Best Unsecured Business Loans for 2020

Unsecured business loans can be great resources to help your business grow. Whether you need help financing an upgrade or improvement or want to invest funds in scaling your business, business loans give you the funds and flexibility you need to succeed.

Bank and credit unions often offer the best rates and repayment terms when it comes to unsecured business loans. However, non-traditional lenders may also be a good option for those who have poor credit or don’t qualify for a loan from a traditional lender. When applying for loans, make sure to choose your research in order to end up with the best rates your qualify for.

Lending Partner
APR Range
Term
Loan Amount
  • Bluevine
    Bluevine
    APR Range
    15%–88%
    Term
    Varies
    Loan Amount
    Up to $250,000
    Check Rates
    on lender’s secure website
  • OnDeck
    Logo for OnDeck
    APR Range
    16.9%–99.4%
    Term
    3–36 months
    Loan Amount
    $5K–$50K
    Check Rates
    on lender’s secure website
  • Kabbage
    APR Range
    Varies
    Term
    6–18 months
    Loan Amount
    Up to $250K
    Check rates
    on lender’s secure website
In this article

    The 7 best unsecured business loans of 2020

    The best unsecured business loans at a glance

    LenderAPRLoan AmountTermsEligibility
    Lending Club 12.15%–29.97%$5,000–$500,0001 –5 yearsIn business for 1 year, over $50,000 in annual sales
    Smart Biz 7.99%–24.99%$30,000–$500,0002–5 yearsIn business over 2 years, U.S. citizen or legal resident, personal credit of at least 650
    Street Shares9% – 39.99%$2,000–$100,0003–36 monthsIn business for at least 1 year, preference for veterans
    National FundingUndisclosed$5,000–$500,000UndisclosedSmall business
    Funding Circle 4.99%–27.79%$5,000–$500,000Up to 10 yearsSmall business, in business for 2 years, personal credit of at least 660
    American Express6.98% – 19.97%$3,500–$75,0006–36 monthsMust be a cardholder
    BlueVine0.25%/weekUp to $5,000,0006 or 12 monthsOnly for B2B businesses

    Best marketplace lender – LendingClub

    Lack of product variety causes Lending Club to fall short of being the best lender, but its funding model and streamlined application make it a great lending option for businesses.

    APR Range
    12.15%–29.97%
    Loan Amount
    $5K–$500K
    Term
    1–5 years
    SimpleScore
    2.6 / 5.0
    close
    SimpleScore LendingClub 2.6
    Median APR 3
    Loan Size 4
    Product Variety 1
    Resources 2
    Fees 3

    Lending Club is a peer-to-peer lender with an accessible application and competitive rates.

    Lending Club is best known for its innovative status as a peer-to-peer lending platform. The lender offers unsecured business loans of up to $500,000, so they can help finance business projects both large and small. With rates starting at 4.99%, these loans are some of the most competitively priced in the industry. Eligible businesses should be at least one year old, and make over $50,000 per year. Lending Club does charge an origination fee of 3.49% – 7.99%, so it may not be the best fit for borrowers trying to steer clear of fees entirely. However, it still represents a great deal for borrowers who are able to qualify.

    Best SBA loans – SmartBiz

    Business owners who want to stay away from lengthy, complicated SBA loan application processes will find solace in SmartBiz’s streamlined, simple online application. Couple that with great customer support, and here’s a lender well worth considering.

    APR Range
    7.99%–24.99%
    Loan Amount
    $30K–$500K
    Term
    2–5 years
    SimpleScore
    3.4 / 5.0
    close
    SimpleScore SmartBiz 3.4
    Median APR 3
    Loan Amount 4
    Product Variety 3
    Resources 5
    Fees 2

    SmartBiz enables small businesses to secure loans through the SBA, which is often recognized as the gold standard when it comes to business loans.

    The main advantage of working with SmartBiz to secure a business loan is that they’re able to walk borrowers through the complicated process of applying for an SBA loan. Because SBA loans are so competitively priced, they’re difficult to secure and often require additional forms and paperwork. SmartBiz can walk business owners through every step of the process. Terms lengths for these loans range from 10 to 25 years, and borrowers can secure up to $5 million in funding. SmartBiz does charge an application fee of up to $3,000, and an SBA guarantee fee of 1.7% – 3.75%.

