Unsecured Finance - Business Financing
Whether you are starting a new business or wishing to expand an existing one, chances are you are going to require unsecured finance from a third party lender. If you have collateral - such as your home or business equipment - you can apply for a secured business loan, but if not then unsecured business loans are what you’ll be applying for. In this article we’ll be covering a few of the options available to you.
Low Doc Loans – Unsecured Finance
A good option for the self employed and those starting a new business, low doc loans allow you to apply for a loan without current financials. Traditional personal loans often require a lot of documentation to back up your application and have it approved. Not so with low doc loans. However, you may still be required to produce proof of income such as bank statements before a low doc loan can be approved. This is not always the case, as sometimes it can be hard to show proof of regular income when you are self employed, or your income is derived from investments. These types of loans carry more risk for lenders, so they may come with higher interest rates attached.
Small Business Loans
When it comes to unsecured finance business loans, self employed and small business owners will want to apply for an unsecured small business loan that is tailored to your needs. Small businesses are not generally looking to borrow millions, so applying for a small business loan makes sense. These loans will generally have a minimum amount you can borrow and a maximum. These limitations depend on the financier and vary from lender to lender. They come in both fixed and variable interest rates with terms up to 15 years.
If you really only require a small amount to get going or to expand, then using a credit card or applying for a small personal loan could be your best option.
Start Up Business loans
Financing can be tough for start ups. After all you haven’t yet established any business history. Or, if you are developing a product you wish to take to market, chances are you don’t yet have that product made.
So what are the options for start ups?
Some financial institutions specialise in providing start up capital, but generally at a higher interest rate. The Australian Government even runs a program, providing small start ups with funding to get their businesses off the ground. Applying for any form of government funding is usually a laborious task that takes forever and involves loads of paperwork, though.
Other options would be to target those listed above:
• Unsecured Low Doc Loans
• Unsecured Small Business Loans
• Unsecured Personal Loan
If you think your business idea might be attractive to investors and you don’t mind sharing the profits your company makes, then seeking out angel investment could be the way to go. You don’t have to be an enterprise of a large scale or with global scope. There are investors who are willing to invest money in small start ups.
The point is, just because you are a start up business/company without a track record, it doesn’t mean you have no options to secure finance. There are always options available when seeking unsecured business loans.