How to Get a Small Personal Loan Without Collateral

A small personal loan without collateral is an ideal option to keep your business operation running smoothly. If you’re in need of capital for things like emergency facility repairs, online medical financing or payment of unexpected higher tax bill, a non-collateral small personal loan can be a good choice for you.

Let’s find out how to get it.

Getting a small personal loan without collateral

To obtain a small personal loan without collateral, you will need to provide either a blanket UCC lien or a personal guarantee. They help lenders to minimize the risk of lending to you without needing you to offer any specific collateral. So, if these are acceptable to you, below are the options available for you.

SBA Loan

There are some small business loans available backed by Small Business Administration (SBA), that don’t need collateral. Even startups can apply for these loans.

Since SBA promises to repay up to 85% of the loan in case the borrower defaults, most lenders easily provide this loan. This guarantee acts as collateral itself and ensures banks that they are not taking such big risk all by themselves.

You must have a strong credit score (not less than 620), borrowing history and a solid business plan to qualify for an SBA loan. According to SBA, about 95% of all small businesses are eligible for an SBA loan. Their 7(a) program requires borrowers to show only the evidence of positive cash flow to obtain the capital.

Alternative Lenders

Though numerous lenders require a personal guarantee of cash flow, they don’t necessarily need collateral. Below are some good options.

A term loan: This is a lump sum that you borrow and repay along with an annual percentage rate within 4 or 5 years.

A line of credit: In this loan, you get a set amount of cash that you utilize whenever is needed. This loan type is used by businesses need to finance cash-flow gaps.

Generally, it is a disposition amid a financial institution and borrower that sets up a maximum loan balance that lender permits the borrower to maintain. As long as a borrower doesn’t exceed the maximum amount set in the agreement, he can get funds from the line of credit at any time.

Merchant Cash Advances: Merchant cash advance is another great option if you don’t want collateral. These financing companies purchase your future assets instead of asking you for collateral.

In this type of financing option, you get a set amount of cash which you pay back with a set percent of your daily credit card sales. The major advantage of this option is, you pay more when business is strong and less when it is making a loss.

Final Thoughts

These are a few most-liked financing options that you can apply for if you don’t want to give anything as collateral. Take help from to find out more options available for you.

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