Unsecured Credit Lines: Options and Requirements

If you're looking for an unsecured credit line, you have several options to consider. Some of these options include credit cards, personal loans, and home equity lines of credit (HELOCs).

To qualify for an unsecured credit line, you typically need a good credit score. A credit score of 700 or higher is often considered good, but some lenders may have more stringent requirements.

You can apply for an unsecured credit line online or in person at a bank or credit union. Some lenders may also require you to provide proof of income or employment.

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If you're looking for a business line of credit, Bluevine offers credit lines up to $250,000 with approval and funding in as little as 24 hours. This is a great option for businesses that need fast access to working capital.

OnDeck is another lender that provides fast access to working capital, accepting borrowers with a minimum credit score of 625. However, be aware that interest rates can be high compared with traditional lenders.

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Wells Fargo offers unsecured credit lines of up to $150,000, which are a good option for established businesses with strong credit. Bank lines of credit like this can be a good choice for businesses that have a solid financial history.

If you're a new business, Headway Capital offers credit lines up to $100,000 with a minimum credit score of 625. However, frequent weekly payments may be required, so be sure to review the terms carefully.

Here are some key features of these lenders to consider:

By considering these factors and doing your research, you can find the best unsecured credit line for your business needs.

If you're looking for lenders that offer unsecured credit lines, there are several options to consider. Some popular lenders include Bluevine, OnDeck, and Fundbox.

Bluevine offers a line of credit with cash available within 12 to 24 hours, and can be used to build business credit. However, it requires weekly payments and is not available in North Dakota, South Dakota, or Nevada. The minimum credit score requirement is 625, and you'll need 12 months of business experience and $120,000 in annual revenue.

OnDeck and Fundbox also offer unsecured credit lines, with OnDeck offering amounts up to $100,000 and Fundbox offering amounts up to $150,000. Fundbox has a minimum credit score requirement of 600.

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Wells Fargo is a well-established bank that offers various financial products to small businesses, including credit cards, commercial bank accounts, and financing options like business lines of credit.

Wells Fargo's unsecured BusinessLine Line of Credit is available to qualified borrowers with credit limits from $10,000 to $100,000.

The annual fee for this credit line is $95 for credit limits up to $25,000 and $175 for credit limits above that amount, but it's waived the first year.

A 3% cash advance fee applies if you use an ATM or BusinessLine Mastercard to access your funds.

Wells Fargo also offers a Small Business Advantage Line of Credit, which is available to customers in business less than two years.

This credit line offers a revolving credit line of $5,000 to $50,000, with APRs as low as the Prime Rate plus 1.75%.

All business owners holding 25% or more ownership in the company must provide a personal guarantee.

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Here are the key requirements for Wells Fargo's unsecured business line of credit:

Wells Fargo's SBA-backed unsecured line of credit offers up to $50,000, with a minimum credit score of 680 and available to borrowers with less than 24 months in business.

The household personal liquid assets must be less than $500,000, and borrowers must meet standard SBA loan requirements.

OnDeck is an online small business lender that offers business lines of credit of $6,000 - $100,000 to qualifying businesses. They consider dozens of factors when evaluating the creditworthiness of a business, making it possible for a healthy business to secure a loan even without specific assets as collateral.

OnDeck's loan approvals are based on business fundamentals like cash flow, credit history, and other metrics that demonstrate a healthy business. This approach allows business owners to get funding quickly, often in as fast as one business day.

OnDeck's repayment terms are on the short side, with flexible repayment terms of 12, 18, or 24 months. This means that each time you make a draw, you'll have a new repayment term that resets after each withdrawal.

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Here are some key features of OnDeck's business lines of credit:

OnDeck doesn't require specific collateral to secure its loans, making it a great option for businesses without a lot of assets. However, business owners do provide a personal guarantee for the loan, but there is no lien on the owner's personal assets.

OnDeck makes loan approvals to small businesses based on business fundamentals like cash flow, credit history, and other metrics that demonstrate a healthy business.

OnDeck doesn't require specific collateral to secure its loans, making it possible for a healthy business to secure a loan even if it doesn't have specific assets that could be used as collateral.

A general lien is placed on the business's assets until the loan has been paid off, but there is no lien on the owner's personal assets.

To qualify for an unsecured business line of credit, you'll typically need a personal credit score of 600 or higher, annual revenue of $50,000 or more, and at least six months in business.

