Unsecured Business Loans
With an unsecured business loan, no collateral is required to secure the financing that your business receives. Unsecured business loan products are inherently more risky for the lender since there are no assets to back up the loan should the business default on its payments. Most banks and other commercial lenders will therefore pay close attention to your credit rating and financial history when deciding whether or not to approve your loan application.
To see if an unsecured business loan would be appropriate for your business, here are some pros and cons:
No need to risk loosing collateral if payments cannot be met
A good financing option for small businesses and start-ups that have few assets
Needs a good credit score
Only available in small amounts- usually not more than $100,000
Approval is dependent on past revenues and projected annual cash flow
Some of the content in this section has been provided by First American.