Finder is committed to editorial independence. While we receive compensation when you click links to partners, they do not influence our opinions or reviews. Learn how we make money.

Compare secured vs. unsecured business loans

Not sure if a secured or unsecured business loan is more suited for your company's needs? Find out here.


Fact checked

Editor's choice: SmartBiz

SmartBiz logo
  • Large network of SBA lenders
  • Low potential APR
  • Loans from $30,000-$5 million
Check eligibility
If you’ve decided to apply for financing for your business, finding the right type of loan is an important next step. There’s a range of financing options available, but two of the most common business loan types are secured and unsecured loans. Read further to see how these two loans compare and which is best for your business.

What is the difference between secured and unsecured business loans?

The key difference between secured and unsecured business loans is the guarantee that is required — secured business loans require you to have assets, whether they be business or personal, to attach to the loan, while unsecured business loans do not.

Secured business loans are typically offered by banks and can help a business access larger amounts. This is because lenders are taking on less of a risk if they know they can recoup their losses should the loan not be repaid. Unsecured business loans tend to come with lower loan amounts and higher rates as the loan is more of a risk.

Secured and unsecured business loans you can compare

ProviderUnsecured Loans Offered?Secured Loans Offered?Collateral RequiredOffer Details
Excel Capital ManagementGreen checkmak IconGreen checkmak IconReceivables or assets (commercial real estate, inventory or heavy equipment)Loan options including split funding, term loans, equipment financing, invoice factoring, business lines of credit and more
LendingClubGreen checkmak IconGreen checkmak IconUCC lien on business assets is required for loans over $100,000Peer-to-peer lender offering small business loans up to $500,000
Go to site
Main Street Finance GroupGreen checkmak IconGreen checkmak IconAssets (commercial real estate, inventory or heavy equipment)Business financing up to $1,000,000 through merchant cash advances, long-term unsecured loans, equipment financing, and lines of credit
FundboxGreen checkmak IconRed Cross IconNoneLines of credit and invoice financing with a max draw limit of $100,000
Go to site
National Business CapitalGreen checkmak IconRed Cross IconNoneBusiness equipment financing and leasing services, lines of credit, and small business loans with a max financing amount of $5,000,000
FastPayGreen checkmak IconRed Cross IconNoneInvoice financing for digital media companies
PayPal Working CapitalGreen checkmak IconRed Cross IconNoneShort-term loans giving e-commerce businesses up to a 25% advance on future PayPal sales or up to $300,000
SnapCapGreen checkmak IconRed Cross IconNoneTerm loans, working capital, expansion and inventory loans with a max draw amount of $600,000
OnDeckRed Cross IconGreen checkmak Icon
  • General lien on business assets
  • Personal guarantee
Term loans up to $100,000 and lines of credit with a max draw amount of $250,000
KabbageRed Cross IconGreen checkmak Icon
  • Personal Guarantee
  • General lien on your business assets (in certain cases only)
Lines of credit with a max draw amount of $250,000
AccionRed Cross IconGreen checkmak IconPersonal guaranteeMicroloans for small businesses with a max amount of $250,000
BlueVineRed Cross IconGreen checkmak Icon
  • General lien on business assets
  • Personal guarantee
Lines of credit and invoice financing with a max amount of $5,000,000
FundationRed Cross IconGreen checkmak Icon
  • Personal guarantee
  • UCC-1 on business assets
Lines of credit and business term loans with a max amount of $500,000
Funding CircleRed Cross IconGreen checkmak Icon
  • Lien on business assets
  • Personal guarantee from primary business owners
Peer-to-peer lender offering fixed-term business loans with a max amount of $500,000

What is a personal guarantee?

A personal guarantee is a legally bound promise that the borrower will repay the loan with personal funds if the business fails. Keep in mind most business lenders require a personal guarantee to protect them against major losses if you default.

You may also often see a general lien requirement. A general lien is a lender’s right to keep your business assets in the event you’re unable to repay the loan.

