If you’re looking to get your business up and running, you’ll need to start with some capital to get the ball rolling. After all, you can’t really start a business from nothing – you need basic foundations to build upon. Even Facebook had hundreds of thousands of dollars of startup funding, despite the long-running idea that it began life in a college dorm room. Read on to find out more about unsecured business loans, and how long you might expect to wait before the funds finally arrive in your account from the time of your initial application for the funding.
What Is An Unsecured Business Loan?
An unsecured loan is one that doesn’t require a security deposit or anything to leverage your loan against. Put simply, you arrive at the bank or lender and apply for the loan, and they will decide whether or not to allow you to take out the loan based on your credit rating and other factors. This can include your income, your average expenditures, and since it’s based on your intention to build up a business, they may even take a look at your business plan. After all, taking on customers without business plans can be an incredibly risky venture for a bank or lending agency.
By completing a business plan and having contingencies in place in case you have any problems, you will give yourself the best possible chance of getting an unsecured business loan.
What Is The Difference To You?
One of the main differences between a secured and unsecured loan is the interest payments. Interest rates can be a little bit higher in the case of unsecured loans as the lender is taking on a higher level of risk. This is because they can’t stake a claim to any property in exchange for failure to pay off the loan. However, if you have any doubt at all that you might fall behind on payments, an unsecured loan comes at a financial cost rather than leading to the forfeiture of goods, including your property.
How Long Can It Take To Get An Unsecured Business Loan?
Whilst a secured business loan can take weeks to go through due to auditing of your property and ensuring that everything is of the value you say it is, an unsecured loan can go through in days, if not hours. This is because of the purely digital nature of the process, as no physical goods need to be assessed and compared. If you need a business loan quickly, there is no better way forward than getting an unsecured business loan. You can get back on your feet or get your initial capital in no time at all.