Unsecured Business Funding
made Simple

No obligation, Free to apply

Best Unsecured Business Funding

4 Results

Advertiser disclosure

Offers shown here are from third-party advertisers. We are not an agent, representative, or broker of any advertiser, and we don’t endorse or recommend any particular offer. Information is provided by the advertiser and is shown without any representation or warranty from us as to its accuracy or applicability. Each offer is subject to the advertiser’s review, approval, and terms. We receive compensation from companies whose offers are shown here, and that may impact how and where offers appear (and in what order). We don’t include all products or offers out there, but we hope what you see will give you some great options.

#1 Choice
Learn More

Merchant Growth

$5,000 - $500,000
Loan Amount
Starting at 12.99%
APR Range
  • Apply in 30 seconds
  • Won’t damage credit
  • Find the perfect loan
Pros & Cons
Extra Details
Popular
Learn More

Smarter Loans

$5,000 - $500,000
Loan Amount
Starting at 4.96%
Apr Range
  • Apply in 30 seconds
  • Won’t damage credit
  • Find the perfect loan
Pros & Cons
Extra Details
Best Value
Learn More

Loans Canada

$5,000 - $500,000
Loan Amount
Starting at 6.37%
Apr Range
  • 100% free
  • No obligation
  • Get personalized offers
Pros & Cons
Extra Details
Learn More

Forward Funding

$5,000 - $500,000
Loan Amount
Starting at 12.99%
Apr Range
  • Minimum $5k in sales/month
  • Canadian-based business
  • Bank Statements
Pros & Cons
Extra Details

Access the
best working capital loans in Canada

You can be sure you’re getting the best working capital loans with Comparewise.

Quick & Simple

Quick & Simple

Beat the market by accessing the best, most current rates in seconds.

100% Free

100% Free

You'll never pay a cent for Comparewise services. We're 100% broker-funded.

Best Rates

Best Rates

We shop around so you don't have to. Skip the search and get the best rate.

Safe & Secure

Safe & Secure

Rest assured that your application is secure. We connect you with only top providers.

Unsecured Business Funding

Business loans help keep a business afloat, but unsecured business funding is not your regular loan. Unsecured business loans are one of Canada’s most popular types of loans today. Though the borrower has a lot to benefit from this type of loan, there are still downsides to it. So, what makes up this type of business funding, and how do you know if it’s right for you?

Unsecured business funding does not require your business to hand over collateral for loans. There are different types of unsecured company funding to suit your business needs. Ensure you meet the criteria before you begin your application. Try lenders like SharpShooter, Loans Canada, Meridian and other trusted companies in Canada for the best services.

There is an ongoing debate about which is better between a secured and an unsecured business loan. As a business owner, you need to tell these types apart and determine which is best. Thanks to this post, you’ll get all the information you need concerning unsecured business funding to apply for it.

Unsecured Business Funding - Comparewise

What is Unsecured Business Funding?

Unsecured business loans are funding that doesn’t require access to the company’s assets, property, accounts receivable, or inventory as security. The credit history and cash flow of the company will basically determine the amount of funding it may get. Nevertheless, these loans are offered to borrowers with both strong and weak credit histories.

The creditworthiness of the borrower or borrower company is the sole criterion for approval of these loans. Unsecured company loans can fill a funding gap, purchase necessary assets and machinery, or implement rapid growth strategies. Most lenders won’t ask for collateral. But they’ll almost certainly want you to sign a personal guarantee giving them access to your assets in the highly unlikely case of a default. Despite this restriction, unsecured business loans continue to offer a low-risk method for businesses to increase their working capital.

Top Unsecured Business Funding Partners in CanadaGet a Rate
ClearcoClick here >>
Forward FundingClick here >>
Growth Street CapitalClick here >>
Kingsmen Capital InvestmentsClick here >>
Merchant GrowthClick here >>
Smarter LoansClick here >>

How Unsecured Business Funding Works

Without needing collateral, an unsecured company loan can provide your small or new enterprise with much-needed working capital. Collateral is any item of value that may be pledged as payment on a loan. Collaterals might be real estate or some other asset.

In the standard system,  the collateral safeguards the lender to some extent. The collateral comes into play if the business fails to make its loan payments. The lender can seize the collateral and sell it to recuperate part or all the lost funds.

Unsecured business funding comes in various forms and may be streamlined to meet every company’s specific needs. The lender doesn’t have to spend time determining the value of your collateral. Hence, you may get your hands on the money on the very same day.

