Unsecured Small Business Loans

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Unsecured Small Business Loan Options

If you’re a small business owner, you may have looked into a small business loan as a source of financing. Small business loans typically are used to start or expand a business, purchase inventory and supplies, or strengthen a business’s solvency. In fact, 69 percent of small firms used some form of financing in 2016, according to the National Small Business Association.

However, traditional lenders, such as banks, typically require small business owners to offer some form of collateral for a business loan. Collateral can be business or personal related and include real estate, an auto title, equipment, savings and other assets.

The median small business has less than a month’s worth of cash available to pay expenses if there were to be a gap in the company’s cash flow, according to a 2016 JP Morgan Chase & Co. Institute study. Many small businesses don’t have collateral to pledge for a loan, or would have to resort to pledging personal assets like their home equity for collateral.

An unsecured business loan has an attractive advantage over a secured loan:

You don’t have to put up collateral, such as business equipment, inventory or property, to obtain financing in the first place. That means a lender cannot directly seize your assets if you fail to repay the loan.

However, even though an unsecured business loan is not backed by collateral, some lenders may still require you to sign a personal guarantee. A personal guarantee gives a lender the right to go after your personal assets (think a home, car or cash) to recoup the loan if you fail to repay the debt.

Unsecured small business loans are likely to carry a higher annual percentage rate than secured business loans, but they typically come with faster funding.

How We Evaluated Unsecured Business Loans In evaluating the best unsecured business loans, we considered a variety of lending options. The desire of some small business owners to quickly access funds without providing specific business or personal assets as collateral was top of our minds. None of the providers we reviewed require specific assets (e.g., business equipment, your home) as collateral, but most require a personal guarantee.

The criteria used to evaluate the best unsecured business loans based on small business owner wants and needs include:

  • Pricing and cost: What interest rates or fees you can expect each lender to charge when providing you with an unsecured business loan, including the expected APR.
  • Speed of funding: How quickly the unsecured business loan provider will provide you with the funds you need.
  • Minimum qualifications: What factors the lender considers when qualifying your business for an unsecured business loan.
  • Loan terms: What repayment terms you can expect to receive from each unsecured business finance provider.
  • Collateral and guarantees: With an unsecured business loan, you won’t be asked to pledge either specific business assets or personal assets as collateral. The providers we reviewed will likely ask you to provide a personal guarantee and blanket UCC filing.

The providers we reviewed provide two basic types of unsecured business loans: small business lines of credit (LOC) and short-term business loans. Both types of financing offer quick funding. With an LOC, you’ll have the flexibility of re-advancing the principal when you pay it back. With a term loan, you’ll be given longer to repay. Based on this review, OnDeck is our top choice for unsecured business loans. This is because you have a choice between an unsecured business loan and an unsecured business line of credit. Plus, OnDeck can help with of the widest ranges of businesses, since borrowers with scores as low as 500 can qualify and prime borrowers (700 or better credit score) can get the best rates.

The best unsecured business loans are:

OnDeck: Best Overall Unsecured Business Loans for Small Businesses

  An OnDeck unsecured business loan is best for prime borrowers (minimum 700 credit score) who can potentially qualify for special interest rates as low as 9% for up to $500,000. Plus, OnDeck is best for unsecured business loans up to $500,000 with credit scores as low as 500. OnDeck offers term loans and an unsecured business line of credit (LOC), and you might be able to get both products.

OnDeck Unsecured Business Finance Rates & Fees

OnDeck’s interest rates for its line of credit start at 13.99% and its term loan starts at 9%. Prime borrowers with strong creditworthiness and cash flows can benefit from OnDeck’s low starting interest rates. Similar to LoanBuilder, there is no prepayment penalty, but you’re responsible for the full interest charge if you pay early (although you’ll likely receive a prepayment discount on the interest).

