30/05/2024

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Secured vs. Unsecured Fast Business Loans

Secured vs. Unsecured Fast Business Loans

Two business owners sit at a table and look over documents with a woman.

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Fast business loans prioritize speed of funding. When you apply with the right lender, you can often get funding from a fast business loan as soon as the next day.

These loans can come in both secured and unsecured forms. There are benefits and advantages to each that can help you decide the right one for you.

Fast secured loans require collateral. To get this type of loan, you must provide an asset of value to secure the loan. If you fail to make payments, the lender can take the collateral to cover its losses. That helps reduce the lender’s risk.

Fast unsecured loans have no collateral requirements. You can apply even if your company has no assets to offer to secure the debt. But these loans may have higher rates and strict lending requirements compared to secured loans.

Term loans and business lines of credit can be both secured and unsecured. Some loans, like equipment financing and invoice financing, are secured. And some, like invoice factoring or merchant cash advances, are almost always unsecured.

If you’re looking for a fast secured business loan, consider these lenders.

Lender Loan type Funding speed Best features
Funding Circle Two days
  • One quick application that shows what loans you’re eligible for
  • Low rates and fees
SMB Compass
  • Line of credit
  • Equipment loan
  • Bridge loan
24 to 48 hours for most types of loans
  • Wide variety of loan options
  • Low starting rates
  • High loan amounts
National Funding As soon as 24 hours
  • Lowest payment guarantee
  • Early payoff discount
Lendio Next business day
  • Shows offers from large network of lenders

Compare fast unsecured business loans

Consider these options if you’re looking for an unsecured loan that offers quick funding.

Lender Loan type Funding speed Best features
OnDeck Line of credit Same-day
  • Early payment discount
  • Low credit score requirements
Fundbox Line of credit Next business day
  • Low credit score requirements
  • No early repayment penalty
Credibly Line of credit Same-day
  • Minimal eligibility requirements
  • Variety of loans available

A secured loan is a great fit if you need quick funds and have assets to provide as collateral. Since there is less risk involved, lenders tend to offer the most affordable rates and terms for these loans.

Secured term loans and business lines of credit are also more accessible than unsecured loans. So if you are a startup or a business owner with fair-to-bad credit, a secured loan can help you secure affordable financing.

Unsecured loans typically have quicker application processes than secured loans because the lender doesn’t have to examine the collateral to assess its value. If you need money quickly, skipping the collateral may speed up the process.

An unsecured loan is also a good choice if you plan to pay the loan off quickly. The extra effort of offering collateral to lower the interest rate won’t save you much if the loan only lasts a few months.

You may also consider an unsecured business loan if you have no collateral. If you don’t have assets, an unsecured loan is the only option.

Bottom line

If you’re a business owner needing funds quickly, you’ll want to opt for a lender focusing on quick underwriting and approval. Many online lenders offer both secured and unsecured business loans.

Though secured loans require that you put your business’s assets at risk, doing so can be worth it because you’ll save money through lower rates and fees. Before you apply for any business loan, take the time to shop around for the best deal.

  • No, not all business loans need to be secured. If your company has strong financials, good credit, and a long operating history, that can help it qualify for unsecured loans. But some lenders may ask for a personal guarantee in place of collateral.
  • Whether you want a secured or unsecured loan, the process starts the same: you’ll have to find a lender and fill out an application. Both loan types require similar info, such as your company’s financial documents, credit score, personal information and business plans. When applying for a secured loan, you’ll need to provide details about the proposed collateral.

  • Applying for an unsecured business loan is like applying for most other types of loans. Find a lender, fill out the application, provide documents like financial statements and wait for the lender to decide.