A loan that is not backed by specific collateral. Approval depends mainly on credit, cash flow, and financial strength, so pricing is usually higher than secured borrowing.
For example, a professional services firm takes a $50,000 unsecured loan based on strong bank statements and credit, without pledging equipment.
Why it matters: It requires no collateral, keeping assets free, but demands pristine credit and carries significantly higher interest rates.
.avif)
.svg){kind=small}