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The Best Unsecured Business Line of Credit for Startups Today

May 2, 2023
Unsecured Business Line of Credit for a Startup Credit Suite

Looking for an unsecured business line of credit for a startup? Getting a business line of credit—particularly an unsecured business LOC can be difficult even for a small business with some time under its belt.

Can a small business owner get any sort of startup business line of credit if their business is still young?

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Click to download Credit Suite’s 12 business credit cards and credit lines business guide. Learn everything you need to know about getting the best credit cards for your business. via Credit Suite

Best Unsecured Business Line of Credit for a Startup

Unsecured Business Line of Credit for a Startup 1 – Valued Merchant Services

VMS offers a secured business line and unsecured small business lines of credit, loans, and a business credit card cash advance for small businesses across the United States. They work with a lender marketplace so you can choose your best possible rates.

Lenders in their online marketplace include Fundbox, OnDeck, BlueVine, and Kabbage.

Benefits of working with them include:

  • No collateral is required
  • No Personal Guarantee
  • Bad credit and limited credit are both accepted
  • Get funding in as little as 5 – 10 days
  • Low or no upfront fees
  • Simple application process with a quick prequalification
  • Even businesses with as little as $2500 per month in sales can get a credit line through them
  • Startups welcome! Their unsecured business LOC is available to businesses with as little as six months of history
  • Their small business unsecured line of credit is available to most retail, restaurant, and service businesses
  • Even some home-based and internet businesses can qualify
  • They offer multiple rates, cost, and term options

Your small business can also get credit card processing and mobile payment solutions through them. A small business will be able to accept Visa, American Express, MasterCard, and Discover credit cards with their services.

Get business funding for $5,000 up to $50 million through them. Get funding in as little as 24 hours. 

Other products include a merchant cash advance, an SBA loan, equipment financing, and a collateralized business loan. They will want to see a financial report on your small business. But they will only do a soft credit pull, so your personal credit will not be affected

VMS provides a loan advisor and they will not release your personal information to any lender until you agree to an offer.

Best For Startups with Lower Revenues

This unsecured business lender is the best business loan for startup businesses that do not yet have high revenues.

Unsecured Business Line of Credit for a Startup 2 – Fundbox

Fundbox offers an unsecured business LOC and you only have to be in business for six months or more. This requirement fits well within a standard startup timeline in most industries. 

In addition, you will need to have a personal credit score of at least 600. Your small business will have to be bringing in $100,000 or more per year. Plus, you will have to already have a business bank account. Your small business must be based in the United States. 

Applying will not affect your personal credit history.

Get up to $150,000. If approved, you can get access to funds by the next business day. 

Use their line of credit to optimize your business cash flow. Only pay for what you use. Once you receive your funds, you can repay to replenish your available credit limit, then draw again when you need it.

Unsecured Business Line of Credit for a Startup Credit SuiteIf you’re an independent startup owner, you may need to make a personal guarantee in order to qualify. But because their revolving LOCs are unsecured, you will not need to provide any collateral.

You can apply for this startup business loan online directly through the Fundbox app and get a decision in as little as three minutes. Fundbox is purely online banking, so you can make draws directly from your Fundbox dashboard or from the Fundbox app.

You can choose your repayment plan each time you draw funds—with no prepayment penalty. Credit line amounts, rates, and terms are based on creditworthiness and of course, are subject to change.

Best For Startups Bringing in Good Profits

This unsecured business loan is the best of the business funding options for a small business that is already bringing in good profits.

This form of business financing is also good for entrepreneurs who only need a moderate loan amount for business capital.

Unsecured Business Line of Credit for a Startup 3 – Wells Fargo

Wells Fargo offers more than one business line of credit. In general, guarantors have a FICO Score of at least 680 at the time of application.

Each account requires personal guarantees from any company owner with 25% or more ownership in the applicant business, with a minimum combined aggregate of 51% ownership.

Wells Fargo provides a MasterCard business credit card to access your line of credit. You can set up automatic payments from your business checking account and even enroll in overdraft protection.

BusinessLine Line of Credit

Their BusinessLine LOC is an unsecured line of credit for businesses with two or more years under their belts. For new customers, there is no annual fee for the first year.

Get $10,000 to $150,000 in a revolving credit line, with rates as low as Prime + 1.75%. They will also automatically enroll you in a free rewards program. There is no scheduled annual review.

After the first year, an annual fee of $95 (if the business credit line amount is $10,000 – $25,000) or $175 (if the small business credit line amount is more than $25,000) will be assessed on your anniversary month in subsequent years.

Small Business Advantage Line of Credit

Their Small Business Advantage line of credit is for customers in business for less than two years. There is no annual fee. Small business owners can get $5,000 to $50,000 in a five-year revolving LOC, with rates as low as Prime + 4.50%. 

Wells Fargo provides automatic enrollment in a free rewards program with their financing.

