An unsecured small business loans are financing that is obtained without providing collateral. Collateral is something that you or your business owns that you pledge as security for repayment and could include property, such as your home or vehicle, your savings, unpaid invoices, inventory and more.
Essentially, the loan is issued and supported only by the borrower’s creditworthiness. With unsecured business loans, the lender cannot seek repayment by going after your assets. However, you still need to meet income and credit requirements, and many alternative lenders ask for a personal guarantee from the directors of the business.