Understanding Unsecured Business Funding and How It Works

Key Highlights

• No Collateral Needed: Unsecured business funding doesn’t require assets to be pledged—great for lean startups.

• Fast Approvals: Many unsecured business funding options fund within 24–48 hours—perfect when time is money.

• Online and Easy: Most unsecured business funding can be applied for online with just your bank statements and a credit check.

• Higher Credit Requirements: Strong credit scores and financials boost your approval odds.

• Credit Risk: Defaults can affect your business credit score and personal credit if a personal guarantee is involved.

What Is Unsecured Business Funding?

Unsecured business funding allows you to borrow capital without using physical assets—like property, equipment, or vehicles—as collateral. These loans rely on your business credit score, revenue, and financial history, and often require a personal guarantee instead of collateral.

This type of alternative lending is ideal for:

• Startups without assets

• Ecommerce businesses

• Service-based companies

• Business owners seeking working capital without risking property

Pro Tip 💡 Fintech lenders offer some of the most flexible unsecured business funding terms with lower documentation requirements and fast decisions. If you’re curious about how much you could qualify for, try our Merchant Cash Advance Calculator to estimate potential funding and payback.

Is a Small Business Loan Secured or Unsecured?

Small business loans can be either:

• Secured Loans require collateral. These are lower risk for the lender and often come with lower interest rates.

• Unsecured Loans do not require collateral and are based on creditworthiness and cash flow. Interest rates are higher due to the added lender risk.

Want to compare unsecured business funding types based on your business goals? Explore our Business Funding Solutions to see all available options.

Do I Need a Personal Guarantee for Unsecured Business Funding?

Yes, in most cases. Since there’s no collateral involved, lenders often require a personal guarantee (PG). This means if your business defaults, they can pursue your personal assets to recoup losses.

According to Investopedia, most unsecured business funding relies on either strong financials or personal guarantees to offset the lack of collateral.

Pro Tip 💡 Always read the fine print. If you’re signing a PG, ensure you understand the liability—it may follow you even if your business closes.

Where Can I Get Unsecured Business Funding?

You have several options:

• National Banks like Chase or Bank of America: Reliable, but strict underwriting.

• Credit Unions such as Navy Federal: Personalized service and lower rates, but limited tech.

• Online with AMP Advance Unsecured Busines Loans: Fast approvals, flexible underwriting, no hard credit pull, and the ability to stack unsecured business funding products.

Benefits of Unsecured Business Funding

• No collateral to risk

• Faster funding and easier qualification

• Flexibility to use funds for almost any business purpose

But remember—higher risk for lenders means you’ll typically pay higher interest.

Pro Tip 💡 Use unsecured business funding for quick-turn opportunities like marketing campaigns, bulk inventory, or short-term working capital—not long-term investments.

Best Unsecured Business Funding Options

Here’s a breakdown of popular options you can explore:

1. 📈 Revenue-Based Financing

This model advances you funds based on your sales. Repayment is made via a percentage of daily or weekly revenue. Great for businesses with strong monthly income.

🔗 Learn more: Merchant Cash Advance

💳 Credit Card Stacking

Access multiple business credit cards with 0% APR promos and combine limits to fund your venture. This strategy works best for those with excellent credit.

According to NerdWallet, the best business credit cards offer long introductory APRs, cash-back rewards, and strong credit-building benefits.

🔗 Learn more: Credit Card Stacking

🏦 Unsecured Term Loans

Borrow a lump sum with fixed payments over time. Easier to manage and predictable, but requires good credit and business stability. A common unsecured business funding option.

Startup Personal Loans

New businesses with little-to-no business credit may qualify using the owner’s personal income and credit score.

🔗 Learn more: Startup Business Loans

Unsecured Business Line of Credit

Tap into funds as needed—pay only on what you use. It’s revolving, reusable capital without requiring collateral.

🔗 Learn more: Business Line of Credit

What Happens If You Default on Unsecured Business Funding?

If you miss payments or default:

• Your business credit score and personal credit may suffer

• You could face collection efforts or lawsuits

• PGs may put personal assets at risk

• Worst-case? Bankruptcy

According to the SBA, failure to repay a business loan—even if unsecured—can result in legal action and limit future access to federal or private capital.

Pro Tip 💡 Before you borrow, map out your monthly repayments in advance. Use tools like our or SBA Loan Calculator to plan realistically.

How to Get Unsecured Business Funding: 4 Simple Steps

Step 1: Know What You Need

Be clear about your loan purpose and how much you need. Apply before cash flow becomes a problem.

Step 2: Apply Online

Use AMP Advance’s online application to pre-qualify without hurting your credit.

Step 3: Prepare Your Docs

Lenders typically request:

• 3–6 months of bank statements

• Valid ID

• Voided check or business license

Step 4: Choose the Best Offer

Compare rates, terms, and repayment structures. Choose what aligns with your growth goals and budget.

Pro Tip 💡 If you get approved for one product, ask if it can be stacked with another—like a business line of credit plus a revenue advance.