8 Ways to Obtain a Business Loan Without Collateral

Starting or growing a business may require you to obtain a business loan without collateral. Finding a business loan without collateral is not easy. So, to start or grow your business, there are two types of loans available for you: secured and unsecured. However, a secured loan requires you to pledge an asset or assets as security. An unsecured loan is a no-collateral loan that requires pledging of no asset as a security.

How to get a business loan without collateral

Here are various business loans without collateral that you can obtain:

Personal guarantee

This is an unsecured loan in which the business owner pledges a personal guarantee to get a business loan instead of a particular asset as a security. However, it involves you as a person to guarantee the payment of the loan from your asset in case the business failed to repay the loan.

Blanket UCC lien

This is an unsecured loan that involves placing a blanket UCC lien on certain assets of the company. It doesn’t require pledging a particular asset as collateral. But, if the business failed to repay the loan, the lenders can lien or purse assets of the company as compensation for the remaining unpaid amount.

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Business credit card

A business credit card allows business owners to have access to a certain amount of money as a loan without collateral. It is a line of credit that is attached to a credit card. This credit card works similarly to a personal credit card. However, there are different types of business credit cards with different benefits and fees. You just need to select the one that suits your business goal.

Line of credit

This is an unsecured loan that allows business owners to borrow a certain amount of money when there is a need for short-term finance to bridge cash gaps. It allows you to pay interest on the actual amount spent out of the loan. It can be used when you are facing a shortage of funds to acquire equipment and others.

Merchant cash advances

This is another unsecured loan of obtaining an advance on future credit card sales or debit card sales. However, a merchant cash advance is very expensive because it involves a high rate of interest. This unsecured loan doesn’t require a personal guarantee.

Peer-to-peer financing

Peer-to-peer financing is a means of obtaining loans directly from other investors like online platforms without any collateral. It serves as an alternative to the bank or other lenders. So, you need excellent credit history to access P2P financing. It involves a high-interest rate with a short repayment period. This unsecured loan is processed online.


Crowdfunding allows to you obtain funds from a large number of people through online platforms like Kiva without any collateral. This can be done through a reward-based crowdfunding campaign. However, a reward-based crowdfunding campaign gives the investors the right to receive certain rewards for their capital. Therefore, crowdfunding requires an excellent business or project plan and strategy to convince people to help your business.


This is also known as accounts receivable financing. It is available for companies that have unpaid invoices. It involves obtaining the value for the unpaid involves at a discount and payback when customers settled the invoices.

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Before you start looking for a business loan without collateral, make sure that you have a successful and comprehensive business plan, and improve your credit history. Then you can search for institutions or platforms that provide an unsecured loan that matches your business purpose and apply for it. With BadCreditLoan, you can get up to $5,000 without any collateral in just three steps. To check if you qualify for either business or personal loan with BadCreditLoan, click here

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