You can get a loan that you pay back in a few months. You can also get one that you pay back over a decade or more, depending on your situation. Throughout a certain period, you will make regular payments (either monthly or quarterly). You may also be able to pre-pay the loan (with or without a charge).

Pros of Unsecured Business Funding

Below are some of the benefits of unsecured business loans:

1.  Reduced Time Required to Apply for a Loan

The effort required to apply for a company loan might be substantial. Banks and other lenders need assurances that their borrowers will repay their money on time and in full.

In light of this, every application for a company loan is subject to stringent scrutiny by the lending institution. When a firm submits collateral, the lender must evaluate the item thoroughly to establish its worth, which might take some time.

The lender isn’t concerned with the company’s assets in an unsecured business loan. Instead, they are after its credit history, monthly sales, and length of operation.

Due to the shortened application procedure, funding is usually provided within 24 hours of the application being submitted. Many business owners choose this because it allows them to receive extra funding as soon as the following business day.

2.  You Won’t Put Any Collateral at Risk

For businesses seeking financing, collateralized loans are the safest option. For instance, a mortgage on an office building is backed by the value of the building itself. Since the property was pledged as security, the lender might take it back if you stopped making payments.

Companies may sometimes try to get their properties back and repay the debt. However, secured debts are seldom forgiven in bankruptcy or other legal proceedings. Lenders typically receive collateral in exchange for making loans.

3.  No Security Is Needed

Insufficient collateral is a common problem for businesses. For instance, a new company may not yet have established enough equity to provide sufficient security for a loan. As a result, the firm would be ineligible for the most secured business funding options.

On the other hand, unsecured business loans do not necessitate the borrower to put up any collateral. Instead, factors, including a company’s business plan and market potential, are considered.

Loans for firms that do not have collateral are still an option for many start-ups and small enterprises. This means people in such categories should look at unsecured alternatives before considering other loans. When you apply for an unsecured loan, the lender may ask for a personal guarantee instead of security.

Renovation Business Loan - Comparewise

Cons of Unsecured Business Funding

There are some downsides to getting these types of business funding. Some of these disadvantages include:

1.  Typical Loan Amounts Are Lower

Large unsecured loans are less likely to be approved by standard internet lenders due to the higher risk involved. As the collateral safeguards the lender, they are more likely to provide big, secured loans to businesses.

Unsecured loans will help you with that urgent money. However, you won’t have enough money to make any major purchases with the money you borrow.

2.  Interest Rate Increase

It’s more dangerous for lenders to give out unsecured company loans. If your company defaults, the lender can quickly recuperate its losses by taking possession of the collateral. No collateral is required for an unsecured business loan.

Therefore, the interest rate for an unsecured loan will be greater than that of a secured loan. A secured business loan might be a better option if you’re concerned about your company’s interest rate.

3.  They Have Stricter Requirements

When you don’t have collateral to provide a lender, they must scrutinize other parts of your organization more seriously. Lenders only want to keep their risk to a minimum.

If you run a start-up or have a low credit score, you probably won’t be approved for an unsecured loan. If you can’t be approved for an unsecured loan right now, you might need to investigate other forms of financing. You can also wait until your credit score is higher before applying.

Jul 30 - Comparewise Business Loan Banner

Types of Unsecured Business Funding

Below are the types of unsecured business loans you may get for your business:

1.   Unsecured Business Term Loan

An unsecured term loan is the most common tried-and-trusted method when funding a business. A lending company offers the borrower a certain quantity of money, and the latter makes payments over time. Both the principal and interest are due at predetermined intervals. Borrowers will make regular payments to the lender until the debt is paid in full.

2.  Equipment Funding

Equipment financing is taking out a loan specifically to fund the acquisition of new machinery. In this case, the purchased item serves as security, so no further collateral is required.

3.  Unsecured Credit Line for Business Purposes

In this case, you may borrow any amount up to the credit line’s maximum limit. Hence, a credit line for business is a very convenient method of financing. As soon as you withdraw funds from your line of credit, you will begin accruing interest only on the outstanding balance.

The versatility of a line of credit is its greatest strength. The money may be used for anything, from payroll and new equipment to help cash flow during slow times.

4.  Credit Cards for Businesses

Credit cards issued to businesses function in the same manner that cards issued to individuals do. You have a monthly spending restriction that resets to zero after the billing cycle.

Suppose your company currently uses corporate credit cards. In that case, they might be an easy way to meet a temporary cash flow need. Bonuses like cash-back deals and frequent-flier miles can also be available to you.

