Need Business Funds? Consider Unsecured Business Loans
In a nutshell, secured business loans are simply, small business capital for your business that won’t require the borrower to put a collateral on the line for the loan. As a borrower, you won’t risk putting valuable assets on the line for financing, however, most lenders make up for their increased risk by charging higher interest rates or requiring personal guarantees. You can compare unsecured loans to see how it differs from a traditional one.
In contrast to unsecured business loans, secured business loans will need collaterals, which may not sit with most business owners. If you’re planning to start a new business venture or you want to upgrade an existing one, you should consider third-party financing who offer an unsecured business loan. In this article, we’ll focus on unsecured business loans.
Third-party lenders who provide unsecured business loans don’t require borrowers to pledge any collateral to obtain the loan. However, you need to meet income and credit requirements.
Advantages of Unsecured business loans
· Faster application and fewer requirements
Most alternative lenders are 100% online and automated. They do this by linking your business bank account and other data sources to assess your application. This normally takes one business day to process. Compare this to traditional business loans, most of which require income statements, tax records, personal assets and liabilities, details of how the funds will be used, collaterals, etc. The time benefit alone is amazing.
As said above, alternative lenders can process unsecured business loans instantly based on access to real-time business information. You can qualify for up $100K straightaway. For traditional business loans, it usually takes up to several months.
· Less fees
With unsecured loans, there’s also no upfront fees nor sign up charges to be paid. You’ll only pay for what you use, and if you repay early, you save more money. Traditional business loans often have application and establishment fees, plus you need account keeping and early repayment fees.
· Loan flexibility
Alternative lenders allow businesses to loan as little as $1K at a time or the whole amount you’ve been offered after business assessment and approval. You pay only what you’ll use. In traditional business loans, you receive one lump sum, all of which is interest bearing.
· Better customer service experience
Most alternative lenders will have an in-house, dedicated local customer support while traditional business lenders utilise call centre based customer service team, which are often outsourced. Some also use trending business tools to improve their work process
Of course, defaulting on any type of business, loan, even if it’s through an unsecured business loan, will affect your credit rating. Though a court can discharge an unsecured loan in bankruptcy, it cannot discharge if the creditor has already acquired a judgment against you.
As you can see from the above advantages, unsecured business loans, particularly those provided by third-party/alternative lenders offer better service for borrowers who wish to either start a new business or looking to expand. Try to compare unsecured business loans here with traditional providers to see why it can be the better choice for your business goals.