A Guide to Unsecured Business Loans: Tips for Success
To a person who is unfamiliar with the concept, an unsecured business loan may seem intimidating. However, it is actually a simple process that can help increase cash flow for businesses. When your company needs fast access to collateral, an unsecured business loan can be your solution. You will not be tied down with lengthy wait times or be denied for insufficient collateral. By working with Factor Finders, you can quickly be connected with a lender and start the process of securing working capital.
What is an Unsecured Business Loan?
An unsecured business loan is slightly different from a traditional secured loan. You do not need other assets to qualify for an unsecured business loan. There is a good chance you have already interacted with an unsecured loan as credit cards and student loans are often unsecured lending. If you need cash now, but your business does not have enough collateral to qualify for traditional lending, an unsecured business loan is the way to go. Qualified borrowers can receive up to 90% of their gross monthly sales. You can use these funds to grow your business, rejuvenate your cash flow or purchase needed equipment. Following are five tips for a successful unsecured business loan process.
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#1 Find the Right Lender
You want a lender that understands your needs and the challenges faced by your industry. Working with the right lender can make a big difference to your unsecured business loan experience. With help from Factor Finders, you do not need to spend the extra time researching lenders. As a broker, it is our job to find you the perfect lender. We have a vast network of lenders for a diverse group of industries. You will be introduced to a lender who has your best interests in mind.
#2 Assess Your Business Needs
After locating a lender, you should assess your business needs. By determining which areas you need funds, you can have a better idea of how much money you need to fund. This can help your lender decide which type of unsecured business loan is right for you. While you are assessing your needs, it is also a good time to gather the necessary documentation, including any financial statements, tax documents and other records requested by your lender to demonstrate the stability of your business.
#3 Create a Business Plan
Once you have gathered your records, you can create a business plan. A comprehensive business plan clearly outlines your goals, financial projections and plans for the funds. Lenders like to see organization and how the funds will be used. By creating a business plan, it will help the funding process move quickly and smoothly.
#4 Receive Fast Funding
Many business owners use unsecured business loans when they need fast access to cash. If your business is experiencing a drop in working capital, an unsecured business loan can help get through this time. Receiving payment for an unsecured business loan is typically faster than a traditional bank loan. Instead of struggling to make ends meet or putting off necessary purchases, utilize an unsecured business loan to get access to working capital.
#5 Apply Funds to Your Business Plan
Now that you have secured your funds, you can put them to use. Some uses for unsecured business loan funds are paying off debt, purchasing new equipment or hiring more staff. An unsecured business loan can be your ticket to a stronger financial situation and a more robust business. If you remain stagnate, your business can continue to struggle. An unsecured business loan gives you the freedom to pursue growth and accomplish your business goals.
Unsecured Business Loan Advantages
There are several advantages to financing with an unsecured business loan. You can experience quicker approval times with an unsecured loan, which can come within 48 hours after submitting paperwork. If you frequently have clients that take weeks to pay their outstanding invoices, an unsecured business loan can give you access to the funds you need for uninterrupted business operation. An unsecured loan is the ideal choice for borrowers who are looking for a single transaction instead of an ongoing line of credit. Unlike a traditional secured loan, there is unlimited funding potential with an unsecured loan. You can apply to extend your credit line as your sales increase.
Contact Factor Finders
Boost your access to working capital with an unsecured business loan. Grow your business even without collateral. Factor Finders can help you with the process. Contact us today and we will respond within minutes.