5.  Merchant Cash Advances

Retail and service commercial establishments that primarily accept debit and credit card payments might benefit from this funding. A certain proportion of daily credit and debit card sales will be deducted from the business’s account to repay the loan.

How To Bring A Small Business Online-Comparewise

Canada’s Unsecured Business Loan Application Process

Here are the steps you should take to apply for an unsecured business loan in Canada:

  • Research the offers from several companies: Find the best lender for your company by comparing at least three or four options. It’s recommended to be pre-approved to receive an accurate price quote.
  • You can submit your application online or in person: To apply for an unsecured business loan, you can do itonline or by physically going to a bank.
  • Specify your personal information: Include details such as complete name, DOB, address, phone number, and email.
  • Give your company’s details: Describe your firm by including its physical location, age in business, yearly revenue, assets, and liabilities.
  • Provide financial details: Simply enter your bank’s name, transit number, and account number.
  • Permit a credit check: If you want a lender to check your credit, you must permit them.
  • Give evidence in the form of documents: Include supporting documents with your application to prove your identity, business revenue, and other pertinent information.
  • Include all required materials with your application: Put in a request and see if you are approved.

Requirements for Unsecured Business Funding in Canada

You may need to fulfill the following criteria for these types of loans in Canada:

  • You need to be the legal age in your state or province.
  • Have a legitimate Canadian address and an active bank account and be a citizen or permanent resident of Canada.
  • Provide a tax ID and evidence of operation for at least six months (start-up loans are available if you don’t qualify).
  • Submit your financial records to show you can handle loans. These records include monthly or annual sales reports or other documentation the lender needs.
  • Some unsecured business funding needs a personal guarantee. This means that you may be held personally liable for the loan’s repayment if the firm fails to do so.

Providers of Unsecured Business Loans in Canada

The following Canadian companies may be able to provide you with an unsecured business loan:

1.  Banks

Canada’s Big Five banks and several smaller, locally owned banks provide consumer loans. Canadian banks, including BMO, TD, RBC, CIBC, Scotiabank, HSBC, National Bank, and Canadian Western Bank, are among those who provide services.

2.  Financial Institutions

Loans from credit unions are typically more adaptable than those from large banks. However, you may be forced to become a member. Vancity, Meridian, Servus, Connect First, Alterna Savings, Connexus, Steinbach, First West, and Coast Capital Savings are just a few.

3.  Private Lenders

With private lenders, bad credit loan applicants still have a fighting chance of getting approved for low-interest online loans. Thinking Capital, Loans Canada, OnDeck, SharpShooter, Company Capital, and Lending Loop are just a few providers.

Unsecured Business Funding Conclusion

Now you have a comprehensive understanding of this unsecured business funding. And you should be equipped to determine what’s best for your business.

Bear in mind that businesses should try to maintain a good credit score to easily qualify for unsecured business funding. Businesses should also expect higher interest rates for this type of funding.

By working with a trusted lender, businesses can obtain the funds they need without putting up collateral. As a result, it can be an excellent option for businesses that don’t have the assets necessary to secure traditional financing.

Unsecured funding can be a great way for Canadian businesses to get the financing they need to grow and expand.

You might also like…

Business Loans in AlbertaBusiness Loans in British ColumbiaBusiness Loans in ManitobaBusiness Loans in New Brunswick
Business Loans in Newfoundland and LabradorBusiness Loans in Nova ScotiaBusiness Loans in OntarioBusiness Loans in Prince Edward Island
Business Loans in QuebecBusiness Loans in Saskatchewan

Discover Investment Opportunities

Make your money do more.

12 Results

Advertiser disclosure

Offers shown here are from third-party advertisers. We are not an agent, representative, or broker of any advertiser, and we don’t endorse or recommend any particular offer. Information is provided by the advertiser and is shown without any representation or warranty from us as to its accuracy or applicability. Each offer is subject to the advertiser’s review, approval, and terms. We receive compensation from companies whose offers are shown here, and that may impact how and where offers appear (and in what order). We don’t include all products or offers out there, but we hope what you see will give you some great options.

