Unsecured commercial loans are business loans that do not require collateral to secure the borrowed funds. These loans are typically based on the borrower’s creditworthiness, financial history, and cash flow rather than assets. Because they pose a higher risk to lenders, unsecured commercial loans often have higher interest rates compared to secured loans. They are commonly used for working capital, inventory purchases, marketing expenses, or other operational needs where quick access to funds is essential without the need to pledge equipment, property, or other business assets. Approval criteria tend to be stricter, focusing on credit scores, business performance, and revenue stability.
Unsecured commercial loans are business loans that do not require collateral to secure the borrowed funds. These loans are typically based on the borrower’s creditworthiness, financial history, and cash flow rather than assets. Because they pose a higher risk to lenders, unsecured commercial loans often have higher interest rates compared to secured loans. They are commonly used for working capital, inventory purchases, marketing expenses, or other operational needs where quick access to funds is essential without the need to pledge equipment, property, or other business assets. Approval criteria tend to be stricter, focusing on credit scores, business performance, and revenue stability.