Unsecured Business Loans
QUICK FACTS AND REQUIREMENTS
$10,000 – $500,000
- 2 Years in business
- Full financials ( 2 years business tax returns, P&L / Balance sheet)
- 630+ FICO
- Min. $200k annual sales
- No adult or vice industry businesses
Benefits & Drawbacks
Unsecured Business Loans
Unsecured business loans help small businesses get the capital they need to grow and succeed. An unsecured business loan is often a better solution than a secured loan, because the lender cannot seize your personal assets if there is ever a problem with repayment.
What is an Unsecured Loan?
The definition of an unsecured loan is a loan given only on the strength of a borrower’s credit and business’s debt service ability, it is not secured up by any specific collateral like Real Estate assets.
An unsecured business loan is a low risk and convenient way to get capital for a small business. A company should have a strong credit history to qualify for unsecured business funding.
The loan amounts vary from $10,000 to $500,000, and the interest rates start at 5.99%. It typically takes a week or two to receive an unsecured loan, and the loan repayment term is from 1 to 15 years.
Do I Need Collateral for Unsecured Small Business Loans?
One of the best things about an unsecured loan is that it does not require collateral. Unsecured loans do require a personal guarantee, and they are typically awarded to those with above average or good credit.
This type of loan can also help a young business build credit, which is why many pursue an unsecured business line of credit for a startup.
Because there is no collateral required, business owners who want an unsecured business loan should be prepared to supply business and personal tax returns, this helps the lender determine whether or not their loan is in good hands.
How Can I Use Unsecured Business Loans?
This is one of the areas that make unsecured loans preferable to secured loans. Secured loans can be restrictive when it comes to how the business can spend its money. Unsecured loans offer more flexibility, and do not limit a business’ spending to a certain purpose.
This gives business owners the freedom to spend on what really matters the most.
A smaller company can keep the power to make its own decisions. The only real restrictions are that an unsecured line of credit should not be used for gambling, purchasing securities, or participating in anything illegal.
Small businesses often use unsecured loans to take care of their payroll when they are experiencing a slow month or season or more mature businesses may need a loan to renovate their store or expand to a new area.
Can I Get an Unsecured Loan With Bad Credit?
It is difficult to get an unsecured loan with bad credit because there is no collateral, and the loan is awarded only on the strength of the borrower’s credit history and business debt service ability.
Even so, some loan companies are more willing to work toward credit forgiveness. Contact us to find out more about our minimum requirements.
Do I Qualify for an Unsecured Loan for My Business?
The most important way to qualify for an unsecured loan is to have a great credit score. A history of on-time payments and strong credit profile demonstrate financial responsibility, and will help you receive a better loan.
Most businesses that qualify for unsecured loans have been active for two or more years, and have a FICO credit score of 630 or more. This above average credit rating should be supported by financial documents such as the following:
- Business and personal tax returns
- An aging accounts receivable report
- Any other financials requested by the lender
If a business has ever filed for bankruptcy, it can still qualify. All bankruptcies must be completely satisfied and discharged for a minimum of two years, and all tax liens must be on active payment plans.
How Much Do Unsecured Business Loans Cost?
The rate for a loan depends on a business’ financial stability as determined by the lender. The lender will consider a business’ credit profile to establish a level of confidence in the borrower’s ability to repay debts on time.
A small business with a good credit score (630+ FICO) and strong profit margins will likely qualify for low rates. These rates may be higher if a business does not have a good credit score or high profits, because the additional cost adds a level of security for the lender.
Best Unsecured Business Loans for Small Business
The best unsecured business loans come from trustworthy companies. AMP Advance is committed to the mission of empowering small businesses with financial solutions.
We are based out of Miami, Florida and offer solutions to businesses all throughout the United States.
Our dedication to providing fair lending has made us a leading source for direct funding. Contact our experts if you have any questions about unsecured loans, or start your application today. Apply to see if your small business can qualify.