Unsecured business loans allow a small business to obtain funding without putting up collateral. This is a viable option for many businesses who may not have anything of ‘value’ to put up as collateral e.g. expensive equipment or property. It is also a viable option for companies that may not wish to borrow much in the way of cash.
As with other types of loan out there, you will find that there are many lenders to choose from. Some of these lenders may be perfect for your business. Other lenders may not be quite as advantageouss. As a small business owner, it is your job to select a lender who is right for the business that you are operating. This blog post will provide you with details on how to do this.
Benefits of Unsecured Business Loans
There are various benefits to unsecured small business loans. You will be able to see a quick round up of the advantages on Chron. It, essentially, boils down to the following:
- Easier to obtain than traditional loans as you will not have to supply collateral.
- In the event of bankruptcy, unsecured loans tend to be ‘discharged’ whereas secured loans are typically not.
- The lender will not be able to seize your possessions should you be unable to pay the loan back.
Steps to Obtaining a Small Business Loan
Obtaining an unsecured loan for your small business will rest strongly on the way in which you manage your business and your finances. Before you apply for a small unsecured business loan, you should read the article at Investopedia. It goes in depth on what is expected of you when you apply for a loan. It can be summarised as follows:
- Ensure that your cash flow predictions are accurate. This will have a significant impact on whether you can obtain a loan or not.
- Ensure that your credit score is accurate. Try to boost it if possible. An excellent guide to follow can be found on inc.com.
- Put together a solid business plan
- Research potential lenders. We will give you information on how to select a lender in the next section.
What should you look for in an unsecured small business loan provider?
Your small business is unique. This means the short-term financing that you obtain for your business should be unique too. Therefore, it is important that you select a loan provider who can offer flexible loans. Capital Float can provide you with the following:
- Customised loan products. This way you will be able to tailor the loan package to suit your specific business.
- Flexible financing options. This includes invoice financing and e-commerce finance.
- Term finance where you have the ability to set the length of the short term business loan.
Small business lending on both invoices and e-commerce values are a great way to boost your chances of being successful with your loan application. Invoice financing allows you to borrow capital against the number of outstanding invoices that you currently have. E-commerce financing allows you to borrow money for your small business against your average total sales for your online company.
Unsecured business loans without collateral tend to be a bit ‘riskier’ for a lender. Also, you may find it slightly more difficult to obtain a loan with competitive interest rates. However, if you look at various websites, you may not find a satisfactory interest rate. But we here at Capital Float, provide you with competitive interest rates as low as 1.33{ed162fdde9fdc472551df9f31f04601345edf7e4eff6ea93114402690d8fa616}. Low interest rates mean that your business will be paying back ‘less’. This means paying back the loan will have a lower financial impact on the firm.
Applying for the loan
Once you have found somewhere to provide you with your unsecured loan for your business, it is important that you get the application process right. This will increase your chances of being selected. At Capital Float, we will process your application and provide you with the money that your small business needs within just three days. However, to ensure this, you will need to make sure that you have all of your paperwork in order.
Primary keyword: Unsecured business loan
LSI keywords:
Variants: unsecured small business loans, Small Business Loan, small business unsecured loan, unsecured small business loan provider
Antonyms and synonyms: collateral, traditional loans, secured loans, short term financing, financing options, Term finance, short term business loan
Sources:
http://smallbusiness.chron.com/advantages-disadvantages-unsecured-business-loan-34986.html
http://www.wahm.com/articles/the-pros-and-cons-of-unsecured-small-business-loans.html
http://www.inc.com/rohit-arora/eight-ways-to-raise-your-business-credit-score.html
https://www.nationalfunding.com/unsecured-business-loans/
http://www.comcapfactoring.com/blog/what-is-invoice-financing/
http://fitsmallbusiness.com/how-to-apply-for-an-sba-loan/
https://lendedu.com/blog/difference-between-secured-and-unsecured-loan/
