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Best Unsecured Business Loans of June 2025

Written by

Randa Kriss

Edited by

Sally Lauckner

Last updated on June 4, 2025

Fact checked and reviewed
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Unsecured business loans can offer fast funding because they don't require physical collateral, but your business and personal assets may still be at risk. Compare options today by selecting your business entity.

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How much do you need?

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We’ll start with a brief questionnaire to better understand the unique needs of your business.

Once we uncover your personalized matches, our team will consult you on the process moving forward.

Best Unsecured Business Loans From Our Partners

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Best Unsecured Business Loans From Our Partners

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Fora Financial - Online term loan

4.7 

Best for borrowers with bad credit

Max loan amount
$1,500,000
Min. credit score
570

Fora Financial - Online term loan

Best for borrowers with bad credit

4.7 
Max loan amount
$1,500,000
Min. credit score
570

Accion Opportunity Fund Small Business Working Capital Loan

4.9 

Best for women- and minority-owned businesses

Max loan amount
$250,000
Min. credit score
600
Est. APR
8.49-24.99%

Accion Opportunity Fund Small Business Working Capital Loan

Best for women- and minority-owned businesses

4.9 
Max loan amount
$250,000
Min. credit score
600
Est. APR
8.49-24.99%

Bank of America Business Advantage Unsecured Term Loan

5.0 

Best for long-term loans

Max loan amount
Undisclosed
Min. credit score
700

Bank of America Business Advantage Unsecured Term Loan

Best for long-term loans

5.0 
Max loan amount
Undisclosed
Min. credit score
700

OnDeck - Online term loan

4.8 

Best for short-term loans

Max loan amount
$250,000
Min. credit score
625
Est. APR
27.20-99.90%

OnDeck - Online term loan

Best for short-term loans

4.8 
Max loan amount
$250,000
Min. credit score
625
Est. APR
27.20-99.90%

Headway Capital - Line of credit

4.7 

Best for flexible qualifications

Max loan amount
$100,000
Min. credit score
625
Est. APR
35.00-80.00%

Headway Capital - Line of credit

Best for flexible qualifications

4.7 
Max loan amount
$100,000
Min. credit score
625
Est. APR
35.00-80.00%

Fundbox - Line of credit

4.9 

Best for startups

Max loan amount
$250,000
Min. credit score
600
Est. APR
36.00-99.00%

Fundbox - Line of credit

Best for startups

4.9 
Max loan amount
$250,000
Min. credit score
600
Est. APR
36.00-99.00%

Bluevine - Line of credit

5.0 

Best for fast loans

Max loan amount
$250,000
Min. credit score
625
Est. APR
14.00-48.00%

Bluevine - Line of credit

Best for fast loans

5.0 
Max loan amount
$250,000
Min. credit score
625
Est. APR
14.00-48.00%

How Much Do You Need?

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A closer look at our picks for the best unsecured business loans

Fora Financial: Best for borrowers with bad credit

Pros

Cash can be available quickly.

Get a discount for prepaying.

Low minimum credit score requirement.

Cons

Charges a factor rate that makes it more difficult to compare costs with other lenders.

Can’t build business credit.

Longest loan term is 18 months.

Charges an origination fee.


Accion Opportunity Fund: Best for women- and minority-owned businesses

Pros

Loan amounts from $5,000 to $250,000.

Customized loan terms.

No prepayment penalty.

Cons

UCC lien filed for loans greater than $50,000.

Slower processing speed compared with online lenders.

Not available in all U.S. states.


Bank of America: Best for long-term loans

Pros

Bank loan with competitive interest rates.

Bank of America’s Preferred Rewards program can offer interest rate discounts and other perks.

Cons

Can be slow to fund.

Prepayment fees may apply to early repayments.

Must be an existing Bank of America customer to apply online.

Charges an origination fee.


OnDeck: Best for short-term loans

Pros

Cash can be available within the same business day (does not apply in California or Vermont).

Accepts borrowers with a minimum credit score of 625.

Streamlined application process with minimal documentation required.

Can be used to build business credit.

Cons

Cannot fund North Dakota-based businesses.

