Many small business owners are interested in a loan or line of credit for their business, but don’t have the specific collateral a bank may require, such as real estate, inventory or other hard assets—what do you need to know about unsecured business loans?
Banks don’t generally underwrite unsecured business loans; or in other words, loans without the security of some form of specific collateral. Banks prefer to write loans based on the value of specific assets and take liens on those specific assets. In this way, the bank can significantly reduce its lending risk. This process can be difficult for business owners whose assets are not valued highly by a bank or whose assets are difficult to value or sell.
Is an OnDeck Loan an Unsecured Business Loan?
OnDeck makes loan approvals to small businesses based on business fundamentals like cash flow, credit history, and other metrics that demonstrate a healthy business; not based on the value of any particular business asset. In addition to the business credit profile, personal credit score, time in business, and cash flow, OnDeck considers dozens of other factors when evaluating the creditworthiness of any particular business. Making it possible for a healthy business, even if they don’t have specific assets that could be used as collateral, to secure a business loan.
The existence of specific hard assets doesn’t factor into our analysis of business health. When a small business takes a term loan from OnDeck, a general lien is placed on the business’s assets until the loan has been paid off (additionally OnDeck lines of credit are not collateralized with specific assets either). The business owner does provide a personal guarantee for the loan, but there is no lien on the owner’s personal assets. In this way, business owners can get funding from $5,000 – $500,000 in as fast as one business day without needing a specific amount of real estate, inventory or other hard assets; and without needing to have their specific assets appraised and valued.
If you have a healthy business, but you’re not sure about the value of a specific asset or whether or not you have adequate collateral, consider applying for a small business loan with OnDeck and you could get a decision for your business; sometimes as quickly as within an hour.
Compare Loan Requirements:
- Bank Loans: Underwritten using specific collateral. A lien on assest(s) + a personal guarantee
- Equipment Financing: Equipment as collateral + a personal guarantee
- OnDeck Loan: Doesn’t require specific assets for collateral—a general lien on business assets + a personal guarantee
A business loan from OnDeck allows many healthy businesses that don’t have assets that could be used for collateral to successfully apply for a loan.
Four Reasons to Consider a Small Business Loan from OnDeck
- We’ve already delivered over $8 billion in funds to other small businesses like yours
- We can get you an answer on your loan application quickly—often within the hour
- OnDeck is a publicly traded company with a Better Business Bureau rating of A+
- We make loans from $5,000 to $500,000
We’ve already delivered over $8 billion in funds to other small businesses like yours
We can get you an answer on your loan application quickly
OnDeck is a publicly traded company with a Better Business Bureau rating of A+
Ready to unlock opportunity?
We make loans from $5,000 to $500,000
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Minimum qualifications for approval
We’ll evaluate your business criteria to help find the loan that’s right for your business.
- Time in Business
At least 1 year in business
- Personal Credit Score
- Annual Revenue