Unsecured Small Business Loans
Unsecured small business loans are a perfect form of financing for small business owners, with limited assets, and therefore an inability to put up collateral for a traditional loan. They can provide immediate funding, have a relatively low threshold for qualification, and can be structured for an amount and repayment period that makes the most sense for your business needs.
Crucially, because they are unsecured, and typically have a low minimum credit score requirement, they can be one of the best and most accessible forms of funding for those with bad credit.
Unsecured small business loans with bad credit can have the additional benefit of helping to drastically improve a business’ credit score over the long-term, increasing access to capital or improving interest rates for future loan activities.
Unsecured Small Business Loan Guide
- What Are Unsecured Business Loans?
- Is a Business Line of Credit Right for My Business?
- What Will Business Financing Through an Unsecured Business Loan Cost?
- How Do I Qualify for an Unsecured Small Business Loan?
- What Are the Main Uses of an Unsecured Small Business Loan?
- How Do I Apply For An Unsecured Small Business Loan With Bizfly Funding?
- UNSECURED SMALL BUSINESS LOAN RECAP
- FAQ’S
What Are Unsecured Business Loans?
Unsecured small business loans are a form of business loan, that may be short or medium term, and provides up-front lump-sum funds to businesses for them to use as they see fit. Crucially, the “unsecured” portion of the name defines that the loan does not have any collateral requirements.
This can be advantageous for new or smaller businesses that don’t have considerable assets to put up for a loan, or who do not wish to risk those assets in exchange for business funding.
The downside is this means borrowers typically pay a higher interest rate than on a collateralized or secured loan (though it is still relatively low compared to other forms of business credit available, especially for those who have a poor credit score or limited credit history).
Is an Unsecured Small Business Loan Right for My Business?
The requirements for an unsecured small business loan are fairly generous, stipulating a relatively low time in business, fairly low minimum credit score, and fairly modest minimum monthly revenues.
If you don’t have assets, or don’t wish to risk assets, to obtain funding from a traditional business loan, or your credit score or credit history are too limited to qualify, then an unsecured small business loan may be a perfect choice to help finance and grow your business.
Ultimately, like all financial decisions, you’ll have to weigh the pros and cons, and look at your options, to determine if an unsecured small business loan is the best choice for you and your unique situation.
What Will Business Financing Through an Unsecured Business Loan Cost?
A critical question for all business-oriented customers is, “What will this cost me?” and it’s no different with an unsecured business loan. The exact cost will vary depending on factors such as your time in business, credit score, revenue, how much you borrow, and over what term you agree to repayment.
Put in broad terms, however, these loans tend to cost more than a traditional (collateralized/secured) business loan, but less than loans targeted to the extreme low end of credit scores.
An average interest rate in the range of 20-30% is not unusual, meaning that for every $100,000 borrowed, you will typically have to pay around $25,000 in interest charges. Perhaps far more important than the basic cost is to ask what other options you have in terms of business financing.
Often, an unsecured business loan may be the most financially viable option to fund your operations, expenses, and projects, to receive funding now without putting up homes, property, equipment, and other assets for collateral.
How Do I Qualify for an Unsecured Small Business Loan?
Like most of the loan products from BizFly Funding, there are only a few basic requirements in order to qualify for the loan. While no lender can guarantee approval, so long as you meet the basic minimum requirements, your application has a good chance of resulting in funds for your business.
The basic minimum requirements for an unsecured small business loan at BizFly Funding include:
- Estimated Business Loan Term: 2 – 36 Months
- Your business must have been in operation for at least 6 months as of the time of your application
- You must have a minimum credit score of at least 500
- You must have a minimum monthly revenue of $10,000 or more (income thresholds may be higher for larger loans, corresponding to the size and term of the loan)
- Loan Rates: 9% – 45%*
- Min Business Loan Amount: $5,000
- Max Business Loan Amount: $1,000,000
- Max Number of Negative Days: 4 Within a Month
- Rates depend on duration of funding
What Are the Main Uses of Unsecured Small Business Loans?
Unsecured business loans, like most of the loan products we offer, can be used as you see fit, to pay for business projects and activities that you deem necessary, without restrictions.
However, given the nature and interest rates of the loans, some financing activities comprise more common uses for unsecured small business loans than others.
Some of the uses that our clients report for their unsecured small business loan funds include:
- Managing business seasonality, and allowing the purchasing or funding of products and services through leaner income times, in support of high-sales or high-service (and correspondingly high-revenue-generating) periods of operation
- Paying for legal expenses or other atypical, non-cyclical or linear operational expenses, such as bursts of R&D, marketing, strategic partnerships, and other activities
- Increasing capital leverage and borrowing power to fund ongoing business needs and more strategically invest in people, property, equipment, and inventory
- Investing in emerging technologies or providing early seed money for strategic or tactical investments to grow your business
How Do I Apply for an Unsecured Small Business Loan With Bizfly Funding?
With BizFly Funding, you can apply for an unsecured small business loan, through our website, in a very simple, quick, and easy process. Pre-approval can be received in as little as 30 minutes, and it will not affect your credit score.
- Fill out our One Page Application.
- Submit the last 3 months of your Business Bank Statements.
- It is free and will not affect your credit score.
- You must be in business for a minimum of 6 months - No-Startups.
As soon as this is submitted completely, it will be submitted to our underwriters and our Funding Specialist will contact you with a few offers to choose from.
Get an approval within hours after your application is processed.
- Choose one of the offers provided by the Funding Specialist and provide a few extra documents to complete your submissions.
- Once the underwriters have received the full submissions package – the funds will hit your business bank account within 1-2 business days.
- In some cases, same day funding can be applied.
Unsecured Small Business Loan Recap
For many businesses, unsecured small business loans can be an ideal form of funding. This is especially true when limited credit history or poor credit scores exist – unsecured small business loans with bad credit can often be the only kind of capital or financing available.
The requirements are relatively low, and no collateral is required, which makes these loans extremely valuable for many small businesses, who may not have (or wish to risk) assets as collateral for a loan.
- No collateral requirement
- Reasonable interest rates for an unsecured loan
- Variable loan amounts and repayment terms
- Low minimum requirements for qualification
If you have additional questions about an unsecured small business loan from BizFly Funding, need more information, or help with your loan application, our support team is more than happy to assist you!
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Unsecured Small Business Loan FAQ’S
There is a possibility of extending the loan period, however, it depends on several factors. Speak with your loan advisor.
This depends on whether it was personal or business, and how long ago the bankruptcy was filed.
A minimum of six months in business is required for our unsecured financing.
We take pride in the privacy we offer, we never sell your information to anyone.
There have been cases where borrowers got funded within a few days after they submitted an application. It just depends on how prepared the applicant is with their documents as well as several other factors.
It is basically stating that you did not lie on your application, and that you agree to pay back the loan according to the terms in the contract. There are many different types of personal guarantees so be sure to read what your liability may be in the case of default.
There are no restrictions on how you use the money.
Yes. You may be eligible for better rates and terms by having a better credit profile. However, by being approved and paying off your unsecured business loan on time- you will increase your credit as you would with any traditional loan.
