Today, there are an estimated 25 to 27 million small businesses in the United States, and between 60 and 80% of the U.S. workforce works for these businesses. Because of how vital these companies are to the economy, they need to be able to stay operating to help provide employment opportunities. As a result, they may need to look for quick funding to stay afloat.
One such source of this funding is to use unsecured business loans. While these loans may sound complicated, they may actually be of use to many business owners. Here are three fast facts that you should know when it comes to getting an unsecured loan.
Unsecured business loans aren’t like other loans you might be used to.
First, what are unsecured business loans? These types of loans are called unsecured because they do not require any type of collateral. In other words, they’re not secured by property, like a mortgage or a car loan; instead, they are given to borrowers with the expectation of repayment within a certain period. They are sometimes referred to as working capital loans for businesses because lenders provide businesses with the funds they need to keep operating.
Just because it’s unsecured doesn’t mean it doesn’t function like a regular loan.
If you’re applying for small business loans, you’ll still go through the same process you may have gone through for your startup loan. For one thing, your credit score will be looked at and will determine whether or not you qualify for the loan. Lenders of unsecured loans will typically look for higher credit scores, but often any who will be able to pay back the loan will qualify. Also, just because it goes through a private lender doesn’t mean it won’t show up on a credit report. No matter the amount you borrow, the loan will still be reported to the big three credit bureaus: Equifax, Experian, TransUnion.
Repayment schedules may start sooner than they would with other loans.
Most often, unsecured business funding doesn’t take a rigorous application process, so the funds are typically available fairly quickly. Once you’ve begun to earn the money back, though, your repayment will begin. This can take place over the course of a year if need be. In some cases, you may make daily repayments, but a schedule can be determined by your lender.
Have more questions about how to find the right small business lending options for your business? Make sure you talk to a lender today to get the cash you need.