    Best for veteran-owned small businesses – StreetShares

    Average term lengths and loan amount land Street Shares with an average score. But its focus on veterans and small businesses, as well as competitive interest rates, give it an advantage.

    APR Range
    9%–40%
    Loan Amount
    $2K–$100K
    Term
    3 months–3 years
    SimpleScore
    4 / 5.0
    close
    SimpleScore StreetShares 4
    APR 4
    Max Credit Line Amount 5
    Draw Period 4
    Resources 5
    Fees 2

    Street Shares offers an easy application process and a special focus on helping veterans secure business loans.

    Like Lending Club, Street Shares is not a traditional lender but rather an innovative peer-to-peer lending organization. Borrowers can access loans of up to $250,000, with term lengths ranging from 3 to 36 months. Street Shares places a special emphasis on helping small business owners who are veterans to secure the funds they need to help their businesses succeed. The lender doesn’t charge a prepayment penalty, so borrowers can pay off their loan before the term length is up if they choose to.

    Note: Street Share is only offering Paycheck Protection Loans to businesses at the moment and is not originating term loans.

    Best for quick application process – National Funding

    Despite charging an origination fee, National Funding’s competitive interest rates and wide variety of products make it a good lender for any type of business.

    APR Range
    Undisclosed
    Loan Amount
    $5K–$500K
    Term
    Undisclosed
    SimpleScore
    4 / 5.0
    close
    SimpleScore National Funding 4
    Median APR N/A
    Loan Amount 4
    Product Variety 4
    Resources 5
    Fees 3

    National Funding offers competitively priced loans with a quick and easy application process that can have funds deposited in your account within a day.

    National Funding offers unsecured business loans of up to $500,000, making it a good fit no matter how big or small your business project is. Because the lender looks at more than just your credit score and business history, it can create a term loan customized to each business need. The application process is quick and easy, and if you’re approved for a loan you may be able to receive your funds within 24 hours. However, National Funding does charge an origination fee of 2%, so keep that in mind when comparing this lender.

    Best for small businesses – Funding Circle

    Funding Circle helps business owners by placing a special emphasis on helping small businesses access unsecured loans.

    APR Range
    4.99%–27.79%
    Loan Amount
    $5K–$500K
    Term
    3 months–10 years
    SimpleScore
    3.2 / 5.0
    close
    SimpleScore Funding Circle 3.2
    Median APR 3
    Loan Amount 4
    Product Variety 1
    Resources 5
    Fees 3

    Funding Circle is another peer-to-peer lender offering unsecured business loans. This lender focuses on lending to small businesses with loans of up to $500,000, 6% flat interest rate and up to 10 years of repayment terms. Funding Circle charges an origination fee of 3.49% to 6.99%, but many other lenders also charge this fee. With a Funding Circle SBA loan, businesses can upgrade their operations, consolidate business debt and pay for upfront costs like inventory and equipment. Its streamlined application.

    Best for credit card customers – American Express

    Low loan amounts limit American Express from a better score, but its two-in-one business financing shop provides competitive, convenient loans and credit cards to business owners.

    APR Range
    6.98%–19.97%
    Loan Amount
    $3,500–$75K
    Term
    6–36 months
    SimpleScore
    3.4 / 5.0
    close
    SimpleScore American Express 3.4
    Median APR 4
    Loan Amount 2
    Product Variety 2
    Resources 5
    Fees 4

    American Express is a good choice for an unsecured business loan if you already use it for its credit card offerings.

    American Express offers unsecured business loans to borrowers who are already card-carrying members. Loan amounts range from $3,500 to $75,000, with term lengths from six to 36 months. Members can apply to prequalify for a loan, which won’t affect their credit score even if they’re not approved. With rates starting going as high as 19.97%, it isn’t quite as competitive as some other lenders, but still a good option for price-conscious borrowers who appreciate the ease and convenience of working with a company they’re already familiar with.

    Best for invoice factoring – BlueVine

    With great product variety, many businesses can find a funding solution through Blue Vine. Whether you want upfront funding from invoices or a non-specified-purpose loan, you’ll likely find what you need with this lender.

