Unsecured Business Loans

Unsecured Business Loans Offer Less Risk and More Financial Freedom

Unsecured business loans make an attractive option for small business owners who just need a quick infusion of cash to pay off outstanding expenses, cover financial gaps and move onto the next project. An unsecured business loan offers a flexible way for business owners to access financing without putting their personal or business assets at risk.

What are Unsecured Business Loans?

Unsecured business financing is not backed by collateral, making them fundamentally different than most traditional long-term business funding programs. The loan is not backed by assets of the company, meaning typically there are no liens placed on the business. This allows businesses to mitigate financial risk and provide peace of mind. This type of loan is typically offered by alternative lenders for short-term financing. Because unsecured loans provide greater risk to the lender, unsecured financing is usually offered with higher interest and on a shorter timeline. For business owners who do not want to put up their business as collateral, the pros often outweigh the cons for unsecured financing.

Unsecured Financing with a Personal Guarantee

Some unsecured business loans will not require borrowers to sign over the rights to any of their business assets. However, instead they may ask them to sign what’s known as a Personal Guarantee. A Personal Guarantee simply allows a lender to acquire a borrower’s personal assets in the rare case that they are unable to make payments. This may include their home or savings account. For example, if you are operating a long haul trucking business and get an unsecured business loan, there will be no liens placed on your fleet of trucks. However, with a Personal Guarantee in place, your personal assets are still at risk.

No Business Collateral Strings Attached

The main advantage of unsecured business financing from a small business owner’s perspective, is the lack of collateral required to receive the loan. In most cases, if a business owner is unable to repay an unsecured loan, the lender is not allowed to seize their business assets. This provides an extra layer of protection for small business borrowers. Additionally, since extra time and paperwork involved in securing collateral is not needed, unsecured lenders are able to extend financing much faster. Business owners typically use unsecured business loans when they need working capital fast and are unable to offer up any form of collateral. Newer businesses without established assets also find an unsecured business loan easier to get approved for.

How to Use Unsecured Business Financing

Your unsecured business loan can be used for almost any business expense, including:

• Capitalize on opportunities: Take advantage of inventory sales, real estate deals, or new contracts with a short-term business loan.
• Invest in your business: Hire additional staff, purchase critical equipment, or update your office space to keep your business running smoothly.
• Maintain business operations: Whether you’re in a seasonal slump, just starting out, or have an unexpected circumstance, an unsecured business loan can keep your finances in the black.

Ready to learn more about an unsecured business loan with QuickBridge?

At QuickBridge, every single financing solution is customized to our customer’s unique business needs. Fill out our quick online application and a member of our team will contact you to discuss your options. Here, you’ll learn about on secured versus unsecured financing options and what that means for your business.