Because this line of credit is backed by the Small Business Administration, you will have to meet SBA standards for a small business. This means your household must have personal liquid assets that are less than $500,000. For-Profit businesses only.

Best For Two-Year-Old Startups that Meet SBA Requirements

The BusinessLine is best for small businesses which have passed the two-year mark—and have budgeted for paying the annual fee for this alternative to a term loan.

Unsecured Business Line of Credit for a Startup 4 – Sunwise Capital

Sunwise Capital offers an unsecured business line of credit for applicants with twelve or more months in business and at least $15,000 in monthly revenue. And an entrepreneur can get this line of credit with a personal credit score of 500 or better.

Entrepreneurs can get $10,000 to $2 million in funding with 24-hour approvals and same-day funding for this fast business loan.

This is considered a long-term loan. But unlike a regular term loan, you only pay interest on the amount that you draw from your credit limit. You do not have to pay interest on the entire amount unless you withdraw the entire amount of the small business line of credit.

SunWise Capital also offers a revolving line of credit. To qualify for it, you will have to be in business for a minimum of two years. Annual revenue must be $1 million to $50 million. And their interest rate currently runs from 7.99% to 18.00%.

This is an interest rate that is better than a merchant cash advance.

A small business can get $250,000 to $10 million with the revolving business LOC. Get a quick credit decision and credit approval, with access to a cash advance in 4 to 7 business days.

Essentially, their revolving LOC is a form of factoring. Therefore, while you are not securing it with equipment, land, vehicles, or personal property, it is being secured—by credit card invoices. This makes it a lot more like a secured business loan.

Best For Startup Owners with Poor Personal Credit Scores

The Sunwise Capital startup business line of credit is best for small businesses where the owners have bad credit.

The revolving credit line, like other forms of business factoring, is best for small businesses with proven, regular credit card sales looking to smooth out their cash flow problems.

Unsecured Business Line of Credit for a Startup 5 – Bluevine

Bluevine offers a business LOC which can be used for starting up. However, note that the minimum time in business is 24 months. So, this is not for a business that is just getting off the ground.

An entrepreneur can get up to $250,000, with rates as low as 6.2%. Get a decision in as fast as five minutes. You will be able to draw funds in a few hours.

You will need to have a personal credit score of at least 625 in order to qualify. Your business must have been in operation for at least 24 months. It needs to be bringing in $40,000 or more in revenue—per month.

To apply, they will need a bank connection or bank statements for the past three months, and basic information about you and your business.

You must be either incorporated in or operating in an eligible state. Due to state regulations, they are unable to provide lines of credit in Nevada, North Dakota, or South Dakota. 

However, given the qualification about being incorporated in an eligible state, it would behoove small business owners to check with legal counsel or at least an accountant and/or the Secretary of State’s office, to see if they can get funding if they are incorporated in, say, Ohio.

Bluevine will deduct its payment from your business bank account on a weekly basis. Your repayment term is 6 or 12 months. There are no early payment or repayment fees.

Invoice Factoring as an Alternative

If your business cannot meet Bluevine’s eligibility requirements, they suggest invoice factoring as one of their viable alternative financing options. 

Bluevine offers factoring services via FundThrough. When applying, you will need to provide the following documentation:

  • Business formation documents, such as LLC certificates or Articles of Incorporation
  • Government-issued photo ID, i.e., driver’s license or passport
  • Voided check from your business checking account
  • Recent business tax documents

For factoring, FundThrough supports QuickBooks, so you can simply link it to their system for convenience.

Best For Two-Year-Old Startups that do not Meet SBA Requirements

Much like Wells Fargo, the Bluevine unsecured line of credit is for startups that have passed the two-year mark. However, unlike Wells Fargo, there is no need to meet SBA requirements in order to get financing from this lender.

Click to download Credit Suite’s 12 business credit cards and credit lines business guide. Learn everything you need to know about getting the best credit cards for your business. via Credit Suite

Business Line of Credit Pros

The biggest pro for a line of credit (whether secured or unsecured) is that you are only paying interest on the amount that you draw. Contrast this with a traditional small business loan, where you are paying interest on the entire loan from Day One.

Unsecured business lines of credit are also convenient. You can usually apply for them online. Many of them are accessible via an app. Being able to apply through an app and/or pay the line of credit back through an app is a rather attractive feature.

Another attractive feature is that you can often qualify by simply allowing access to your business’s bank account. Approval or rejection is a purely objective matter. This type of access also allows for extremely fast decisions. 

There are plenty of choices for small businesses run by owners who may not have the best personal credit scores. There are also options for some rather high amounts on loan. 

Business owners should keep in mind that low consumer credit scores + no collateral + high amounts will mean that a small business will have to be bringing in significant revenue in order to even be considered.

