Unsecured loans are loans that are not collateralized with any assets. They are loans that are made at a much higher risk to the lender. Thus, to mitigate that risk unsecured business loan rates are much higher than the rates of those that are “secured” with collateral. These loans tend to get a very bad rap on both sides because they are risky for the lender and expensive for the borrower. If you have or are thinking about taking out an unsecured loan however, following are three reason why that may not be as bad as it seems.
It Will Get You Where You are Going
No one really wants an old beat up car. It may guzzle gas, and it may need an extra tune up now and then. Besides that, it doesn’t look nice. However, if it gets you to where you are going, can you really complain that much if it is all you can get. It is better than no car at all. In some cases, start up unsecured business loans are all that are available in your situation, and they are better than no loan at all.
No Collateral Means No Chains
If you have assets that are not tied up as collateral, they can work for you in other ways. You can sell them or use them to secure another loan if you need to in the future. If there is equity in them that can be tapped as well.
They Still Help Build Credit
If you handle them responsibly, as you should any loan, unsecured business finance options help build credit the same as any other kind of financing. Make your payments on time, call if there is a problem making payments, and keep an eye on your credit report. If everything else is in order you should see you credit score climbing and may even be able to refinance at a lower rate in the future.
Whether you are in the market for unsecured business financing, secured start up loans, a business line of credit, or any other type of financing for your small business Biz2Credit can help. Our network of over 1,300 lenders includes unsecured business loan lenders as well as many other types that are just waiting to help you get your dream off the ground. Visit Biz2Credit today for more information.