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Lenders will also use your bank statements, financial accounts, and financial statements to evaluate your ability to repay potential debt.

National offers business credit lines to all companies that have been in business for over 3 months, with no minimum FICO score required.

OnDeck Business Loans do not require specific collateral, have easy application and quick decision times, and may qualify for more than a traditional secured loan.

Here are some key differences between secured and unsecured business lines of credit:

To qualify for an unsecured business line of credit, you'll typically need to meet the following criteria:

A credit line is a financing solution that gives you access to a reservoir of funds you can withdraw from up until a set maximum amount. You'll be able to withdraw at any time and won't have to make any payments unless you actually use your line of credit.

The credit limit can be anywhere between $10,000 and $5 million, and you can draw however much you want, at any time, up until the credit limit.

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Here's a breakdown of the process:

A credit line is essentially a reservoir of funds that you can draw from at any time, up to a set maximum amount. This means you can access the funds when you need them, without having to make any payments unless you actually use your credit line.

In the case of unsecured business lines of credit, you don't need to provide any collateral to get approved. This is different from a secured loan, which requires collateral to secure the loan.

You can think of a credit line as a revolving account, where you can withdraw funds, make payments, and then withdraw again from the available funds. This is similar to a credit card, where you can use the available credit limit to make purchases.

Some credit lines, like unsecured business lines of credit, have higher interest rates and shorter repayment terms compared to their secured alternatives. This is because they don't have collateral to secure the loan, making them riskier for lenders.

Here are some key characteristics of credit lines:

Business lines of credit give you access to a reservoir of funds you can withdraw from up until a set maximum amount.

A revolving line of credit is a type of credit line that doesn't require collateral, making it a great option for businesses that need flexibility.

You can withdraw funds up to a set capital limit, which will immediately be added back towards your credit line once you've repaid the initial amount you borrowed. This means you can reuse the funds you've borrowed, making it a revolving credit line.

The credit limit typically ranges from $10,000 to $5 million, and you can draw however much you want, at any time, up until the credit limit. This flexibility is priceless for growing businesses managing their cash flow.

Unlike a term loan, which grants you the entire amount upfront, a revolving line of credit allows you to borrow and repay funds as needed. This makes it ideal for covering consistent, ongoing expenses, such as payroll or operating costs.

Here's a comparison of a term loan and a revolving line of credit:

A revolving line of credit is a great option for businesses that need flexibility and can't predict their expenses.

A loan is a type of financing that allows you to borrow a specific amount of money from a lender, which you then repay with interest. This is in contrast to a credit line, which provides you with a revolving line of credit that you can draw upon as needed.

Loans can be secured or unsecured. Secured loans require collateral, such as a specific asset, to secure the loan, while unsecured loans do not. Unsecured loans are often more difficult to obtain and typically come with higher interest rates.

There are different types of unsecured loans, including traditional and non-traditional (alternative) loans. Traditional loans are often offered by banks and other financial institutions, while alternative loans are offered by online lenders.

Some benefits of unsecured loans include a fast application process, fast funding, and the ability to access capital without collateral requirements. This can be especially helpful for small business owners who need to act quickly to take advantage of opportunities.

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Here are some key differences between unsecured loans and credit lines:

Keep in mind that the specific requirements for each type of loan will depend on your business, the amount you're seeking, the lender you're working with, and the economic conditions surrounding your transaction.

You can get an unsecured loan without providing collateral, which means you don't need to offer your business's assets to back the loan.

The lack of collateral requirement reduces the amount of paperwork, speeding up the application and funding process. It also diminishes the risk for the borrower, as they won’t lose a critical business or personal asset if they end up defaulting on the financing.

OnDeck makes loan approvals based on business fundamentals like cash flow, credit history, and other metrics that demonstrate a healthy business. This makes it possible for a healthy business to secure a business loan, even if it doesn’t have specific assets that could be used as collateral.

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You can get a business line of credit without collateral, but there may be other tradeoffs that a small business may make to get it. This is the difference between a secured line of credit and an unsecured line of credit.

A general lien is placed on the business's assets until the loan has been paid off, but there is no lien on the owner's personal assets. This means business owners can get funding in as fast as one business day without needing a specific amount of real estate, inventory, or other hard assets.

