Unsecured Business Loans up to $500,000
Are you searching for an unsecured business loan to help strengthen and grow your business? Look no further! Small business loans without collateral are available online. Apply now for funding with no obligations, fees or impact on your credit score.
Unsecured business loans without collateral are one of the most common types of commercial financing. They’re made available to businesses with a good credit history that needs short-term funds for expansion, equipment purchases or hiring new employees. Continue reading to learn more about unsecured business loans.
What Are Unsecured Business Loans?
An unsecured business loan is a type of loan given to a business without the need to put up any collateral. This type of loan is usually given to small business owners with a good credit history that require funds for a short period of time. Unsecured business loans can be used for various purposes, such as expanding the business, buying new equipment, or hiring new employees.
Unsecured vs. Secured Business Loans
When it comes to business loans, there are two main types: unsecured and secured. An unsecured business loan is given to a business without the need for the business to put up any collateral. On the other hand, a secured business loan is a loan that is given to a business in exchange for the business putting up some form of collateral.
Both loan types can be used for the same purposes. However, secured loans are less risky for the lender because they can seize the collateral if the borrower fails to repay the loan.
Types of Unsecured Business Loans
Various unsecured business loan options are available today, each with unique benefits and drawbacks. Here are some of the most common types:
Merchant Cash Advances
A merchant cash advance is an unsecured funding solution that allows business owners to access a lump sum of cash in exchange for a percentage of their future sales. This type of funding is best suited for businesses with a high sales volume or revenue.
A significant advantage of this type of funding is that you receive large amounts of cash upfront, which gives you the freedom to take your business in any direction you choose without having to wait for additional funding. The drawback is that these sometimes come with higher interest rates than term loans.
Term Loans
Term loans are issued for a set period, typically one to five years. This might be an option if you want more flexibility in how long your repayment lasts, and you’re not worried about having a smaller pool of funds to work with.
The main benefit of a term loan is that the interest rate is typically lower than that associated with other types of unsecured loans. It may not be the best choice if your business is highly cyclical since the loan is repaid in fixed monthly payments.
Business Lines of Credit
A business line of credit is a type of financing option that allows business owners to borrow funds anytime you need, without providing collateral. A business line of credit works as a revolving line of credit, which means you can borrow up to an agreed limit at any time.
The main benefit of a business line of credit is that you only pay interest on the amount of money you borrow, which can be helpful if your expenses vary from month to month. However, the interest rate is usually a little higher than a term loan due to this added flexibility.
How Do Unsecured Business Loans Work?
If approved for an unsecured business loan, the funds will be transferred directly into your bank account. You can then use these funds to finance any aspect of your business venture.
The repayment terms on unsecured loans vary depending on the lender you work with, but most loans have a fixed repayment schedule — meaning the repayment amount is the same each month, except lines of credit. The term of your loan will vary depending on how much you’re approved for, with larger loans typically offering longer repayment periods.
How to Qualify for an Unsecured Business Loan (With the Best Rates)
To qualify for an unsecured business loan, you’ll need a good credit score and at least six months of business sales history. This is because the lender will be taking on more risk by lending to you without any form of security.
You can improve your chances of being approved for an unsecured loan by preparing well ahead of time. Know exactly how much you need and what type of loan best suits your business. Try to get your finances in order so that all the information required by your lender is readily available for review.
Some lenders will want to see a solid business plan to understand how you intend to use the funds. This means having concrete projections about how much revenue you will add by utilizing the loan.
Where to Get an Unsecured Business Loan
There are many financial institutions that offer unsecured business loans, but not all lenders offer the same terms and conditions. It’s essential to do your research before applying for a loan to ensure you get the best deal possible.
MCashAdvance is a reputable lender that offers unsecured funding solutions to qualified applicants with same day funding.
How to Apply for the Best Unsecured Funding Option
Eligibility Requirements
To be considered by MCashAdvance, you must meet the following requirements:
- A legal U.S. citizen or permanent resident
- Must be at least 18 years old
- Your business must have been in operation for at least six months
- Have a credit score of 500 or higher
Funding Limits
Funding amounts vary depending on your business’s health and financial situation, but you may be eligible to receive up to $500K.
Term Length
The length of time you have to repay the merchant cash advance will vary based on the amount of funding you receive and how much business you’re doing.
Pros and Cons of Unsecured Business Loans
Unsecured business loans are a great way to get your new venture off the ground. However, there are also some risks involved as well.
Pros of Unsecured Business Loans
- No collateral needed
- The approval process is fast and easy
- You can use the funds for other purposes
- They are ideal for small businesses with limited business assets
- The interest rates are usually lower than credit cards
Cons of Unsecured Business Loans
- The interest rates are typically higher than secured loans
- There may be a shorter repayment period available
- You need to have a 500+ FICO score to qualify
Alternatives to an Unsecured Business Loan
If you can’t qualify for an unsecured business loan, other options may still be available to you. Many alternative lenders offer secure funding that requires collateral or utilizing a co-borrower with good credit. These can often help those who don’t meet the criteria for regular unsecured loans on their own.
Invoice financing is another alternative to unsecured business loans. This type of business financing allows businesses to borrow against their outstanding invoices — providing a quick and easy way to improve cash flow.
No matter what route you decide to take, it’s essential to research and find the best option for your needs. An unsecured business loan can be a great way to get started, but make sure you know all the risks involved before signing on the dotted line.
Unsecured Business Loan Frequently Asked Questions
When you’re thinking of applying for an unsecured business loan, you likely have many questions. Below are some of the most common questions and answers:
Is a Small Business Loan Secured or Unsecured?
A small business loan can be either secured or unsecured. The type you may be able to get approved for will depend on many factors, including the lender, your ability to qualify, as well as your business and credit health.
Is Collateral Needed For An Unsecured Business Loan?
No, collateral is not needed for an unsecured business loan. However, you’ll need to have a good credit rating and solid financial standing to qualify.
Are There Unsecured Business Loans for Bad Credit?
Yes, there are unsecured business loans for bad credit. However, the interest rates will be higher due to the increased risk of lending to individuals who have a poor credit rating or no credit at all.
Do Banks Underwrite Unsecured Business Loans?
Banks may underwrite unsecured business loans, though some do not offer them. Many online lenders specialize in providing these loan types for businesses, though.
Are There Separate Unsecured Business Loans for Startups?
Because no business history exists, securing financing as a startup company can be difficult. You may still qualify for a merchant cash advance or business line of credit. The last alternative method of unsecured financing would be through the use of credit cards.
Funding Your Business Is Our Business
Unsecured Small Business Loans Can Grow Your Business
Getting an unsecured small business loan can provide the funds you need to grow your business. You can purchase new business equipment, hire additional employees, and expand into new markets. By taking advantage of the opportunities available to you, you can help your business reach its full potential.
Unsecured loans are ideal for small businesses with many business assets and strong credit history. They are also fast and easy to apply for, so you can get the funding solutions you need without any hassle. If you’re looking for a way to grow your business further, an unsecured loan may be the perfect option for you.
Don’t Allow a Lack of Funding
to Hold your Business Back
It’s Time To Move Your Business Forward!