Due to objective decisions and the prevalence of fintech in this space, industries which may have trouble getting funding will have an easier time of it. These include hazardous industries like trucking, vice industries like bars, and industries with a low barrier of entry, like life coaching.

In fact, unless it is clearly spelled out as being excluded, startup cannabis business owners should seriously consider applying for unsecured business lines of credit, particularly if they are operating in and/or incorporated in a state where cannabis has been fully decriminalized.

Business Line of Credit Cons

While business owners with poor consumer credit scores may qualify for unsecured credit lines for business, the flip side of that coin is the lender will get an assurance of timely repayment some other way. Often, this is with some combination of the following:  Unsecured Business Line of Credit for a Startup Credit Suite

  • High monthly or annual revenues
  • Longer time in business
  • Lower credit limit on offer
  • A higher interest rate
  • More expensive fees
  • Slower approval times
  • More paperwork and documentation requirements on the application
  • Personal guarantees
  • Shorter repayment periods
  • Exclusion of certain problematic industries

Let’s look at an example. An Apple store with high, provable, regular revenues and two years or more in business will be far more likely to get franchise financing than a bail bonds provider in business for six months which does not yet have reliable profits.

For all their convenience, regular draws from a business bank account can be problematic if a small business is entering a slow season. But seasonal small businesses will often have this kind of issue anyway.

Unsecured business lines of credit can often come with short payback periods. Can your small business pay back, say, a quarter of a million dollars in full, in only six months? 

If an unsecured business credit line comes with a personal guarantee, then a startup founder is putting their personal assets at risk. If the small business does not have the cash flow to meet its obligations, then an entrepreneur could conceivably lose their car.

But of course, this is the case whenever an entrepreneur offers a personal guarantee.

Click to download Credit Suite’s 12 business credit cards and credit lines business guide. Learn everything you need to know about getting the best credit cards for your business. via Credit Suite

Alternatives to an Unsecured Business Line of Credit for Startups

Alternative 1 – Credit Suite Credit Line Hybrid

Small business owners with good personal credit scores (700 or better) can take advantage of the Credit Suite Credit Line Hybrid program. 

You can get up to $150,000 in unsecured no-doc corporate credit cards.  

Any lender working with us will not ask for financials, bank statements, business plans, resumes, or any of the other burdensome document requests that a conventional lender would demand.

There is no upfront application fee. Get more than one business credit card with 0% financing for 6 to 18 months. You can also use company credit to help you qualify.

Alternative 2 – SBA Microloans

For small businesses which do not need a lot of funding, the SBA microloan program could be one of the best financing options out there. Each loan is provided by an intermediary lender.

Business owners can get up to $50,000 to rebuild, re-open, repair, enhance, or improve a small business. However, proceeds from an SBA microloan cannot be used to pay existing debts or to purchase real estate.

An intermediary lender will have its own eligibility requirements. However, they generally require some type of collateral as well as the personal guarantee of the business owner.

Alternative 3 – Business Credit Cards

Beyond the Credit Line Hybrid, building company credit is always a smart choice for a startup or any small business. 

Startup business owners can get corporate credit from Tier 1 business credit vendors without having to wait until their companies have been in operation for two years.

Also, they will not necessarily have to provide a personal guarantee or prove income—and they will not have to provide collateral. 

In fact, business owners who do not yet qualify for an unsecured LOC would do well to build business credit to make their application more attractive to a startup business LOC lender.

Alternative 4 – Equity Financing

Startup businesses that cannot get unsecured funding may do well to simply sell off a certain percentage of the small business. 

Equity financing has a long tradition in the startup scene. In addition to bootstrapping, many startup founders have sold a part of their business in order to get going and/or to stay afloat, using what’s called angel investing. A family member can be an angel investor.

In fact, an elderly family member may prefer buying a portion of your business and then willing it to you. But talk to a tax professional specializing in consumer finance before attempting that. It’s certainly better than taking out a personal loan.

Another funding option could be a secured loan, an unsecured loan, and a working capital loan. All can work as a startup loan financing option from a lender like Fora Financial.


A startup can get an unsecured LOC, even with low revenues, a short time in business, or poor personal credit.

Startup founders will do well to explore a multitude of funding options and perhaps mix and match them for the best rates.

Contact us today to learn more about financing options that you and your business can get.

About the author 

Janet Gershen-Siegel

Janet Gershen-Siegel is the seasoned Finance Writer and a former content manager at Credit Suite. She has been admitted to practice law for over 30 years, with a focus on litigation and product liability, and is a published author, with writing credits at Entrepreneur, FedSmith.com and BusinessingMag.com.

She has a BA in Philosophy from Boston University, a JD from the Delaware Law School of Widener University, and a MS in Interactive Media (Social Media) from Quinnipiac University.

She regularly writes for Credit Suite, which helps businesses improve Fundability™, build credit, and get approved for loans and credit lines.

Her specialties: business credit, business credit cards, business funding, crowdfunding, and law

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