To understand what an unsecured business loan is, first learn about collateral. Collateral is something that a borrower pledges to the lender in order to assure the repayment of the loan. It can be any entity, asset or property possessed by the borrower and in a case where the borrower is unable to repay the loan, the lender can claim the collateral. Unsecured business loans are also referred to as non-collateral loans. As the name suggests, it is a financial funding solution a business does not need to provide collateral. Nevertheless, to show good faith, there are other criteria that the borrower must meet in order to be eligible to opt for an unsecured business loan. These usually include a good credit score, excellent financial history, a cash flow forecast, and if the lender has no right over the assets of the borrower, the income and credit requirements must be met.