rates because of the higher risk the lender takes.

If you’re concerned about paying high interest rates, your company may benefit from a secured business loan rather than an unsecured one. 

Collateral is necessary for a secured business loan. If you fail to make your required repayments, the lender can take ownership of the collateral and sell it to recoup its losses.

However, if you have good credit and a sound business strategy, you may choose to apply for an unsecured business loan.

Why Can’t I Get a Traditional Business Loan?

Many online lenders like Sunwise Capital will now offer more bank-like loan options for businesses. 

Traditional loans are for those borrowers who want a more traditional-looking capital loan. Banks require a credit profile with a personal credit score of at least in the mid to upper 600s to receive fixed interest rates and a 5-year term loan with monthly payments. 

The era of getting a business line of credit with great credit and no documented revenue is over. Remember, since the unsecured small business loan requires no assets or collateral, the alternative lender inherently is taking on more risk. 

As a result, this increases the cost of funds. Often the business owner should look at this loan in several ways.

What is My Return on Investment (ROI)?

One key question you must always ask yourself on any business loan is, “What is my R.O.I? (Return on Investment)”? 

First, based on your industry (see the industries we serve), the number of years in business, your personal and business credit and business history, and many other factors would your business even qualify for a small business loan? 

Second, what are you going to do with the money?

How Much Money Does Your Business Need?

And lastly, what happens if you still need to 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 or invoice financing.

Suppose you took the loan to purchase business equipment (instead of equipment leasing or other equipment financings), inventory, or anything else that may help you grow your business. 

Small business loan lenders couldn’t care less, and the primary concern of the business loan lender is whether or not you can repay the loan without killing your cash flow.

Unsecured Business Loans vs. Bank Loans

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 anything they can place a lien on, like stocks, CDs, your home, or an automobile. Banks will also encumber all of the partners or owners of the business.

Typically, your unsecured small business loan will require only one owner; quite often, it can be the one with the best personal credit score. The loan application process is straightforward, and it starts with the business owner filling in a one-page application (Click Here).

Generally, you’ll have to submit the last three months of your business bank account. Depending on loan amounts, etc., you may have to provide additional documentation to support your small business loan request. 

This paperwork can include part or all of your business tax return, a current P&L, or a business balance sheet. Do you have excellent personal credit and are willing to offer a personal guarantee or seek a personal loan? 

If so, you can base the decision on your FICO score. This small business loan will typically offer you bank-like interest rates and terms of 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.

You can get approval for an unsecured small business loan in a few hours relative to small business loans based on your personal credit. The speed of approval to funding is one of the factors you would consider when deciding on the different types of loans available to you.

You can have what is considered bad credit. The most significant difference is the time to fund. An unsecured small business loan is regarded as fast cash and will fund in hours to one day, and merchant cash advances can fund in the same amount of time.

One advantage of cash advances is you only need six months in business. 

A small business loan based on personal credit may take 1 to 2 business days. Our SBA loans can fund as quickly as two weeks, and SBA loans are good credit business loans.

If you’re lucky, traditional business funding can take up to 90 days at a bank. Borrowers like to have their business loans available promptly. Unsecured small business loans are now the new “new” and are as common as bank business loans. 

These unsecured small business loans are a business finance option offered without traditional personal guarantees, and the business owner can use the funds as they see fit.

As a result, the business owner is typically put in a much better situation as they increasingly use these unsecured small business loans for business renovation, starting a new division or expansion, and 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 previously supported by traditional bank small business loans.

How Can I Get an Unsecured Business Loan?

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.

They believe they can receive funding from traditional lenders and financial institutions like banks or credit unions. The stark reality is that banks typically will not lend to most small business owners.

This truth results from your industry type, annual revenues, years in business, and the owner’s personal credit score. 

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 everything in life, there is a trade-off between the PG (personal guarantee) on a secured business loan vs. an unsecured small business loan.

To offset the secured loans and the collateral and personal and business assets posted to satisfy the bank’s requirements, the alternative lender will file a UCC lien on the loan they originate to you.

DEFINITION of ‘Blanket Lien’ aka the (UCC lien)

A lien gives the right to seize, in the event of nonpayment, nearly all types of assets and collateral owned by a debtor to satisfy the debt. A blanket lien gives a creditor legal interest in the debtor’s assets.

What Are the Best Unsecured Business Loan Options?

U.S. News selected the best alternative lenders for unsecured business loans after an in-depth analysis of the industry’s leading small company loan providers. 

The results combine crucial factors like customer service rankings, collateral needs, and available lending options.

Unsecured small business loans come in many different forms, including:

• SBA loan – 7(a) loans less than a $25,000 loan amount
• Online business term loans
• Bad credit business loans
• Commercial real estate loans
• Equipment leasing
• Factoring
• Inventory financing on an outstanding invoice
• Leasehold improvements
• Line of credit
• Merchant cash advance
• Payroll advance
• Working capital loans
• Other

There are also several different types of unsecured small business financing, such as:

• Accounts receivable financing
• Asset-based loans – secured loan
• Bridge loans
• Cash flow loans
• Credit card processing
• Debt consolidation loans
• Equity funding
• Financing for start-up companies
• Home equity lines of credit are secured loans
• Lines of credit
• Non-recourse loans
• Private placement loans
• Revolving line of credit
• Term loans
• Venture capital

The list goes on and on. There are hundreds of different types of unsecuritized small business loans. Some of these are better suited for specific industries or types of businesses, and others are more appropriate for larger firms with greater borrowing capacity.

If your business is looking for a specific type of unsecured small loan, Sunwise Capital can help. We can underwrite different types of unsecured small business loans, so let us know what you need, and we’ll make it happen for you!

If you want to understand and need more information about how our unsecured small business finance program works, don’t hesitate to contact us at 888-456-9223.

The Top 6 Banks That Will Give You a Small Business Loan in 2022

If your firm has been around for at least a year and you don’t need the money immediately, a bank is an option for a small business loan. Unfortunately, even with stellar credit, approvals can drag on for months, plus odds are these will be secured business loans.

Recent data from the Biz2Credit Small Business Lending Index shows that only roughly 15% of businesses have their loan applications approved by banks. 

That’s why it’s crucial to find a financial institution that provides access to the necessary business loan and has the loan funding needed to back it.

1. Bank of America
2. JPMorgan Chase
3. Citibank
4. Wells Fargo 
5. PNC
6. U.S. Bank

The Top 6 Online Unsecured Small Business Loan Companies

Business owners, are you looking for the best small business loan? While traditional banks still dominate the market for small business loans, there are now plenty of online alternatives. These companies offer quick approval times and flexible terms.

1. Sunwise Capital – Online term loan – $500K Up to 7 Years with Monthly Payment
2. OnDeck – Online term loan
3. Fundbox – Line of credit
4. Bluevine – Line of credit
5. National Funding
6. Rapid Finance

Final Thoughts

If you have a passion project that needs funding but need help figuring out where to turn, consider applying for an unsecured business loan from a top business online lender like Sunwise Capital. 

We offer loans ranging from $10,000 to $2M. With guaranteed low rates, it’s hard to beat the convenience of online lending. Plus, because you won’t need collateral (like a house), you can apply even if you haven’t built up any credit yet. And since you’re only borrowing money against your future earnings, you won’t have to worry about losing valuable assets.

Feel free to call Sunwise Capital or 888.456.9223 to speak directly to underwriting and see if you qualify.