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Unsecured credit lines offer quick and easy application, with fast funding available to small business owners. This is because they don't require collateral, reducing the paperwork and speeding up the process.

The lack of collateral also diminishes the risk for the borrower, as they won't lose a critical business or personal asset if they default on the financing. However, lenders have to mitigate their risk, so they'll often offer higher interest rates and shorter repayment schedules.

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Business lines of credit are generally more flexible than unsecured loans, allowing borrowers to only pay for what they use. This makes them a good option for businesses with varying cash needs.

Some key advantages of unsecured credit lines include:

However, unsecured credit lines can also have some drawbacks, such as possible higher rates and less favorable terms than secured lines of credit. Additionally, lower credit limits than secured lines of credit may be available.

If your credit score is on the lower end, lenders might be wary of letting you borrow money with an unsecured credit line. This can make it harder to get approved.

You're free to withdraw as much as you need up to the credit limit, but if you don't repay what you borrowed during the draw period, you risk overspending and ending up with a hefty payment once it's over.

Defaulting on an unsecured credit line can damage your credit and make it harder to take out financing in the future. You may also lose credibility with that specific lender and other lenders they have relationships with.

Borrowers with unsecured credit lines have a distinct advantage: there's no collateral requirement, and you don't have to pledge anything – meaning your assets are safe in the event of a default.

However, expect lenders to mitigate their risk in some way, such as offering a higher interest rate, requiring a personal guarantee, or reducing your repayment term. Consistent and timely payments will help you avoid financial trouble.

Here are some reasons why an unsecured credit line may be the preferred option:

Possible risks and challenges of an unsecured business line of credit include:

You can obtain an unsecured credit line in just a few hours by applying securely within minutes through a streamlined process, as seen with National's 1-minute application.

To use your unsecured credit line, you can hire more staff, replace or upgrade equipment, expand or relocate your building, make spontaneous purchases, resolve cash flow issues, or even purchase real estate or a new headquarters.

With an unsecured revolving line of credit, you can draw funds up to a set capital limit, which will be added back towards your credit line once you've repaid the initial amount borrowed. For example, if you have a $100,000 credit maximum and you take out $10,000, you'll only be obligated to pay back the $10,000.

Here's a breakdown of how you can use your unsecured credit line funds:

Lines of credit can fund instantly, providing fast access to the funds you need to grow your business.

You can get a credit decision in just a few minutes, which is a huge advantage over traditional lending methods.

Most lenders issue credit decisions the same day, so you won't have to wait around for weeks or months for your application to be processed and approved for funding.

Lines of credit can fund instantly, making it possible to access the funds you need right away.

Term loans can fund the same day, which is incredibly convenient and gets you back to your goals faster.

This quick processing time allows you to get the funds you need and start using them right away, without unnecessary delays.

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To obtain a line, you'll first need to determine what type of line you need. This can be a phone line, a credit line, or even a line of credit.

A phone line can be obtained by contacting your local phone service provider or by purchasing a prepaid phone card.

You can also obtain a credit line by applying for a credit card or a personal loan.

To get a line of credit, you'll typically need to have a good credit score and a stable income.

A good credit score can also help you qualify for a credit card with a higher credit limit.

A phone card can be purchased at most retail stores or online.

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You can use your unsecured business line of credit funds for almost any business purpose. Borrowers don’t have to inform their lender of their plans, which reduces the red tape and allows you to grow on your schedule.

You can hire more staff, replace or upgrade a key piece of equipment, expand or relocate your building, and even make spontaneous and ongoing purchases to take advantage of unexpected opportunities. This is especially useful for manufacturers, distributors, retailers, and even medical/healthcare and dental practices.

You can use your funds to resolve issues in cash flow due to seasonal dips in sales or slow customer payments. This can be a lifesaver for businesses that experience fluctuations in revenue.

Here are some common uses for a business line of credit:

With a business line of credit, you can draw however much you want, at any time, up until the credit limit. This means you can access the funds you need when you need them, without having to go through a lengthy approval process each time.

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Applying for a business line of credit or loan is a straightforward process that can be completed quickly. You can apply securely within minutes through a streamlined application process.

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To get started, you can fill out a 1-minute application or give a call to (877) 482-3008. This will provide you with more information on unsecured business lines of credit and unsecured business loans.

