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.

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The 7 best unsecured business loans of 2020

The best unsecured business loans at a glance

Lender APR Loan Amount Terms Eligibility
Lending Club 4.99% – 29.99% $5,000–$500,000 6 months–5 years In business for 1 year, over $50,000 in annual sales
Smart Biz 4.75% – 7% $30,000–$5,000,000 10–25 years In business over 2 years, U.S. citizen or legal resident, personal credit of at least 650
Street Shares 8% – 39.99% $2,000–$250,000 3–36 months In business for at least 1 year, preference for veterans
National Funding 5% – 8% $5,000–$500,000 2–5 years Small business
Funding Circle as low as 4.99% $25,000–$500,000 Up to 10 years Small business, in business for 2 years, personal credit of at least 660
American Express 6.98% – 19.97% $3,500–$75,000 6–36 months Must be a cardholder
BlueVine Starting at 4.8% $5,000–$250,000 6 or 12 months Only for B2B businesses

Best marketplace lender

Lending Club

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

Interest rate
4.99%–29.99%
Terms
6 months–5 years
Loan Size
$5K–$500K
SimpleScore
2.4 / 5.0
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SimpleScore
Lending Club
2.4
  • Rates
    3
  • Loan Size
    4
  • Product Variety
    1
  • Resources
    1
  • Fees
    3
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.
Full review

Our Two Cents — 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.

Best SBA loans

SmartBiz

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

Interest rate
4.75%–7%
Terms
10–25 years
Loan Size
$30K–$5M
SimpleScore
4 / 5.0
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SimpleScore
SmartBiz
4
  • Rates
    5
  • Loan Size
    5
  • Product Variety
    3
  • Resources
    5
  • Fees
    2
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%.
Full review

Our Two Cents — 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.

Best for veteran-owned small businesses

Street Shares

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

APR
8%–39.99%
Terms
3–36 months
Loan Size
$2K–$250K
SimpleScore
3.8 / 5.0
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SimpleScore
Street Shares
3.8
  • Rates
    3
  • Loan Size
    3
  • Product Variety
    5
  • Resources
    5
  • Fees
    3
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.
Full review

Our Two Cents — 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.

Best for quick application process

National Funding

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

APR
5%–8%
Terms
2–5 years
Loan Size
$5K–$500K
SimpleScore
4.2 / 5.0
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SimpleScore
National Funding
4.2
  • Rates
    2
  • Loan Size
    4
  • Product Variety
    4
  • Resources
    5
  • Fees
    3
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.
Full review

Our Two Cents — 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.

Best for small businesses

Funding Circle

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

APR
as low as 4.99%
Terms
Up to 10 years
Loan Size
$25K–$500K
SimpleScore
3.6 / 5.0
close
SimpleScore
Funding Circle
3.6
  • Rates
    5
  • Loan Size
    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.
Full review

Best for credit card customers

American Express

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

APR
6.98%–19.97%
Terms
6–36 months
Loan Size
$3,500–$75K
SimpleScore
3.4 / 5.0
close
SimpleScore
American Express
3.4
  • Rates
    4
  • Loan Size
    2
  • Product Variety
    2
  • Resources
    5
  • Fees
    4
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.
Full review

Our Two Cents — 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.

Best for invoice factoring

BlueVine

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

APR
Starting at 4.8%
Terms
6 or 12 months
Loan Size
$5K–$250K
SimpleScore
TBD / 5.0
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SimpleScore
BlueVine
TBD
  • Rates
    1
  • Loan Size
    3
  • Product Variety
    2
  • Resources
    5
  • Fees
    5
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.

Its 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.

Full review

Our Two Cents — 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.

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.

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.

Too long, didn’t read?

Getting an unsecured business loan is an important tool many business owners use to buy inventory, equipment and make long-term investments in the growth of their companies. It’s a good idea to start with your bank first, but if you can’t get approved for a bank loan, or if you need fast cash, there are a variety of other lenders offering flexible financial solutions and competitive rates.

Keep reading

Methodology

The SimpleScore is our proprietary scoring metric to compare products and services at The Simple Dollar in a transparent, evidence-based way. Our editorial team identifies five quantifiable aspects to compare for every brand, determines the rating criteria for each aspect score, then averages the five aspect scores to produce a single SimpleScore. For unsecured business loans, we compared interest rates, loan amounts, product variety, resources and fees for every major lender. Our ratings are meant to be a directional tool to help you in the process of choosing a business loan provider. Be sure to continue your research and shop around for the best business loan that fits your specific needs.

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.

Reviewed by

  • Courtney Mihocik is an editor at The Simple Dollar who specializes in insurance, personal finance, and loans. Previously, she wrote and edited for Interest.com, PersonalLoans.org, Ballantyne Magazine, Thread Magazine, The Post, ACRN, The New Political, Columbus Alive and the Institute for International Journalism.