Can You Get a Small Business Loan Without Collateral?

By Laurel C. Yazzie | Last reviewed: June 2026

If you run a business but do not own property or equipment to put up as security, you may be wondering whether any lender will approve you. The answer is yes: you can get a small business loan without collateral, and many business owners do exactly that. The types of loans available, and how easy they are to qualify for, depend on your credit history, business revenue, and operating history.

Small Business Loan Without Collateral: Yes, you can get a small business loan without collateral. Unsecured business loans, SBA microloans, business lines of credit, and invoice financing are options that do not require physical assets as security. Lenders evaluate your credit score, revenue, and time in business instead.

Having worked directly with clients on loan applications for businesses at every stage, the most common mistake I saw was assuming that “no collateral” meant “no chance.” That is rarely true. The real question is which type of unsecured financing fits your situation right now.

What “No Collateral” Actually Means for a Business Loan

Collateral is a specific asset you pledge to a lender as security. If you stop making payments, the lender can seize that asset to recover what they are owed. Common examples include commercial real estate, vehicles, equipment, and inventory. When a loan is secured, the collateral reduces the lender’s risk, which often results in lower rates and higher borrowing limits.

An unsecured loan has no specific asset attached to it. Instead, lenders rely on other signals to assess repayment risk: your personal and business credit scores, your monthly cash flow, your operating history, and sometimes a personal guarantee. Before you apply anywhere, it helps to understand the difference between those terms.

• Secured loans: Backed by a specific pledged asset. Generally offer lower rates and higher borrowing limits because lender risk is lower.
• Unsecured loans: No asset pledged. Approval depends on creditworthiness, consistent revenue, and time in business.
• Partially secured loans: Some lenders file a blanket lien on all business assets broadly, rather than naming one specific piece of collateral.

Why Lenders Still Assess Risk Without Collateral

When a lender cannot fall back on a physical asset, they lean harder on your financial track record. A strong credit score, consistent monthly revenue, and at least six months to two years of operating history are the signals that carry the most weight in underwriting decisions.

Some lenders also file a blanket lien on your general business assets, even on loans marketed as “no collateral required.” A blanket lien gives the lender a legal claim on business property if you default, without naming a specific item upfront. Always ask whether a blanket lien or UCC-1 filing is part of the agreement before you sign.

Can You Get a Small Business Loan Without Collateral?

Yes, you can. Multiple loan products exist for borrowers who lack physical assets to pledge. The trade-off is usually a higher rate, a shorter repayment term, or a lower borrowing ceiling compared to secured options. According to the U.S. Small Business Administration, several SBA programs are designed for businesses that cannot meet traditional collateral requirements, including the SBA Microloan program specifically built to serve underserved borrowers.

The key is matching the right product to your business’s current profile. A two-year-old business with steady revenue has different options than one that launched six months ago.

• SBA Microloans: Up to $50,000, issued through nonprofit intermediaries, with more flexible collateral requirements than standard bank loans.
• Business lines of credit: Revolving credit you draw from as needed. Smaller credit limits are often unsecured.
• Unsecured term loans: A fixed amount repaid over a set term, based primarily on revenue and credit history.
• Invoice financing: You borrow against unpaid customer invoices. The invoices serve as the de facto security, so no outside collateral is needed.
• Merchant cash advances: A lump sum repaid through a daily percentage of card sales. No collateral required, but total costs can be significant. Compare carefully before committing.
• Business credit cards: Suitable for smaller, ongoing expenses. No collateral required, and many offer introductory rates or rewards for new accounts.

For a deeper look at how each of these products works and when each makes sense, see our overview of how small business loans work.

What Is a Personal Guarantee and Does It Count as Collateral?

A personal guarantee is a legal commitment in which you, as the business owner, agree to repay the loan from your personal finances if the business cannot. It is not the same as collateral. Collateral is a specific asset pledged upfront. A guarantee is a promise to cover the debt personally if the business fails to do so.

From a practical standpoint, many borrowers are surprised to find a personal guarantee clause in what was advertised as an unsecured loan. This matters because if you default, the lender can pursue your personal savings, home equity, or other personal assets. Read the full loan agreement carefully and ask your lender directly whether a personal guarantee is required before you sign anything.