Lines of credit can fund instantly, and term loans can fund the same day. This is a significant advantage for businesses that need access to capital quickly.

Here are the steps involved in applying for a business line of credit or loan:

You can also get an instant business line of credit in just a few hours. This is a great option for businesses that need access to capital quickly to take advantage of opportunities or tackle challenges.

When comparing lenders for an unsecured credit line, it's essential to research their offerings thoroughly. Maximum credit line amounts can vary significantly between lenders, so make sure to find one that meets your needs.

Interest rates and additional fees are also crucial factors to consider. Some lenders may charge higher interest rates or more fees than others, which can increase your overall costs.

To get the best deal, research the repayment terms and renewal periods of each lender. This will help you understand how long you have to pay back the credit line and when you'll need to renew it.

Personal guarantee and/or UCC lien requirements can also impact your decision. Some lenders may require a personal guarantee, which can put your personal assets at risk.

Funding speed is another key consideration. Some lenders can provide funds quickly, while others may take longer.

Here are some key factors to compare between lenders:

Finally, consider the application process and customer service offered by each lender. A lender with a smooth application process and responsive customer service can make a big difference in your overall experience.

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An unsecured business line of credit can be either revolving or non-revolving.

A revolving line of credit allows you to withdraw funds up to a set capital limit and then repay the borrowed amount, making the funds available again. This type of credit line is often used by businesses that need access to funds on an as-needed basis.

Some business lines of credit are non-revolving, meaning that once the funds are borrowed, they must be repaid in full before additional funds can be accessed.

With a revolving line of credit, you can draw however much you want, at any time, up until the credit limit, which typically caps off anywhere between $10,000 and $5 million.

You can have ongoing access to financing with an open-ended financing option, allowing you to tap into the funds on an as-needed basis without having to reapply constantly.

Alternative unsecured business lines of credit are offered by alternative lenders, such as National, which is a FinTech marketplace and alternative lender.

Unsecured business loans typically don't require collateral. Rarely offered by lenders, except for credit cards.

These loans are difficult to qualify for, but can be a good option if you need quick access to funds.

OnDeck business loans, for example, do not require specific collateral and offer an easy application process with quick decision times.

Here are some key differences between unsecured and traditional secured loans:

With an unsecured loan, you could qualify for more money because the lender is making loan decisions based on the health of your business.

Qualifying for a loan can be a challenge, especially if you have a limited credit history or a high debt load. Your credit history can significantly impact the loan amount you're eligible for.

Smaller loan amounts may not be enough to cover your unmet financial needs. This can be frustrating, especially if you're counting on the loan to cover a specific expense.

Depending on your income, you may not qualify for a larger loan amount. Even with a steady income, lenders may still consider you a high-risk borrower.

Your current debt load can also affect the loan amount you qualify for. If you're already carrying a lot of debt, lenders may be hesitant to approve a large loan.

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A term loan is a type of financing that grants you the entire amount upfront as cash.

You're responsible for paying that back based on a set, pre-determined schedule.

If you need additional capital at any point during your repayment, you'll have to take out additional financing and go through the application process again.

Term loans are ideal for planned expenses, such as purchasing real estate or a piece of equipment with a set price.

Here's a comparison of term loans and unsecured lines of credit:

Term loans are also a good option if you need a large funding amount and can demonstrate the potential payoff of your project to the lender.

Unsecured loans offer a quick and easy application process, with fast funding available in as little as 24 to 48 hours.

Lenders like OnDeck have made online applications synonymous with quick approval times, often within an hour or less.

The lack of collateral requirement reduces the amount of paperwork, speeding up the application and funding process.

However, this also means lenders have to mitigate their risk, often by offering higher interest rates and shorter repayment schedules.

Business lines of credit are generally the more flexible option, allowing borrowers to only pay for what they use.

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OnDeck offers an unsecured line of credit that can provide up to $100K in funding.

Some lenders, like OnDeck, may qualify you for more than a traditional secured loan.

Unsecured loans can help small business owners qualify for funding when they don't have the type of collateral that many lenders require.

The loan value isn't dependent on your collateral, which means you could qualify for more money based on the health of your business.

Unsecured loans typically come with a higher interest rate than a loan that collateralizes a specific asset.

However, timely payments can help you build or strengthen your business credit profile, which is often reported to business credit bureaus.

Here are some key differences between unsecured business loans and traditional secured loans: