Unsecured Business LoansAn unsecured loan is a loan that is supported by the borrower's creditworthiness, rather than with any type of collateral, also called a signature loan or a personal loan.
Unsecured Business Loans vs Traditional Loans
An Unsecured Business Loan has an attractive advantage over a Secured Loan. One big difference is that Small-business owners don’t have to put up collateral.
When the loan is secured, the assets you use as collateral are at risk — perhaps even your home. If your business goes south and you can’t pay the loan, the lender can take your home away.
Unsecured loans, on the other hand, place the burden of the risk on the lender. These loans will likely carry a slightly higher APR than secured business loans, but they typically come with higher approval rates and faster funding. Although you don’t need collateral to qualify, you will need to bring in an average of at least $10,000 a month in business revenue, several months of operating history. There is no industry restriction with an unsecured business loan, nor do you need a perfect credit score.