Small business owners are constantly facing financial pressure and battling the shifting tides of cash flow. When times are good, it can be fairly easy to take advantage of opportunities for growth and expansion. But when times are tough, you can fall behind the competition and lose out on opportunities to grow your business.
But it doesn’t have to be that way. You can manage your cash flow and get the funds you need for your expansion plans or day to day operations, no matter how your business is doing. Welcome to the world of small business funding with unsecured small business loans!
Secured vs. Unsecured Business Lending Explained
Many small business owners may not be entirely clear on the difference between a secured loan and an unsecured loan. Indeed, many people at large are unclear of the difference. It naturally seems like it has something to do with security, but that’s not quite the case.
These terms refer to collateral. Secured loans are secured with collateral that the borrower puts up for the lender, as a guarantee that they can repay the loan when it comes due. An unsecured loan doesn’t have any kind of collateral requirements, and uses credit score, revenue, time in business, and other factors in order to make a lending decision.
Secured loans typically offer lower interest rates, but present a significant risk for the borrower. If you do not generate enough funds to repay the loan on time, you can lose your collateral asset – a building, home, car, work equipment, and so on.
Secured loans are lower risk for lenders, but higher risk for borrowers. They also usually have fairly high credit score requirements associated with them. These kinds of loans are typically offered by banks or institutional lenders.
By contrast, unsecured business loans have somewhat higher interest rates, because the lender takes on a lot more risk. But they are much less risky for the borrower (the small business owner), and have a much lower set of lending requirements as a result.
No collateral requirements, access to credit even if you have a bad credit score, and a wide range of loan amounts, repayment options, and loan durations make unsecured business loans the ideal choice for many small businesses. They are most often available from non-bank lenders, such as BizFly Funding.
Unsecured small business loans are often faster to apply for and get approved for, easier to get approved for, faster to fund, and offer a lot less paperwork, hassle, and headaches than traditional secured loans.
Since unsecured business lending companies don’t have to jump through all of the same regulatory hurdles that a commercial bank does, they can decide what risk they are willing to take, and look at the “whole business” to determine creditworthiness, rather than rely solely on a credit score.
This means that most businesses, so long as they have been in business for a few month and have reasonable minimum monthly revenues, are able to qualify for an unsecured small business loan.
How Unsecured Business Loans Can Help Your Small Business Succeed
Unsecured business funding, in the form of small business loans, lines of credit, or other instruments, can offer a number of advantages to your small business. Indeed, unsecured small business loans are among the most popular form of credit and lending products that small businesses typically utilize today. Here are just some of the ways that unsecured business loans help small businesses to succeed:
- They provide the necessary capital to make purchases of materials, goods, services, equipment, property, etc.
- Unsecured small business loans allow businesses to take advantage of opportunities for growth and expansion of the business
- Small business funding allows for the payment of day to day expenses
- Variable, seasonal, or cyclical revenue businesses can benefit from unsecured business funding in the form of a merchant cash advance
- Advertising, marketing, hiring additional staff, and so on are all possible with unsecured small business loans
- You won’t risk losing your personal or business assets if things don’t pan out, in the way you would with a secured loan
- Unsecured loans can help you gain access to the capital that you need, when other avenues, such as secured loans and traditional lenders, have been closed off to you due to business risk, newness in the industry, or poor credit
Whether you need funds in the short term for purchase order financing, buying a piece of equipment, or seizing an opportunity, or over a longer term, like hiring new staff, expanding your operations, or offering new products or services, unsecured business loan products can be the ideal solution.
There are numerous kinds of loan products to choose from, depending on your particular needs, time period, and so on. Short term or small business loans, funding via a line of credit, debt consolidation loans, small business loans for women, and even merchant cash advances are all available as unsecured business financing options from BizFly Funding.
Unsecured Business Funding Options from BizFly Funding
BizFly Funding is a leader in small business funding and unsecured small business loan products. We’ve helped businesses with their financing needs in over 100 distinct business sectors or categories, all throughout the US. In the wake of the financial crisis of the late 2000s, credit became harder to come by for many small businesses.
Indeed, traditional lenders considered many small businesses – which statistically have an 80% failure rate – to be too high-risk. Alternative finance companies, such as BizFly Funding, have since stepped in to fill the market need for small business funding.
We offer outstanding customer service, a myriad of loan options and choices, competitive interest rates, fast approvals, fast funding, and have significant expertise in business lending.