Compare five types of small business loans with no collateral required

Compare five types of small business loans that don’t require collateral as security

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How to borrow money for your business without putting up your property as security.

Small business loans help entrepreneurs meet financial obligations. However, lenders often require that you put down property as security for repayments. Not every business owner is in a position to do so.

Fortunately, business owners can apply for loans without putting up their assets as security. Lenders evaluate the strength of your business and may approve an amount based on that assessment. Besides sound business structure, you also need to show bank statements and a reasonably good personal credit history.

OnDeck Small Business Loans

OnDeck Small Business Loans

Among the largest online business lenders offering term loans and lines of credit at competitive fixed rates.

  • Minimum Amount: $5,000
  • Maximum Amount: 500000
  • Loan Term: 3 to 36 months
  • Simple online application process with fast decisions
  • Dedicated loan specialists and loyalty benefits
  • Must have been in business for at least one year with annual revenue of $100,000+
  • Must have a personal credit score of 500+

    Which lenders offer small business loans with no collateral required?

    Some online lenders offer loans that don’t require property as security. Rates, fees and loan terms differ depending on the institution, so it’s a good idea to shop around for the best combination of these factors. Online lenders are generally more relaxed than banks with their lending criteria.

    Compare top online business loan lenders

    Rates last updated June 19th, 2018
    Name Product Product Description Min Loan Amount Max. Loan Amount Requirements
    LendingClub Business Loans
    With loan terms that vary from 1 to 5 years, enjoy fixed monthly payments and no prepayment penalties through this award-winning lender.
    $5,000
    $300,000
    2+ years in business; $50,000+ in yearly sales; No bankruptcies or tax liens; At least 20% ownership of your business; Fair or better personal credit
    OnDeck Small Business Loans
    A leading online business lender offering flexible financing at competitive fixed rates.
    $5,000
    $500,000
    Must have been in business for at least one year with annual revenue of $100K+. Must have a personal credit score of 500+.
    LoanBuilder, A PayPal Service Business Loans
    Customizable loans with no origination fee for business owners in a hurry.
    $5,000
    $500,000
    Annual business revenue of at least $42,000, at least 9 months in business, personal credit score of 550+.
    Kabbage Small Business Line of Credit
    A simple, convenient online application could securely get the funds you need to grow your business.
    $2,000
    $250,000
    Must have been in business for at least 1 year. Revenue minimum is $50,000 annually or $4,200 per month over the last 3 months.
    Lending Express Business Loan Marketplace
    Lending Express Business Loan Marketplace
    $5,000
    $500,000
    At least 3 months in business and $10,000+ in monthly revenue. Your business might also qualify it has at least 6 months in business and $2,000+ in monthly revenue.
    National Business Capital Business Loans
    Get a large business loan to cover your financing needs, no matter what the purpose is. Startups welcome with 680+ credit score.
    $10,000
    $5,000,000
    Your company must have been in business for at least 6 months and have an annual revenue of at least $180,000.
    Fora Financial Business Loans
    No minimum credit score requirement and early repayment discounts for qualifying borrowers.
    $5,000
    $500,000
    Business age 6+ months. Monthly revenue $12,000+. No open bankruptcies.
    Excel Capital Management Small Business Loans
    Get personalized financing options that suit your unique business needs in just a few simple steps.
    Varies by loan type
    Varies by loan type
    Your business must operate in the US, be at least 1 year old and have monthly revenue of $15,000+.
    Balboa Capital Small Business Loan
    Short-term business financing with no minimum credit score or physical paperwork required.
    $2,500
    $500,000
    Must make $100,000 in annual revenue and be established for at least one year prior.
    LendingTree Business Loans
    Compare multiple business financing options in one place including: small business loans, lines of credit, SBA loans, equipment financing and more.
    Varies by lender and type of financing
    Varies by lender and type of financing
    Varies by lender, but you many require good personal credit, a minimum business age and minimum annual revenue.

    Compare up to 4 providers

    What loan types are available with no collateral required?

    Lenders offer a few different types of business financing that doesn’t require security. Consider the following types to see which one might work best for your business:

    • Unsecured business loan

    With an unsecured business loan, the lender will consider the financial health of your business and whether or not you’re in a position to make repayments. The minimum and maximum amounts vary depending on the lender, but the loan amount you get depends on the lender’s assessment of your business.

    Repayment periods can range from one to seven years. The quicker you repay this loan, the more you save on interest and the better your credit profile. Lenders will more readily grant another loan to a responsible borrower.

    • Invoice financing

    Invoice financing lets you borrow against outstanding invoices and repay the loan once your clients honor those invoices. This is a quick, easy way to fix a business’s cash flow problems without putting up property as collateral.

    Depending on the lender, you may be able to have the money in your account within one business day of the application. This kind of funding can be an option for when you’re unable to fill an order because of a cash shortage.

    business-invoice-wide

    • Purchase order financing

    If you’re having trouble filling an order because of cash flow problems, you can apply for a loan where the lender pays your suppliers on your behalf. The supplier ships the order to your customer who pays the lender, and any profit from the transaction is deposited into your account.

    Instead of demanding property as security, purchase order financing is granted based on your business profile, the risk of the orders, your clients’ and suppliers’ reputations and experience in the industry.

    Besides providing financial breathing room, purchase order financing helps you take on bigger orders, increase turnover and streamline the supply chain. This boosts your business’s profile, thereby extending your customer base and eventually enhancing profits.

    • Trade finance

    Similar to purchase order financing, a trade finance loan pays your supplier on your behalf so that you can deliver an order to your customer. You then repay the lender within the agreed-upon period.

    Lenders work with foreign exchange partners to find the best interest rates, usually more competitive than those offered by traditional banks. Maximum loan amounts differ, with some lenders offering over $1 million depending on the order.

    Sometimes available as a revolving line of credit, trade finance helps small businesses fulfill their orders without putting up their own assets as collateral. This type of loan can be ideal for businesses with suppliers and overseas customers. The lender acts as a third-party financier to facilitate the business deal while you get on with fulfilling the order.

    • Equipment finance

    If you’re struggling with old or damaged equipment, you can apply for a loan to purchase business equipment. Instead of demanding assets as collateral, lenders may take into account the strength of your business and anticipated cash flow when considering your application.

    Depending on the lender, you can get different loan types to finance a rental lease, financial lease or actual purchase. You then enter into a tailored contract to repay the loan over the agreed-upon period. Some lenders may provide the option to purchase additional equipment during the loan and then adjust the repayment terms accordingly.

    Bottom line

    Acquiring a business loan doesn’t have to mean risking your property. Several online lenders grant funding based on the financial health of the business and projected income to get you the financing you need.

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