An Unsecured Business Loan is a type of financing that allows businesses to borrow funds without the need for collateral. These loans are granted based on the borrower’s creditworthiness, financial stability, and business performance. They are particularly useful for businesses that lack significant assets or wish to avoid the risk of pledging property or equipment. Since there is no collateral backing the loan, lenders assume greater risk, often resulting in higher interest rates and stricter eligibility criteria.