The Secret You May Not Know About Unsecured Business Loans
More than three quarters of all small businesses will require loans in order to expand and sustain business growth, so especially in the early years, unsecured business loans can be a great option. What’s the secret to these unsecured business loans? The real secret is simply that these kinds of loans are indeed out there – if you look hard enough. While the vast majority of traditional lenders will require some form of hard collateral, a dedicated search will turn up an alternative lender willing to provide your small business with the funding you desperately need.
Types of unsecured business loans
There are two main types of unsecured business loans which an alternative lender might provide for you, online term loans and merchant cash advances (MCA’s). In an MCA loan, some percentage of your future credit card sales are paid every day to the lender, until both the original loan amount and a loan fee have been paid off.
An online term loan is similar to a traditional bank loan in that you borrow a fixed amount of money, and it is paid off over a pre-determined number of months at a fixed interest rate percentage. The difference between this unsecured loan and a bank loan is that the lender may want to apply a ‘blanket’ lien against your business as a whole to ensure repayment of the loan amount. When considering an online term loan, you should pay attention to four factors which will have a huge impact on repayment: interest rates, eligibility factors, fees, and repayment schedules.
Find the right alternative lender for your business
As previously mentioned, unsecured business loans are not always easy to find, and traditional lending institutions simply cannot offer these kinds of loans, so it will be necessary to seriously search for the right alternative lender for your business. When you don’t have a lot in the way of business assets which might be used as collateral, unsecured business loans from a solid alternative lender can provide a very real possibility to secure the funding your small business needs.