What is considered a valuable asset for security?

When you’re borrowing against your assets, your loan is secured by the residual value that your assets represent. If you’re unable to repay the loan, the lender may seize your assets to cover the outstanding amount. Any of the following could be used as security:

  • Personal or commercial real estate
  • Vehicles
  • Business equipment
  • Investment accounts

You can also borrow against the valuation of your business as a whole.

25+ types of collateral you can use to secure different types loans

Is an unsecured or secured loan best for my business?

A secured business loan may be a good option for you if:
  • You’re looking to borrow a large amount of money over $1 million.
  • You have several assets you can secure the loan against.
  • You are in a position to make repayments over a long period of time.

You can usually find secured business loans from banks and lenders that offer SBA loans, but some alternative business lenders also offer secured loan options as well.

You may want to consider an unsecured business loan if:

  • You have a small- to medium-sized business with few or no valuable assets.
  • Your business is established and has growing monthly revenue.
  • You need a quick cash injection.
  • You can repay the loan over a period of one to five years.

Many lenders offer unsecured business loans, though you’ll likely need to meet stricter eligibility requirements because the lender is taking on more risks. As a minimum, you’ll generally need to be in business for at least a year and have monthly revenue of at least $10,000.

Compare top business loan providers

Data indicated here is updated regularly
Name Product Filter Values Loan amount APR Requirements
First Down Funding business loans
$4,000 – $300,000
5.49% to 22.79%
At least 1 year in business, an annual revenue of $100,000+, and a minimum credit score of 300
Alternative financing up to $300K with highly competitive rates.
Lendio business loan marketplace
$500 – $5,000,000
Starting at 6%
Operate business in US or Canada, have a business bank account, 560+ personal credit score
Submit one simple application to potentially get offers from a network of over 75 legit business lenders.
$2,500 – $5,000,000
7% to 30%
$300,000+ of annual revenue, 680+ personal credit score, in business for 3+ years
Get connected with short-term funding, SBA loans, lines of credit and more.
Kickpay e-commerce loans
$20,000 – $1,000,000
Not applicable
At least $250,000 in the past 12 months of revenue, e-commerce business, use a 3rd party fulfillment center for storing and shipping inventory, at least one US location.
Get a loan for your e-commerce business based on your sales history.
Credibly Business Loans
$5,000 – $250,000
6+ months in business, $180K annual business revenue, 500+ credit $15K+ in monthly deposits
Funding to cover business expenses with daily or weekly repayments.
$30,000 – $5,000,000
4.75% to 7.00%
650+ personal credit score, US citizen or permanent resident, 2+ years in business, $50,000+ annual revenue, no outstanding tax liens, no bankruptcies or foreclosures in past 3 years
Get funding for your small business with a government-backed loan and extended repayment terms.
LendingClub small business loans
$5,000 – $500,000
9.77% to 35.98%
12+ months in business, $50,000+ in annual sales, no bankruptcies or tax liens, at least 20% ownership of the business, fair personal credit score or better
With loan terms that vary from 1 to 5 years, enjoy fixed monthly payments and no prepayment penalties through this award-winning lender.
Monevo Business Loans
$500 – $100,000
3.99% to 35.99%
Credit score of 500+, legal US resident and ages 18+.
Use this connection service to get paired with a loan you can use for business.

Compare up to 4 providers

Bottom line

There isn’t one right loan solution for all businesses. By comparing your options and weighing up the pros and cons of each, you can find what’s right for your business.

Frequently asked questions

Ask an Expert

You are about to post a question on

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked provides guides and information on a range of products and services. Because our content is not financial advice, we suggest talking with a professional before you make any decision.

By submitting your comment or question, you agree to our Privacy and Cookies Policy and Terms of Use.

Questions and responses on are not provided, paid for or otherwise endorsed by any bank or brand. These banks and brands are not responsible for ensuring that comments are answered or accurate.
Go to site