Final Word

Unsecured working capital loans may be difficult to qualify for but they provide much-needed capital to grow your business. Borrowing money is a huge decision and should be reviewed with careful consideration, especially if a personal guarantee is needed. If you do choose to apply for an unsecured working capital loan, running a detailed financial analysis and careful planning of how you will use your funds, will help you secure the appropriate amount of capital.


Is it Hard to Get an Unsecured Working Capital Loan?

Getting an unsecured working capital loan requires proper documentation, a complete application, and perhaps a personal guarantee. Depending on the creditworthiness of your business or your personal finances, getting approved may be a short process. The best approach is to gather as much information as possible beforehand. While having good credit is helpful, it’s not impossible to get a working capital loan with bad credit either. 

Are There Unsecured Working Capital Loans for Startups?

Yes, there are unsecured working capital loans for startups. Since no collateral is required for an unsecured working capital loan, startups often turn to these lending options since they lack the business assets usually required as collateral. However, most unsecured options require a personal guarantee, which means you will be personally responsible if there is a default on a payment.

Can I Get an Unsecured Working Capital Loan with Bad Credit?

There are working capital loan options available for businesses with bad credit, however you may be required to put up collateral (which is a secured option). Having a stable cash flow may help improve your odds but be prepared for higher interest rates. If you have bad credit, alternative sources of funding may be better.

What is a Good Interest Rate for an Unsecured Working Capital Loan?

The interest rate for an unsecured working capital loan will vary depending on both the lender and the creditworthiness of the applicant. But as an example, you might find a lender offering an APR of 8% for an unsecured working capital loan.

About the Author

Sara Coleman

Sara Coleman

Freelance Financial Writer

Freelance writer with several years of experience covering personal finance topics such as insurance, loans, credit cards, budgeting and more.

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