Unsecured Business Loans Are Increasing in Popularity and Here Are 5 Reasons Why

All businesses need small or moderate capital infusions at one time or another, and an unsecured loan is usually the best way to get this cash. In fact, business loans now total more than $500 billion a year, and more than 90 percent of these loans are for less than $100,000.

Business personal loans were almost unheard of just a few years ago while the world was in the grips of a serious recession. But those days are over now and there are lots of lenders who are ready to help your business. For starters, visit unsecuredfinanceaustralia.com.au. Then, take a look at some of the other available websites that can get your business the cash it needs with as little hassle as possible.

Fixed Interest Rate

An interest rate that never changes no matter what is a great advantage for a business. Not even “fixed rate” credit cards can offer than kind of security. Such loans may claim to have fixed rates, but they can still change at almost any time if the conditions are just right (or exactly wrong, depending on your perspective). Such payback terms make it easy to budget the minimum payment plus a little extra to either pay off the loan earlier or create a cushion.

Lower Interest Rate

Traditional lenders, like credit card companies, have large bureaucracies. That size means inefficiency, and borrowers wind up paying extra. But most unsecured lenders run very streamlined operations. So, they can charge lower interest rates. It’s not unusual to see rates in the high single digits, even for borrowers with less-than-perfect credit scores.

Fixed Repayment Term

Credit cards basically encourage minimum payments. These payments are easy to make, but they needlessly extend the loan repayment time, and that could mean thousands of dollars in additional interest charges. In contrast, most unsecured business loans have three or five year repayment terms. That’s long enough to make the payments manageable, yet short enough to encourage fiscal discipline. Ultimately, that discipline usually means a higher credit score which makes it even easier to borrow money when needed.

The Social Aspect

Many unsecured lenders, especially peer-to-peer lenders like Lending Tree, began as social media apps. They never lost that social feel. So, borrowers can search for lenders with whom they share a connection. For example, maybe borrower and lender are from the same hometown or attended the same school. That shared past makes the process even more seamless, and also usually makes the contract almost like an agreement between friends.

It’s Your Best Alternative

Most people leave secure, nine-to-five jobs when they begin their own businesses. But most banks do not like that kind of risk. They only like sure things, so many lenders only work with businesses which they know can repay the money. So, an unsecured business loan may be a startup’s only option. Without additional capital, your business may never make it off the drawing board. An unsecured business loan could literally bring your dreams to life.

To convert your idea into a moneymaking enterprise, you need additional capital. Or, perhaps you need a cash infusion to meet a sudden surge in demand. Whatever the requirement, an unsecured business loan can be the answer.

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