Unsecured Loans · 2 min read
How Real Estate Investors Use Unsecured Business Loans
How real estate investors use unsecured business loans for down payments, rehab overruns, holding costs and marketing, plus the trade-offs.
This guide is part of our Unsecured Business Loans hub.
Property loans rarely cover 100% of a deal. Unsecured business loans give investors capital that is not tied to a specific property, which makes them useful for filling gaps.
Common uses
- Down payment and closing costs: covering part of the cash a hard money lender requires, where the lender allows it.
- Rehab overruns: funding surprises before the next rehab draw.
- Holding costs: interest, taxes, insurance and utilities while a property is renovated or listed.
- Marketing and acquisitions: direct mail, lead generation and earnest money deposits.
- Operations: payroll, software and equipment for a growing investing business.
Why investors like them
- No appraisal or lien on a property
- Decisions are often faster than on property loans
- Funds can be used across multiple projects
- Keeps properties free of second liens
Trade-offs
- Rates are usually higher than secured loans.
- Terms are shorter, so payments are larger.
- Most require a personal guarantee.
- Lenders qualify the business and owner, not the property. See how to qualify.
Check your property lender first
Some hard money and bridge lenders restrict borrowed down payments or require disclosure of other debt. Confirm the rules before you layer financing.
Choosing the right product
A line of credit suits recurring, unpredictable needs. A term loan suits a single known expense. Compare them in business line of credit vs. term loan.
Related guides
Explore the full hub: Unsecured Business Loans. Other financing: Fix and Flip & Hard Money Loans · DSCR & Long-Term Rental Loans · Commercial Real Estate Loans · Trust Deed Investing.
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Terms, leverage and timelines vary by lender, property and borrower qualifications. This article is general information, not financial, legal or investment advice, and not a commitment to lend.