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Unsecured Business Loan vs Square Loans: Which Is Right for Your Business?

Compare unsecured business loans versus Square loans to find the fastest funding option matching your business needs.

⚡ Quick Verdict

An Unsecured Business Loan from SMB Capital Funding offers flexible terms and faster approval without collateral requirements, making it ideal for established businesses needing substantial capital quickly. Square Loans work best for retail and service businesses with consistent daily card processing, but come with higher daily repayment rates that can strain cash flow compared to SMB Capital's traditional monthly payment structure.

Side-by-Side Comparison

Feature Unsecured Business Loan Square Loans
Funding Amounts$10K – $500K$300 – $250K
Rates / CostStarting at 1.15x factorFixed fee (varies)
Term Length3 – 18 months18 months max
Funding SpeedSame day – 48 hoursNext day
Min. Credit Score550+ OKNo hard check
Collateral RequiredNoneNone
RepaymentDaily/weekly ACH% of Square sales

When to Choose Each Option

Choose Unsecured Business Loan when:

  • You need funding fast (same day possible)
  • Your credit score is below 640
  • You want to avoid collateral requirements
  • You need amounts from $10K up to $20M
  • You prefer a direct lender with no broker fees

Choose Square Loans when:

  • You already have an established relationship with Square Loans
  • Your business revenue primarily flows through their platform
  • You need amounts in the $300 – $250K range
  • You prefer their % of Square sales repayment structure
  • You've been declined elsewhere and want to explore all options

Why Businesses Choose SMB Capital Funding

SMB Capital Funding provides faster approval and funding timelines compared to Square Loans, while maintaining more flexible credit requirements that make it easier for business owners with less-than-perfect credit histories to qualify. As a direct lender offering up to $20M in capital, SMB Capital Funding eliminates broker intermediaries, giving you more control over the loan process and potentially better terms without third-party markups.

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Frequently Asked Questions

What is the difference between Unsecured Business Loan and Square Loans?
An Unsecured Business Loan is a general term for any loan that doesn't require collateral and can come from various lenders with different terms, rates, and requirements, while Square Loans are specifically offered by Square (the payment processing company) and are typically tied to your Square transaction history, making them easier to qualify for if you're a Square user but potentially more limited in loan amounts. If you're looking for flexible unsecured business financing options, SMB Capital Funding offers personalized loan solutions that can be faster to access than traditional banks while providing competitive rates tailore
How quickly can I get funded?
SMB Capital Funding offers same-day to 48-hour funding for most products. Simply apply online and our team will reach out within minutes.
Is there a minimum credit score?
Most of our working capital products are available with a 550+ credit score. We look at your overall business health, not just your credit score.
Do I need collateral?
Most of our short-term business funding products require no collateral. Equipment financing uses the equipment itself as collateral.

SMB Capital Funding is a direct lender offering working capital solutions to US-based small businesses. Funding amounts and terms vary based on business qualifications. This comparison is provided for informational purposes. All products subject to approval.