Young investors can trade stocks and ETFs, all for free.
Min Investment
$0
Target Return
Varied
Get 50 Free Trades on Canada's #1 trading platforms.
Min Investment
$0
Target Return
Varied
Get $20 CAD of BTC with promo code: COMPAREWISE
Min Investment
$100
Target Return
4-7%
Earn passive income, start investing in real estate.
Min Investment
$1
Target Return
Varied
Use code KKZH8A when you sign up to get 2 free stocks
Min Investment
$1
Target Return
Varied
Get a $50 bonus when you sign up and deposit $250.
Min Investment
$50
Target Return
Varied
A new passive income asset class, peer-to-peer lending.
Min Investment
$1
Target Return
Varied
Retire up to 30% wealthier with Questwealth Portfolio.
Min Investment
$1
Target Return
Varied
Earn rewards when you buy and sell crypto on BlockFi
Min Investment
$1
Target Return
Up to 8.6%
Buying and seucring gold has never beeng more simple and affordable.
Min Investment
$1
Target Return
Varied
Get a $25 bonus when you sign up and trade.
Min Investment
$10
Target Return
Varied
Online real estate investment in one platform
Min Investment
$25,000
Target Return
9-24%

comparewise

September 21, 2022
Fact Checked

Grow your finances today.

By submitting, you agree to comparewise’s terms of use and privacy policy.

FAQs about Unsecured Business Funding

What Is a Secured Business Loan?

A secured business loan is one where the collateral is used to guarantee the lender of the borrower’s fidelity. It is contrary to unsecured business loans, and the borrower enjoys higher loan amounts and lowers interest rates. However, the borrower may have to bear the task of finding suitable collateral.

Is Unsecured Business Loan Right for My Business?

Many companies benefit significantly from unsecured funding, and yours might be one of them. To be sure, it's best to weigh the pros and cons of an unsecured loan before committing to one.

Is a Small Business Loan Secured or Unsecured?

A loan for a small business might be secured or unsecured. A secured business loan may be more appealing because of the extended repayment period and lower interest rate. An unsecured loan might be a good option if you want to avoid using your valuables as security.

What are the Interest Rates on Unsecured Business Loans?

Business loans in Canada carry an interest rate calculated using the Bank of Canada policy rate. However, an extra amount proportional to the lender's perceived risk is added.

How Fast Can I Get an Unsecured Business Loan?

In most cases, you can have the money you need within hours after applying for it. The processing time for an unsecured business loan is typically substantially shorter than that of a secured loan. This is because the lender does not need to do an asset valuation.

What If I Fail to Repay the Loan?

Since you didn't put up any collateral against the loan, you won't risk losing your company's assets if you default. However, if you have guaranteed the loan with your own money, your possessions might be taken from you. Also, your credit score is likely to drop regardless of what you do.

How Does a Bad Credit History Affect My Business?

This will make future borrowing, such as for a company loan, more difficult. It can also affect your professional relationships since many businesses perform credit checks on prospective partners. Negative information on a company's credit file might be there for years, even if you take steps to improve it.

How Do I Increase My Chances to Qualify for Unsecured Business Loans?

You must ensure you maintain a good credit score and have all the required documents. Get a solid business plan that can convince your lenders. Also, have your forecasted business statements.

What Are the Qualities of a Good Unsecured Business Funding Lender?

A typical unsecured business loan lender should be flexible with processing loans and making payments. They should have speed and an easy online system for an application. It's also essential they are transparent with their services.

How Can I Choose a Lender for an Unsecured Business Funding?

When you want to compare loans from lenders, you must use an online platform. You can find a loan right for you from the comfort of your home. Also, get a financial adviser service if you need professional assistance.

Unsecured Business Funding
made Simple

No obligation, Free to apply

You may also like

Business loans help keep a business afloat, but unsecured business funding is...
Many new businesses in Canada usually require start-up business loans, as not...
Small business funding opportunities are sought after by businesses that cann...
When it comes to business, short term working capital goes a long way toward ...
Demand in the transportation sector in Canada has increased considerably in r...
Home renovation loans, sometimes known as "fixer-upper" loans, are frequently...
You can walk into a bank now for a loan, but you might not get next day busin...
A merchant cash advance is an alternative financing option if you can't get a...
When someone mentions inventory financing, what they really want to refer to ...
Sometimes, when carrying out business transactions, there is a need for long ...
The use of business loans for marketing purposes may be directly responsible ...
Buying a successful restaurant or automotive repair chain, for example, not o...
Flex Business Funding is a good option for business entrepreneurs. It's a gre...
Hiring employees for the smooth running of the business is an important aspec...
In order for you to be able to take care of unforeseen requirements, you have...
Ecommerce loans are a kind of funding that is offered to smaller online retai...
Home based business can be unique, it is not difficult to start, and it provi...
Commercial funding is a generic term that can be used to refer to any type of...
Getting a business line of credit can significantly improve your cash flow an...
Running businesses in Canada sometimes goes beyond the founder’s initial plan...