An unsecured business loan is a funding solution offered to a business client. It does not require him to provide any personal or business assets as collateral. However, these loans require the borrower to show the lender a good credit rating, with excellent financial history and cash flow forecast. The finance house takes more of the risk involved in granting the loan and therefore, demands a higher interest rate.

With an unsecured business loan, the lender doesn’t have to evaluate collateral, and can instead focus on other factors, such as the business’s credit report and monthly sales. This streamlined application process often results in funds being distributed faster.