How Lenders Qualify You When There Is No Collateral

When there is no asset to fall back on, lenders focus their evaluation on the financial health of your business and your personal creditworthiness. According to the Consumer Financial Protection Bureau, reviewing your credit report before applying is one of the most important steps any borrower can take. You can access your personal credit report for free at AnnualCreditReport.com.

• Personal credit score: Lenders set their own minimum requirements, which they rarely publish publicly. Checking your rate with multiple lenders through a soft pull will not affect your credit score.
• Business revenue: Most unsecured lenders want to see consistent monthly income. The threshold varies by lender and product type.
• Time in business: Many lenders require at least six months to two years of operating history for unsecured products.
• Debt-to-income ratio: Existing obligations reduce how much a lender will extend, whether the loan is secured or not.
• Business credit profile: A separate business credit score, if you have one established, strengthens your application alongside your personal score.

Startups and early-stage businesses often face the most limited path to unsecured lending because they lack the operating history lenders rely on. Specialized programs and nonprofit lenders exist for that situation, covered in the next section.

Which Unsecured Loan Is Right for Your Business?

Not every unsecured product fits every business. The right choice depends on how long you have been operating, what you need the money for, and how quickly you need access to funds. Use this framework to narrow your options before you start comparing lenders:

• Two or more years in business with steady revenue: An unsecured term loan or business line of credit from a bank or credit union is likely your most cost-effective option.
• Six months to two years in business: Look at SBA Microloans or online lenders that specialize in shorter operating history requirements.
• Outstanding unpaid customer invoices: Invoice financing lets you unlock cash tied up in receivables without pledging outside assets.
• Ongoing or unpredictable expenses: A business line of credit or business credit card works well for recurring needs where the exact amount required changes month to month.
• High daily card sales and an immediate cash need: A merchant cash advance may be an option, but compare the total repayment cost, not just the advance amount, before committing.

What If You Can’t Qualify for Any Unsecured Loan?

This is the question most guides skip. If your credit is low, your business is very new, and your monthly revenue is limited, most unsecured lenders will decline your application. You still have realistic paths forward.

First, consider an SBA Microloan through a nonprofit intermediary. These organizations are funded specifically to serve borrowers who do not meet conventional bank standards, and their underwriting takes the full picture of your business into account, not just a credit score. You can search for approved intermediaries using the SBA’s program page at sba.gov/funding-programs/loans/microloans.

Second, some business owners build toward unsecured financing by starting with a smaller secured loan using existing business equipment or inventory, repaying it on time, and then applying for unsecured products once they have an established repayment track record. If your credit score is the primary barrier, see our guide on getting a small business loan with bad credit for strategies built around that specific situation.

Third, community development financial institutions (CDFIs) often serve borrowers that traditional lenders turn away. CDFIs are nonprofit lenders certified by the U.S. Treasury, and many focus specifically on small businesses in underserved markets. The SBA’s website includes resources for locating CDFI lenders in your area.

How to Apply for a Small Business Loan Without Collateral

The application process for an unsecured business loan follows the same general steps as any business loan, but lenders will scrutinize your financial documents more closely when no asset backs the debt. In practice, many borrowers submit applications with incomplete or inconsistent financial records, which is one of the most common and most avoidable reasons for delays or denials.

1. Check your personal and business credit reports. Review both for errors and address any outstanding issues before you apply. Access your personal report at no cost through AnnualCreditReport.com.
2. Gather financial statements. Most lenders require at least three to six months of business bank statements, a profit and loss statement, and your most recent tax returns.
3. Determine exactly how much you need. Borrow only what your projected cash flow can comfortably service. Oversized loan requests reduce approval odds and increase repayment pressure.
4. Compare multiple lenders. Banks, credit unions, and online lenders each offer unsecured business products at different terms. Soft-pull rate checks let you compare offers without affecting your credit score.
5. Read the personal guarantee clause. Before signing, confirm whether a personal guarantee is required and understand which of your personal assets could be at risk if the business cannot repay.
6. Submit your application with a clear use-of-funds statement. Lenders want to know how you plan to use the money. A specific, credible explanation improves your application.

For more guidance on the full borrowing process and to compare loan types side by side, visit the small business loans resource center on 1TopLife.