No-Collateral Business Loans

  • No collateral requirements
  • Low interest rates starting at 7%
  • Flexible financing to fit your needs
  • Funding in 24-48 hours
  • Loan amounts up to $750,000
  • 6 to 24-month term length
How much do you need?
5-star rating
Businesses love us on TrustPilot
Quick Financing
Competitive, collateral-free business loan
Lending concierge
Speak to us: 877-838-3919

Financing with no risk to your personal assets

Why Get a Business Loan without Collateral

Business loans can be very helpful in running and growing a company. Many businesses turn to various types of financing when they need cash to fund expansions or keep afloat during low sales seasons.

However, most loans require collateral like real estate, personal assets, or business property. And for business owners with little to no business assets that they can use to secure a loan, this could pose a problem.

Fortunately, there are business loans that don’t require collateral. In this article, we discuss your options for no-collateral business loans.

Best No-Collateral Small Business Loan Options

Here are a few options to consider if you’re looking for unsecured business loans.

SBA Loan

The Small Business Administration offers funding to small business owners through their various loan programs, such as SBA 7(a). The agency doesn’t fund the money — instead, you borrow from an SBA-approved lender.

Most SBA loans are secured. But if you’re borrowing $25,000 or less, you may not need to put up collateral. With SBA loans, you get lower interest rates and favorable loan terms. It’s a great option if you require minimal funding and have time on your side because SBA-guaranteed loans can take weeks to process. The eligibility requirements are also more strict than other loan options.

Merchant Cash Advance

A merchant cash advance (MCA) is a type of financing where a lender gives you a lump sum amount upfront in exchange for a percentage of your future sales. So, it’s not technically a loan, but an advance based on your sales receipts. You repay the cash advance plus fees as daily or weekly deductions from your credit card sales.

A merchant cash advance offers an alternative financing option to small business owners. The application process is quick, and funding is immediate. MCAs are unsecured business financing, which means you don’t need to provide collateral to secure your funding. It also has flexible requirements, making it accessible to business owners with poor credit history. Find out how Clarify Capital can help you get approved for a merchant cash advance.

Business Line of Credit

A business line of credit (LOC) is a type of loan that provides a borrower with revolving credit. A line of credit works like a business credit card or a home equity line of credit. You get access to an account with a specified credit limit and only pay interest on the amount you borrow. Then, the borrower can repay and withdraw from the line of credit as many times as they need.

Banks and online lenders offer both secured and unsecured business credit lines. To qualify for a secured line of credit, lenders ask for a personal or business property for collateral. With unsecured lines of credit, you don’t need to put up collateral. But most lenders will ask for a personal guarantee or a general lien.

The biggest advantage of a line of credit is the security and flexibility it offers. Many small business owners choose to open credit lines before they need them, so they have access to cash when they do. Since you only pay interest for the amount you withdraw, lines of credit provide quick access to funds without the burden of carrying debt. Get funded for a business line of credit today with Clarify.

Equipment Financing

Equipment financing is a type of financing that provides funding to businesses that want to purchase machinery or vehicles. Pieces of equipment needed for production and day-to-day business operations are typically high-ticket items. And many startups and new businesses can’t afford to buy them without financing.

With equipment financing, the amount you qualify for depends on the purchase price of the machinery you’re looking to buy. The repayment term also depends on its expected life. The equipment serves as collateral for the loan.

An equipment loan can be an excellent option if you’re looking to buy machinery for your business. You can take out equipment financing for a wide array of purchases, such as medical equipment, farm vehicles, or computers. Apply for equipment financing today!

Invoice Factoring

Invoice factoring is a type of invoice financing that allows you to borrow money by using your accounts receivables as collateral. The factoring company will pay up to 99% of your total invoice value upfront. Then, the lender will collect payments directly from your customers. Any remaining amount is also paid to you (minus fees) once the invoice clears.

In essence, you’re selling your unpaid invoices in an invoice factoring agreement. It’s a great option if you’re looking for funding but don’t want to put up any business assets for collateral. Speak to a Clarify advisor to find out if you qualify for invoice factoring.

Short-Term Business Loans

A short-term loan, as the name implies, is a type of business funding with a short repayment period. In a term loan contract, you receive a lump sum amount from a lender. And you pay the loan back plus interest with regular monthly payments. Lenders typically offer terms ranging from six months to 24 months.

Short-term loans don’t have any collateral requirements. That’s why they’re a popular choice for companies looking for convenient access to financing. Term loans offer flexible financing options for companies looking to expand, cover working capital, or manage their cash flow. Check out Clarify’s short-term loan requirements if you’re looking for a quick and easy financing option.

Can You Get a Small Business Loan Without Collateral?

Yes, you can get a small business loan without collateral. Various online lenders, the Small Business Administration (SBA), and traditional banks offer unsecured loans. These loans don’t require borrowers to pledge any type of asset. Instead, you get approved based on your creditworthiness.

To qualify for unsecured small business loans, loan providers consider your personal credit score, time in business, and annual revenue. Since these types of financing are riskier than secured loans, lenders may charge higher fees, higher interest rates, and shorter repayment terms.

