A Beginner’s Guide to Unsecured Business Financing
If you’re like many small business owners or startups, you don’t have real estate, vehicles, or high-value equipment to use as collateral—and that’s okay.
The good news is: you can still get business funding without collateral.
Today’s funding landscape includes a variety of unsecured financing options that focus on your revenue, credit score, or business potential instead of requiring physical assets.
Let’s break down what collateral means, what your options are if you don’t have it, and how to increase your chances of getting approved.
What Is Collateral?
Collateral is something of value (like a building, vehicle, or equipment) that a lender can take if you don’t repay a loan. It lowers the lender’s risk and is common with banks and traditional loans.
If you’re applying for a secured loan, you’ll usually need to put something up as collateral. But for many small business owners—especially those just getting started—there’s nothing to offer yet.
That’s where unsecured funding comes in.
What Is Business Funding Without Collateral?
Unsecured funding is capital you can access without pledging business or personal assets. Instead of collateral, lenders evaluate:
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Your personal credit score
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Your business revenue or cash flow
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Time in business
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Use of funds and your repayment plan
This type of funding usually comes with shorter terms or higher rates—but can be much faster and easier to qualify for.
Best Options for Business Funding Without Collateral
Here are a few funding types that don’t require you to put up assets:
Credit Card Stacking
This is a popular choice for startups and low-asset businesses. It involves bundling multiple business credit cards (often with 0% intro rates) to access $20,000–$150,000+ in funding.
✔ Great for: launching, marketing, inventory, and working capital
✔ Based on: personal credit score (usually 650+)
Merchant Cash Advances (MCA)
You get a lump sum upfront and repay it through a percentage of your daily or weekly sales. No assets or business credit required.
✔ Great for: businesses with consistent card sales
✔ Based on: revenue, not collateral
Revenue-Based Loans
Lenders advance capital based on your monthly business income. If you’ve been earning consistently (usually $5K+/mo), this could be a fit.
✔ Great for: covering short-term needs
✔ Based on: bank statements, not assets
Microloans & Community-Based Programs
Some local or nonprofit lenders offer microloans under $50,000 without requiring collateral, especially for underserved or new business owners.
✔ Great for: startups or mission-driven businesses
✔ Based on: business plan, vision, and local impact
Tips to Improve Your Approval Odds
Even without collateral, you can strengthen your application with:
✅ A strong personal credit score (aim for 650+)
✅ A simple business plan that explains how you’ll use the funds
✅ 3–6 months of clean business bank statements
✅ Consistent revenue (if already in business)
✅ Clear documentation (licenses, EIN, vendor agreements, etc.)
Need help organizing your documents? Grab the checklist inside our free guide below.
Watch Out for These Red Flags
While unsecured funding is more accessible, not all offers are created equal. Be cautious of:
❌ Extremely high interest rates (especially daily payment loans)
❌ Upfront fees before funding
❌ Brokers who can’t explain terms clearly
Stick with reputable sources—and take time to compare your options.
✅ Take the First Step Toward Unsecured Funding
You don’t need assets to grow your business. With the right strategy, you can access business funding without collateral and move forward with confidence.
Download our Ultimate Business Funding Guide to explore your options, understand your funding readiness, and access tools to help you qualify.
Or Get Pre-qualified (below) and we’ll match you with lenders offering funding options that don’t require collateral.