Requires frequent (daily or weekly) repayments.

Interest rates can be high compared with traditional lenders.

Charges origination fee.


Headway Capital: Best for flexible qualifications

Pros

Flexible qualification requirements.

No prepayment penalties.

Funds available by next business day after approval.

Cons

Most borrowers are subject to a 2% draw fee.

Not available in all U.S. states.


Fundbox: Best for startups

Pros

Financing available within one business day after approval.

Simple application with minimal documentation required.

Low minimum credit score, time in business and annual revenue requirements.

No prepayment penalties, account maintenance fees or inactivity fees.

Cons

Rates are high compared with traditional banks.

Weekly repayments required over a short term (maximum of 24 weeks).


Bluevine: Best for fast loans

Pros

Cash can be available within 12 to 24 hours.

Can be used to build business credit.

Low minimum credit score requirement.

Cons

Requires weekly payments.

Not available in North Dakota, South Dakota or Nevada.

Rates can be high compared with traditional lenders.


What is an unsecured business loan?

An unsecured business loan is a type of financing that doesn't require you to pledge physical collateral, which are assets like business equipment, inventory or real estate that the lender can take if you fail to repay your loan. But even though physical collateral isn’t required, that doesn’t mean you’ll necessarily be off the hook if you can’t repay an unsecured loan; most unsecured loans are backed by either a personal guarantee or Uniform Commercial Code lien.
You can get an unsecured business loan from banks, credit unions and online lenders. You’ll find the most competitive interest rates through banks and credit unions, while online lenders tend to have more flexible qualification requirements.
Unsecured business loans usually fund faster than secured business loans because the lender doesn’t have to check the value of your collateral. The lack of collateral, however, also makes them riskier for lenders. That’s why unsecured loans usually come with higher interest rates and may require personal guarantees or UCC liens.
Personal Guarantee vs. UCC Lien
A personal guarantee holds you personally responsible for the debt if your business cannot pay, meaning the lender can seize your personal assets to recover its losses in the case of default.
A UCC lien gives a lender the right to seize your business assets if you’re unable to repay your loan. Your lender may file a lien on specific assets, or it may file a blanket lien, which allows it to seize any business assets necessary to recover its losses.

Types of unsecured business loans

There are many different types of unsecured business funding options, including:

Business term loans

Term loans are likely what you imagine when you think of a business loan. These loans are lump sums of capital that you borrow from a lender and repay over a set period of time. Term loans can be a good option if you need to make a specific investment or purchase for your business.

Business lines of credit

Credit lines are a flexible form of financing that allow you to borrow up to a certain limit and only pay interest on the money you borrow. You then repay the funds and continue to draw on the line. Unsecured business lines of credit can be used for working capital, as well as other short-term expenses. These products are also commonly used as emergency funds.

Invoice factoring

Invoice factoring lets you sell your unpaid invoices for cash advances. The factoring company takes control of your invoices and is responsible for collecting payments from your customers. Although factoring companies may want to see established invoicing practices and a certain amount of time in business, you may not have to provide a personal guarantee — since you’re selling an asset to them directly.

Merchant cash advance

With an MCA, a merchant cash advance company advances you cash based on your sales, and you repay them with a portion of your future sales. This type of financing is usually easier to qualify for than other business loans. Merchant cash advances are risky and expensive, however, and should be treated as an option of last resort.

How to get an unsecured business loan

Follow these steps to get an unsecured business loan:

1. Determine your financing needs

Consider how much funding you need and how much debt you can afford. NerdWallet’s business loan calculator can help you estimate payments and interest costs.

2. Evaluate your business’s qualifications

Since you’re not securing your loan with collateral, your lender will rely more heavily on traditional business loan requirements, such as personal credit score, annual revenue and time in business.
Although online lenders often accept startups and borrowers with bad credit, these businesses may receive higher interest rates. Established businesses with good credit and strong finances will be able to access the most desirable rates and terms.

3. Compare lenders

Research different lenders to find the best choice for your business. As you compare options, you should think about factors such as maximum loan amounts, interest rates, repayment terms and fees. You’ll also want to consider a lender’s application process, time to funding, customer service and reputation.

