Understanding Unsecured Business Funding vs. Traditional Financing

Unsecured business funding—also known as non-collateralized financing—works quite differently from the traditional loans you might get from a bank, such as a mortgage.

With more conventional lending options like SBA loans, term loans, or business lines of credit, banks require strong personal credit, consistent revenue, and extensive documentation. These types of funding can take anywhere from 4 to 16 weeks to close, depending on the lender and your qualifications.

A common question we hear is: “What’s the interest rate?” That’s understandable—most consumers are familiar with mortgage or auto loan rates. A 6.5% mortgage rate may sound great, but over a 30-year term, you often end up paying more than double the home’s purchase price. That long-term cost is important to keep in mind.

In the world of short-term, unsecured business funding, we talk about factor rates instead of interest rates. A factor rate typically ranges from 1.10 to 1.60, which means if you borrow $10,000 at a 1.3 factor rate, you’ll repay $13,000. Repayment is usually made via daily or weekly automatic payments, and the exact terms depend on your business’s financial profile.

Let’s look at a recent example: I helped a client secure $15,000 in funding with a payback amount of just over $21,000. The term was around 155 days with weekly payments of approximately $940. I could have gotten her $25,000 or even $30,000, but shorter terms would have raised her weekly payments significantly. After discussing her business needs, we prioritized a more manageable payment structure over a larger funding amount.

That’s one of the advantages of working with us—we syndicate across multiple platforms and work with a wide network of funding partners. That gives us the flexibility to tailor offers to your situation.

Now, it's true—short-term funding can be more expensive than traditional loans. But remember, there's no collateral involved. With a mortgage, if you default, the lender takes your home. With unsecured business funding, the lender has to go through a legal process to recover losses, which increases their risk—and that’s reflected in the cost of capital.

The funding amount you're eligible for is based primarily on your monthly revenue, and the terms and rates depend on your credit, business history, and overall risk profile. If your business has strong cash flow, solid credit, and no defaults or major issues like frequent overdrafts, you may qualify for longer terms—sometimes up to 9 to 18 months.

At Fast Funds Group, we keep things simple. No long underwriting process. We’re upfront about what we can do. As a family-owned private equity firm based in Boca Raton, Florida, we take pride in working closely with our clients to get them the funding they need—on terms that make sense.

If you’re curious about what you might qualify for, just fill out the form below. Let’s find the best solution for your business together.

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