An unsecured business loan has many advantages over a secured loan. You are not required to risk collateral, such as your home. If your business is struggling and you are unable to repay the loan, the lender will not take your assets. While you do not need collateral to qualify for an unsecured business loan, you may still be required to show that you have strong business revenues, multiple years of operating history, and solid personal credit. Unsecured business loans carry a higher annual percentage rate compared to secured business loans, however they also come with quicker funding. Here are the top lender choices available on the market as you look for an unsecured small business loan.
OnDeck is a preferred option for small business owners who need capital to help manage cash flow or deal with emergency expenses. OnDeck does not have as many requirements as other competitors. OnDeck does not require a lien on your assets, however you must sign a personal guarantee that makes you liable for repaying the debt if your business is unable to.
StreetShares should be considered an option if you have not established a business history yet, because the lender only requires a minimum of one year of experience in business. Be aware that the minimum line of credit that you can qualify for is around 20% of your actual revenue.
Lending Club offers both lines of credit and term loans. The APRs on these products fluctuates, which makes it more expensive than other types of Small Business Administration loans. However, they are one of the lowest among online unsecured funding options. Collateral is required on loans and high lines of credit. You also need at least two years of business experience.
Kabbage is an attractive option for borrowers who do not have good credit, but are in need of some cash to manage expenses in the short term. Kabbage does not have a minimum qualifying credit score, and you can receive funding quickly. Once you are approved, you can get access to your funds immediately. Try to avoid Kabbage if you need money for a large expense, due to its high APR and short repayment time frame.
Fundbox is a good choice for businesses that are in need of short term working capital, as the lender can provide a high line of credit. The borrowed amount must be repaid every week and you can receive funding on your next business day. To qualify for a loan, you must have at least six months of business experience.
Remember to do your research to find the right unsecured small business loan for your situation. Make sure that your small business loan matches up with the amount of revenue that you bring in.