🤓 Nerdy Tip

Keep an eye out for predatory lenders that take advantage of borrowers — particularly borrowers who have poor credit or urgent funding needs — with unfair or misleading loan terms. To avoid these lenders and scams, look for transparent terms and rates and avoid lenders that pressure you to act quickly or have terms that seem too good to be true.

4. Submit an application

Although application requirements vary by lender, you’ll typically need to provide:
  • Basic information about you and your business.
  • Business and personal tax returns.
  • Business and personal bank statements.
  • Financial statements.
Online lenders often expedite the underwriting process by allowing you to connect your financial accounts directly to their platforms. You may be able to get a business loan from an online lender in as little as 24 hours. Banks and credit unions, on the other hand, may take several days, or even weeks.

How to compare unsecured business loans

Don't be afraid to shop around for a business loan. Comparing offers from a few lenders can help you get the best deal possible. Here are some things to look out for when sizing up unsecured loans for your business:
  • Loan amount. Some lenders may not offer the amount you were hoping for. If you borrow less than what you need to fund your business goals, you may risk falling short of revenue targets, making it harder to pay off the loan.
  • Interest rate and fees. These can vary widely across lenders. That’s why it’s best to compare each loan offer’s APR, which includes both the interest rate and any upfront fees. You can also use our business loan calculator to compare total costs across the life of each loan.
  • Guarantee requirements. While you’re not required to put up a specific business asset as collateral for unsecured loans, you’ll likely be asked to guarantee the loan via a personal guarantee and/or Uniform Commercial Code lien instead. Make sure you know what you’re risking before putting pen to paper. 
  • Repayment terms. How long you have to repay your loan and how often you’re required to make payments all vary from lender to lender. Make sure your business has enough positive cash flow before committing to frequent payment terms or shorter-term loans. And don’t forget to ask about prepayment penalties — these are fees some lenders charge when you make additional payments.

Pros and cons of unsecured business loans

Pros

Fast access to funds.

Physical collateral not required.

Startups and borrowers with bad credit may qualify.

Cons

APRs typically higher than secured business loans.

Personal guarantee or UCC lien likely required.

Less desirable terms (e.g., lower loan amounts, shorter repayment terms).

Alternatives to unsecured business loans

Here are a few other financing options to consider (that don’t require collateral):
  • SBA loans. If you only need $50,000 or less in financing, an SBA 7(a) small loan, SBA Express loan or SBA Export Express loan may not require collateral. But if you need more than that, an SBA lender may require collateral. Read more about SBA loan collateral requirements.
  • Personal loans. If you have strong personal credit and don’t need a lot of money, an unsecured personal loan may help you get funds for your business without putting up collateral. 
  • Business credit cards. For newer businesses without collateral, steady revenue or an extensive track record, business credit cards can help manage small, daily expenses or unexpected costs. Just keep in mind that high interest costs can add up quickly if you carry a balance.
  • Small-business grants. Although they can be competitive and may not fully cover your funding needs, grants provide free money for those who qualify. NerdWallet includes a large list of small-business grants to help you get started.

Best unsecured business loans, in summary

Frequently asked questions

Last updated on June 4, 2025

Methodology

NerdWallet’s review process evaluates and rates small-business loan products from traditional banks and online lenders. We collect over 30 data points on each lender using company websites and public documents. We may also go through a lender’s initial application flow and reach out to company representatives. NerdWallet writers and editors conduct a full fact check and update annually, but also make updates throughout the year as necessary.
Our star ratings award points to lenders that offer small-business friendly features, including:
- Transparency of rates and terms. - Flexible payment options. - Fast funding times. - Accessible customer service. - Reporting of payments to business credit bureaus. - Responsible lending practices.
We weigh these factors based on our assessment of which are the most important to small-business owners and how meaningfully they impact borrowers’ experiences.
NerdWallet does not receive compensation for our star ratings. Read more about our ratings methodology for small-business loans and our editorial guidelines.

Wondering if you qualify?

It’s possible to get a business loan even if you have bad credit. Bad-credit business loans are available from alternative sources, like online or nonprofit lenders.

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