The OnDeck Capital term loan rates and fees are:

  • Starting interest rates: As low as 9% simple interest for term loans up to 12 months and 9.99% AIR for term loans up to 36 months (prime borrowers with minimum 700 credit scores can potentially get the lowest rates)
  • Expected APR: ~30% to 50%
  • Origination fee: 0% to 4% of your loan amount
  • Prepayment penalty or termination fee: No prepayment penalty, but you owe the full interest charge if you repay early, with a potential prepayment discount applied
  • Additional fees: None
  • The OnDeck Capital line of credit rates and fees are:
  • Starting interest rates: As low as 13.99% APR (prime borrowers with minimum 700 credit scores can potentially get the lowest rates)
  • Expected APR: ~30% to 50%
  • Origination fee: $20 per month maintenance fee, waived for six months if you draw $5,000 within five days of account opening
  • Prepayment penalty or termination fee: No prepayment penalty, but you owe the full interest charge if you repay early, with a potential prepayment discount applied
  • Additional fees: None

OnDeck’s lowest starting rates are comparable to those offered by the other lenders on our list, with APRs falling in the range of 30% to 50%. BlueVine, Kabbage, and Fundbox all fall into this range as well.

OnDeck Capital Unsecured Business Finance Terms

The unsecured business line of credit product offered by OnDeck is revolving, meaning you can re-borrow principal on the LOC as many times as you repay it. You’ll be required to pay back LOC advances in six months. OnDeck offers two unsecured business term loan products: a shorter term loan (three to 12 months) and a longer short-term loan (15 to 36 months).

The loan terms you can expect from OnDeck Capital for its unsecured term loan include:

  • • Loan amount: $5,000 to $500,000
  • Repayment term: Three to 36 months
  • Repayment schedule: Daily or weekly
  • Collateral: Blanket UCC filing on business assets
  • Personal guarantee: Required

The loan terms you can expect from OnDeck Capital for its unsecured line of credit include:

  • Loan amount: Up to $100,000
  • Repayment term: Six months
  • Repayment schedule: Weekly
  • Collateral: Blanket UCC filing on business assets
  • Personal guarantee: Required

Of the providers on our list, OnDeck’s maximum term loan amount of $500,000 is matched only by LoanBuilder. However, the longer repayment term, of 36 months, offered by OnDeck may be more appealing to some borrowers than LoanBuilder’s 52-week maximum term.

OnDeck Unsecured Business Loan Speed of Funding

With an OnDeck unsecured business loan, it takes about 10 minutes to complete the online application and you can be approved within hours. Your initial funding can happen as soon as the next business day. Ongoing advances for its unsecured business line of credit are funded within 24 hours.

OnDeck Unsecured Business Loan Minimum Qualifications

OnDeck Capital will evaluate you for an unsecured business loan by considering:

The time in business and annual revenue requirements are stricter than some competition we reviewed. However, at a minimum of 600, the credit score qualifications for OnDeck’s unsecured term loan products are better than most of the other providers we reviewed.

What OnDeck Unsecured Business Loans Are Missing

While OnDeck doesn’t charge prepayment penalties, you don’t benefit from paying off your loan early. This is because, as with LoanBuilder, the amount you owe is determined at the time your loan is originated, and is based on your full repayment term. You’ll owe the full interest charge if you pay early, although you may receive a prepayment discount.

What Users Think About OnDeck

We compiled OnDeck reviews from around the web and our own website. We determined OnDeck generally has positive ratings. Customers who gave positive OnDeck Capital reviews said its professional and friendly customer service made the loan process quick and easy. Customers who provided critical OnDeck Capital reviews said its fees were costly compared to other similar companies. Read more on our OnDeck reviews page.

How to Apply for an OnDeck Unsecured Business Loan

You can get pre-qualified online after completing an application, which takes about 10 minutes. Once that’s complete, you need to connect your business checking account to OnDeck, which will verify your income and approve you within hours. You can complete the process and receive the funds you need in as soon as one business day.


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BlueVine: Best Unsecured Business Line of Credit

BlueVine is best for its unsecured business line of credit up to $250,000, and is also good for businesses with only six months in operation. The minimum qualifications required by BlueVine are competitive, with weekly or monthly repayment options. BlueVine’s pricing is transparent, comparing favorably with others on our list, with as low as 4.8% simple interest per month.

BlueVine Unsecured Business Line of Credit Rates & Fees

BlueVine is straightforward with its pricing and costs, carrying interest rates as low as 0.8% simple interest. This is competitive when compared to other unsecured business finance providers we reviewed. BlueVine does a great job of being transparent about its costs and fees.

The typical rates, costs, and fees you can expect from BlueVine are:

  • Starting interest rates: As low as 0.8% simple interest per month
  • Expected APR: ~30% to 50%
  • Origination or maintenance fees: None
  • Prepayment penalty or termination fees: None
  • Additional fees: $15 bank wire fee (ACH is free)

Despite being advertised differently, BlueVine’s lowest offered interest rate is in line with competitors such as OnDeck. OnDeck’s short-term loan has a starting interest rate of 9%; if you annualize BlueVine’s monthly simple interest, it equates to a starting rate of 9.6%.

