Ask any business owner and they’ll tell you the same thing: running a company is hard work.
Even with meticulous planning and thorough forecasting, things often don’t go as planned. Maybe a promotion you thought was going to be a raging success doesn’t gain as much traction as you hoped. Maybe the economy tanks and your customers decide that yours is a product or service they could live without. Maybe a piece of equipment that’s just off-warranty all of a sudden decides to die on you, forcing you to replace it, even though you don’t have room in your budget.
When these things happen, many business owners are forced to take a good hard look at their companies’ finances to determine whether they have enough resources to continue growing their operations and serving their customers to the best of their abilities. After assessing their financials, a lot of them decide to look outside company walls to find the money they need to grow their businesses. In fact, 53 percent of small business owners have applied for loans over the past five years alone.
As they begin their search for the perfect financial vehicle for their companies, business owners quickly see they have a lot of options. They can apply for a loan from a lender approved by the Small Business Administration and they can seek financing through traditional banking institutions. Both options, however, are quite time-consuming and are unlikely to produce funding, as fewer and fewer loan applications are approved following the 2007-2008 financial collapse.
Knowing this, business owners are increasingly turning toward unsecured business loans available from non-bank lenders. Instead of having to march into the nearest bank to apply for a loan, business owners can search for unsecured loans online from the comfort of their own offices instead.
Like any other kind of financial vehicle, unsecured loans have their pros and cons. Let’s explore them right now.
Unlike most loan applications, business owners won’t have to waste much time applying for an unsecured business loan. Generally speaking, the application process can be wrapped up within 15 minutes. Once approved, money can be deposited in a business’ bank account within 24 hours.
Because these loans are unsecured, business owners don’t have to put up any collateral to receive financing. This means that in the event a business owner is unable to repay the loan on time, he or she won’t have to worry about giving their own property or equipment to the lender so it can recoup its costs.
While banks and SBA-approved lenders typically only approve loan applications submitted by businesses with near-perfect credit scores, companies can obtain unsecured loans even if they have poor credit. They just need to be able to generate revenue and prove they’ve been in business for at least a year.
Since lenders are willing to sign off on unsecured loans to business owners that have suboptimal credit scores without requiring them to put up any collateral, these financial instruments usually have higher interest rates than traditional bank loans. If you partner with the right non-bank lender, however, you will be aware of exactly how much money your business is expected to repay over the life of the loan; there shouldn’t be any surprises.
Just because your loan is unsecured, it doesn’t mean you’re completely off the hook with respect to repayment in the event your business goes under. Read the fine print before signing any contract to ensure you can stomach the specific terms of your unsecured loan.
Loans are liabilities. So if you take out a $500,000 unsecured loan, for example, you’re going to have to repay that amount. If for some reason you’re unable to pay back your loan in full, your business will almost certainly go under.
The last thing you want to do is take out a bigger loan than you need without having a plan as to how you’re going to invest the money and pay it back. By doing your due diligence and talking with a trusted lender, however, you should be able to figure out the precise financial instrument that works for your business’ specific situation.
With the right unsecured business loan at your disposal, you can take proactive steps to grow your business and provide even better service to your customers. To learn more about how you can get an unsecured loan online quickly, check this out. Better yet, apply for a loan today to see whether you qualify. Once approved, you can start growing your business right away!