    APR Range
    0.25%/week
    Loan Amount
    Up to $5 million
    Term
    N/A
    SimpleScore
    N/A / 5.0
    close
    SimpleScore BlueVine N/A
    Max APR N/A
    Loan Amount N/A
    Product Variety N/A
    Resources N/A
    Fees N/A

    BlueVine offers competitive business term loans, but its strength lies in invoice factoring loans.

    BlueVine is a lender that allows businesses to access capital through a process known as invoice factoring. If you have outstanding invoices that haven’t yet been paid, BlueVine allows borrowers to leverage those invoices in order to borrow funds up to $5 million. Businesses receive 85% to 90% of the outstanding invoice amount, then repay the invoice factoring loan starting at 0.25% per week for 6 or 12 months.

    It’s unsecured business term loans are also competitive, with rates starting at 4.8% and loan sizes up to $250,000. Funding is quick, but repayment is short — only up to 12 months to repay a loan. Keep that in mind when considering this lender.

    Note: BlueVine is only offering Paycheck Protection Loans to businesses at the moment and is not originating term loans.

     

    What is an unsecured business loan?

    An unsecured business loan is a loan that isn’t backed by collateral, such as a house, vehicle or financial accounts. When you take out a secured business loan, you run the risk of losing your collateral if you fail to make payments. Because unsecured business loans don’t have any collateral associated with them, you won’t lose the property if you’re unable to pay back the loan. This usually means that unsecured business loans come with higher interest rates since they pose a greater risk to lenders.

    [Read: How to Finance Your Startup]

    Why get an unsecured business loan?

    Unsecured business loans can help you to secure the funds you need to help your business grow. Whether you’re planning a move, want to invest in marketing and expansion, or just need a little financial boost to give your business the leverage it needs to succeed, unsecured business loans are a great option if you need a little extra cash for your business. Business loans can include both short-term and long-term loans.

    Check Your Business Loan Rates

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    How to qualify for an unsecured business loan

    In order to qualify for an unsecured business loan, you should:

    1. Research loan options: Find out what loans you might qualify for and which meet your specific needs.
    2. Gather your business information: Many lenders require information about your business, including how long you’ve been in operation and how much money you make in a year.
    3. See if you prequalify: Some lenders allow prospective borrowers to find out if they prequalify without harming their credit score.
    4. Apply for loans: Apply for the loans you think are the best fit, and try to secure the most competitive rates possible.

    We welcome your feedback on this article and would love to hear about your experience with the business loans we recommend. Contact us at inquiries@thesimpledollar.com with comments or questions.

    Methodology

    SimpleScore

    We’ve created the SimpleScore to help you objectively compare products and services here at The Simple Dollar.

    Our editorial team:

    • Identifies five factors to compare across each brand
    • Determines the rating criteria for each factor
    • Calculate an average of those five factor scores to get one SimpleScore™

    We break down each of these five factors and their rating criteria for our review of the best auto loan companies of 2020.

     

    Why do some brands have different SimpleScore on different pages?

    Some brands offer a variety of financial products, which is why they have different SimpleScores on different pages. We rate individual products that brands offer — not the brand as a whole. 

    For instance, in our American Express personal loans review we rated the company a 4.25 out of 5 based on rates, loan amount, customer satisfaction, customer support and fees. In our review of the best small business loan rates, American Express earned a 3.4 out of 5 SimpleScore based on its business loan product. By tailoring our SimpleScore to each financial solution, we’re able to give you a more accurate view of each brands’ services and how they compare to competitors’ products.

    Median APR

    Lenders with a lower median APR are awarded higher scores — because even if you’re APR is average, your business is not.

    Maximum loan size

    Lenders that dole out loans with high maximums are also rewarded with higher scores. It takes money to run a business, and businesses need access to as much capital as it takes.

    Product variety

    Need more than just a business loan? Lenders that offer more than one type of financial product for businesses score higher than others that don’t.

    Educational Resources

    We gave out higher scores to lenders that have the following subjects covered in their blogs: loans, marketing, employee and staff, and credit or finance resources.

    Fees

    Fees can add up fast and eat into operating costs –– that’s why we give a higher score to lenders that have fewer fees.

    Reviewed by

    • Andrea Perez
      Andrea Perez

      Andrea Perez is an editor at The Simple Dollar specializing in personal finance. Prior to that she specialized in digital marketing content for online learning websites. She holds a master’s degree in journalism and media studies from the University of South Florida.