If you need to grow your business you should definitely think carefully about a secured business loan. In time, you’ll need additional cash to grow, but sometimes money isn’t accessible as you’d like. In fact those moments are vital for your business, because some of your accomplishments will completely depend on the need to increase your resources. This is when the question of secured loans falls within the spotlight.
Taking an unsecured loan could be a disaster; their very high in interest, and very hard to get these days as there is no collateral. Even if your business has perfect credit profile, lenders do not offer them that easily anymore. Take a look at some of the advantages of applying for a secured loan, over the unsecured option.
The secured option requires that you equity (usually the building that your business owns) a section of land, or even funds. This security will greatly increase the chance of you getting the loan due to the lender feeling less risk. You can choose private lenders (such as Apple Loans), or high street banks. Although I would not always advise choosing banks, because they can be very slow, and it takes months for them to even check your profile.
Consider the reality that because your loan is secured, interest rate can be much lower.
However unsecured loans are a heavy risk for any lender. That’s why the APR is higher.
Now, let’s talk about poor credit profiles for a bit. If your one of the millions who a bad credit score, you can forget being accepted for an unsecured loan. It’s hard enough to get them with a top credit score, but its virtually impossible to get them with a poor score.
If you decide to secure a loan using collateral, the APR will be lowered drastically, even if you have a poor credit score to start with. The companies tend to forget the bad credits scores, if you’re willing to secure the funds that there investing.
One other advantage is that if you get accepted, not only is the APR going to be lower, but they will often give a longer payment period. This is because even though you pay more at the end (because of the interest that piles up over the term), your monthly repayments will be much easier to manage. BUT, if you are smart with your finances you might not even notice this take effect.
Be careful, everything that we have talked about so far depends on the growth of your business. You shouldn’t take this lightly, if your business does not grow for any unforeseen reason, your property might be at risk. In the end your business may crumble, and you might lose the property due to the loan defaulting.
Why should you even consider getting a cash injection? Well, there are a few simple reasons. You may want to buy more land, or pay for upcoming business expenses that allow you to expand, or even if your want to branch out. People are starting to appreciate that these days a good business strategy is to actually branch out and diversify, sometimes it cant hurt to take a educated guess. Secured business loans give you this opportunity without much risk (if they know how to handle the payments).
Finally, these loan options are easy to apply for. As I’ve already mentioned above, you should avoid banks under any circumstance, however there are lots of good online companies out there which will help you reach your goal.