And for some lenders, you may only borrow smaller loan amounts. But don’t worry, your options aren’t as limited as it sounds. Find out more about the different types of unsecured loans you can apply for in the sections below.

How Hard Is It to Get a Small Business Loan Without Collateral?

Many financial institutions and alternative lenders offer loans without collateral, so you don’t have to look far. However, some unsecured loans can be difficult to qualify for. Also, the loan terms and requirements can be very different from other types of business financing.

That’s why you should understand the loan terms, your payment schedule, and other conditions before signing the loan agreement.

Make sure you know your total cost of borrowing and how long it will take you to pay it off. Unsecured loans may also come with more fees, such as origination fees or prepayment penalties, so get clear on that as well. Check the fees you’re being charged with.

In addition, just because you’re getting an unsecured business loan doesn’t mean you’re free from personal responsibility. To protect themselves from borrowers defaulting on loans, lenders typically ask for the following conditions:

  • Personal guarantee: When you sign a personal guarantee, you agree that you’ll repay the debt from your own pocket if your business can’t do so. It also means the lender has the right to seek legal action against you personally to collect any unpaid amount.

  • UCC lien: A lien is a legal right against assets used as collateral to secure a debt. A creditor or a legal judgment can establish a lien. If the obligation isn’t fulfilled, the creditor can seize the asset under the lien.

    A Uniform Commercial Code (UCC) lien acts as a blanket lien that allows a lender to attach any or all of your business assets to the loan in case you fail to pay. So, if your company can’t pay, this lien allows the creditor to seize your assets to repay the debt. Essentially, it gives lenders an option to attach assets to a loan, even if you didn’t put any collateral to secure it initially.

Top Uses for Collateral Free Loans

As a business owner, managing your cash flow is one of your biggest challenges. You have to make sure you have enough capital to cover the expenses of your day-to-day operations while looking for opportunities to grow your company. That’s where collateral-free loans come in.

Below are examples of how you can use these loans to run and grow your business.

Profitable Opportunities

Growing your company means often needing more cash to hire workers, develop new products, or purchase necessary equipment. It also means jumping in when opportunities present themselves. During these times, you can invest more into your business through loans like equipment financing or short-term loans.

Pandemic Assistance

The pandemic has affected all sorts of businesses. Many companies have had to downsize, while many others might be struggling to stay afloat. If you require additional capital, funding from collateral-free loans can help get your business back up and running.

Cash Flow Gaps

Most businesses experience cash flow gaps. Customers pay late, shipment of materials gets delayed, or emergencies happen. During these times, you can cover both unexpected expenses and recurring costs through working capital loans.

Marketing and Advertising Spend

To build a profitable company, customers need to know you exist. Marketing and advertising can have a big impact on meeting buyers where they are and, ultimately, your sales. So, whether you’re looking for funding to start a marketing department or increase your advertising budget, Clarify Capital is here to help you get a working capital loan.

Upgrading Equipment

Purchasing machinery for your business can be a cash flow drain because these pieces can be expensive. That’s why many business owners choose to take out equipment loans. Financing makes investing in necessary equipment affordable for companies that need to upgrade their machinery.

Purchasing Inventory and Materials

When you use working capital loans, you can buy the materials you need in bulk. This way, you have the inventory when you need them. You can also take advantage of supplier discounts, which can help you save money.


Tax liabilities can be a burden to businesses. A business loan can help provide the cash if you’d rather pay your tax burden completely instead of enrolling in a payment plan with the Internal Revenue Service (IRS). That way, your taxes are cleared and won’t pile up.

Paying Wages and Salaries

Having the right people is an important aspect of running a successful business. Wages and salaries are also one of the largest expenses a business owner has. Business loans can help you keep your current team members on the payroll. Or you can use the funding to hire more workers during peak seasons.

How to Qualify for No-Collateral Business Loans

Many financial institutions and alternative lenders offer loans without collateral. And each lender has its own list of qualification requirements for borrowers. However, you’d have more options if you work with alternative lenders because they have less strict standards.

Here are the general requirements for collateral-free financing.

Bank Statement

To make the process easier and faster, make sure you have most of the requirements ready. Lenders typically ask for your most recent bank statements – aim to have at least the last three months ready for review.

When you work with Clarify, there are minimal paperwork requirements. And you have access to more than 75 lenders so you can choose the best loan terms for your needs.

Average Monthly Revenue

Most lenders require that you generate at least $10,000 a month to qualify for no-collateral loans. This assures lenders that you have enough money coming in to pay back your loan. They also use your monthly revenue to calculate the maximum loan amount you can qualify for.

Credit Profile

When it comes to collateral-free loans, the credit score requirement depends on the type of financing you’re applying for. At Clarify, we recommend a credit score of 550 or higher for short-term loans and business credit lines. On the other hand, merchant cash advances, invoice factoring, and equipment loans have lower credit score requirements.

But keep in mind that a higher credit score can get you a better interest rate and repayment terms. So, monitor your credit profile and pay your debts on time.

