Unless you have experience managing a business, it can be difficult to secure funding when you want to start your own company. Traditional lenders like banks will not only consider the business’ potential for success based on the type of venture it is, but your expertise as well. Fortunately, you may be able to secure funding from companies providing unsecured loans and receive these five benefits.
No Risk to Assets
By applying for a business loan through a lender offering unsecured loans, you don’t need to put your house or other assets at risk. They don’t need to be used as collateral to help secure the loan, so they will never be at risk if you default on it. Since your home will not be at risk, you don’t need to worry about what happens to your family if the business fails.
When you apply for a business loan through a bank, it can take several days, if not weeks, to get a decision. Filling out the loan application through traditional lenders can be time consuming as well. However, the application and decision process for unsecured business loans is much faster, so you may have an answer within a few minutes if you’re seeking a loan pre-approval.
Various Loan Amounts Available
With an unsecured loan, you can borrow as little as a thousand dollars or as much as $250,000. The money can be used to buy new equipment for your business or to start it from scratch. When you get an unsecured loan, you don’t need to account for every penny on the application as you do when asking for a loan from a traditional lender.
Fixed Interest Rate
Many traditional lenders offer business loans at variable interest rates, so if the rate increases, so do your loan repayments. Fortunately, when borrowing money from a lender who offers unsecured loans, the interest is locked in and doesn’t change. This means your loan repayment amount will not change, so it is easier to budget for your repayments.
Shaky Credit Histories Okay
You don’t need a perfect credit rating when borrowing money from a non-traditional lender. Almost everyone has made financial mistakes and some business owners have had failed businesses in the past. Fortunately, credit histories are only one piece of information needed when trying to borrow a large amount of money, so a shaky credit history doesn’t mean your application will automatically be rejected.
If you want to go into business for yourself or if you need extra money to buy a piece of equipment, a good way to quickly get money is applying for an unsecured loan. The application and approval process is quick, so you can have the money within just a few days.