BlueVine Unsecured Business Line of Credit Terms

As with most of the other providers, the unsecured business loan offered by BlueVine is a revolving line of credit. You benefit from applying once and using the unsecured business loan over again once the principal is repaid. The terms it offers are similar to the other providers, but it allows flexibility to choose weekly or monthly payments for borrowers with a minimum 650 credit score.

The typical unsecured line of credit terms offered by BlueVine include:

  • Loan amount: $5,000 to $250,000
  • Repayment term: Six or 12 months
  • Repayment schedule: Weekly or monthly
  • Collateral: Blanket UCC filing on business assets
  • Personal guarantee: Required

Both Kabbage and Balboa Capital offer similar loan terms for their unsecured business loans, with maximum loan amounts of $250,000. Like BlueVine, Kabbage offers repayment terms of six or 12 months. However, Balboa Capital allows for a maximum term of 24 months.

BlueVine Unsecured Business Line of Credit Speed of Funding

BlueVine’s online application can be completed in 20 minutes or less, and you can receive funding as soon as the next business day. Once your unsecured business loan is established, you can receive funding the next day for free (via an ACH transfer) or the same day for a $15 fee (via a bank wire).

BlueVine Unsecured Business Line of Credit Minimum Qualifications

BlueVine will evaluate you for an unsecured business line of credit by considering:

  • Credit score (check your score for free):
  • Minimum 600 for a six-month term with weekly payments
  • Minimum 650 for a 12-month term with monthly payments
  • Time in business: Minimum six months
  • Annual revenue:
  • Minimum $100,000 for a six-month term with weekly payments
  • Minimum $500,000 for a 12-month term with monthly payments

In addition to filling out BlueVine’s online application, you’ll also need to provide BlueVine with a connection to your checking account or three months of your most recent bank statements. These qualifications compare favorably to the other providers we reviewed, with the minimum six-month time in business requirement making it an excellent option for newer businesses.

What a BlueVine Unsecured Business Line of Credit Is Missing

While BlueVine offers a great unsecured business line of credit, a minimum 600 credit score is required. All the other providers with repayment terms greater than six months offer a lower credit score threshold. This is a drawback for businesses that have bad credit. Borrowers with a credit score below 600 may be better served by Kabbage or Fundbox.

What Users Think About BlueVine

We considered BlueVine reviews from around the web. We determined BlueVine generally has positive ratings. Positive BlueVine reviews came from customers who were impressed with a helpful customer support team. Critical BlueVine reviews came from businesses that weren’t happy about being denied financing. Read more on our BlueVine reviews page.

How to Apply for a BlueVine Unsecured Business Line of Credit

Applying for an unsecured business line of credit with BlueVine using its online application takes 20 minutes or less. When approved, you can get funding of up to $250,000 as soon as the next business day. The total time from application to funding is about one to three days. BlueVine’s application process is quick and easy to complete.


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Start Up Line of CreditShort Term LoansLong Term LoansBusiness Lines of Credit
BitX Funding start-up financing program connects entrepreneurs and business owners with $25,000 – $150,000+ in unsecured business lines of credit. This program can provide you with funding in as little as 10 days and is typically offered with 0% interest financing for the first 6-18 months.Designed to help meet short-term needs, such as unexpected events, or to take advantage of a great deal. Typically, most small business owners qualify.BitX Funding offers true long-term business loans with automatic monthly payments. If you are looking to Fund larger projects that pay back over a longer term with rates as low as 5.49% this option may be right for you?Business lines of credit allow you to draw funds whenever you need. Funds will be deposited directly into your bank account. Repay via automated weekly debits over six months. Your available balance replenishes as payments clear. Lines of credit can go as high as $100,000 with interest rates averaging around 13%.
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BitX Funding is the online marketplace for small business owners looking to fund a project. We specialize in connecting small business owners with lenders who will compete for your business. We believe small business owners drive the economy and we are passionate about helping your company reach its full potential.

You can reach a loan specialist by toll-free at 1-800-824-2407, or email at info@bitxfunding.com or applying online here and we can guide you on which loan is the best fit for your business.

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