Length of Time in Business

Companies that have been in business longer are considered more stable. That’s why loan providers want to know your time in business, they use it to assess how risky it is to lend to you. To qualify for a loan with Clarify, your company must have been in business for at least six months.

Debt Load

To ensure that you can repay your loan, lenders may also want to know how much debt you’re already carrying. They use debt-to-income (DTI) ratios to determine how much you can reasonably afford to borrow.

The debt-to-income ratio compares how much you owe each month to how much you earn. It shows the percentage of your monthly income that goes towards your business expenses and paying off debts.


At times, lenders would also ask for proof of your company’s profitability. Other times, they’d want to know how you intend to spend the capital you’re getting from the loan.

You may show recent financial statements such as Profit and Loss statements, balance sheets, and Cash flow statements. You can also provide a detailed business plan or forecast statement that shows positive cash flow and income to convince lenders to lend to you.

Speak With Clarify Capital to Discover the Best Small Business Loan Options for You

Applying for a no-collateral loan doesn’t have to be difficult. As an entrepreneur, you need convenient solutions for unsecured loans so you can start receiving funding for your company.

When you work with Clarify, a dedicated advisor will work with you to choose the best loan option based on your business needs. We also have a marketplace of more than 75 lenders so you can get the best rate.

Speak to a Clarify advisor today and get the funding you need.

What Are Business Loans without Collateral?

Business loans without collateral are a form of unsecured financing. When you finance with an unsecured loan, there’s no need to pledge your personal property. Qualifying for a business loan without collateral does not involve a “security”. Instead, Lenders look at other eligibility factors to determine if you qualify for financing. If you stop paying your loan, your lender has no rights to your assets.

Collateral-free loans work very differently than their counterparts, secured loans. Unlike business loans without collateral, when you take out a secured loan, you’re required to provide a guarantee. This gives lenders the contractual right to repossess any physical property you put up as collateral - like your home or vehicle - if you become unable to make payments on your loan.

For business owners, collateral-free loans offer an extra layer of protection. When you take out an unsecured business loan, you’re reducing your risk exposure. You get an infusion of working capital, without jeopardizing ownership of your personal assets.

How Do Business Loans without Collateral Work?

Business loans without collateral work similar to most other business financing products. As we discussed above, the key distinguishing factor is that they do not require borrowers to put up collateral in order to receive funds.

Since the loans are not backed by anything, the lender takes on more risk than they do with secured loans. If you stop repaying owed funds, the lender has fewer options to recover the money. As a result, certain types of collateral-free loans require applicants to have higher credit scores. Having stricter qualification criteria, like credit requirements, gives lenders extra assurance that borrowers are likely to pay back their loan responsibly.

That being said, there are a variety of collateral-free loan options available, many of which have lower credit score requirements. Collateral-free loans with low credit requirements, also known as bad credit loans, offer the same asset protection as all other unsecured financing types.

A business cash advance, or invoice factoring, for example, are funding options that are a good fit for all types of credit. They typically have high approval rates.

What Are the Advantages of Financing without a Personal Guarantee?

One of the largest benefits to collateral-free funding is that your assets stay protected. Unsecured loans provide business owners with the same working capital that secured loans do, but with significantly less risk.

This advantage is often appreciated in the event of an unexpected financial hardship. If something happens and you suddenly become unable to repay funds, you’re in a much less vulnerable position. You don’t need to worry about a collection agency seizing and selling off your personal belongings to recover losses.

Frequently Asked Questions

Yes. Financing options without collateral are available for borrowers with less-than-stellar credit scores. That being said, most lenders like to see a credit score of 550 and above for unsecured loans.
Interest rates vary depending on your monthly revenue and credit score. Clarify's loan APRs are as low as 7%.
No. Collateral-free loans do not require you to make any cash deposits.
At Clarify, we offer financing up to $750,000. To determine how much capital you’re eligible to borrow, lenders will look at your operational revenue, amongst other factors.

Types of businesses that qualify for collateral-free financing

Approval requirements

  • keyboard_arrow_right In business for more than 6 months
  • keyboard_arrow_right At least $10,000 per month in gross revenue
  • keyboard_arrow_right Last 3 months of bank statements required for verification

Lending advisors committed to getting you funded today

When you choose Clarify, we consider you family -- and work with you through the ups and downs of running your small business.Manufacturing Financing Team

keyboard_arrow_right See why companies love Clarify

Merchant Cash Advance

"I get solicited by lending companies every day, but when I spoke to Clarify Capital, I worked with the owners directly. While many companies mislead you with false hope, Bryan came through on every promise. I was approved in 24 hours, funding in 48 hours and received much better rates & terms than I previously had with another lender"

Restaurant Owner
5-star Trustpilot reviews5-star Trustpilot ratingClarify Capital is rated 10/10 based on 252 reviews on Trustpilot
Ready To Grow Your Business?

Get approved for an uncollateralized loan today and have money in your account within as little as 24 hours. No obligation -- prequalify without affecting your credit!