The unsecured small business loans provided by ebroker lenders can help you acquire
working capital from $5,000 – $250,000+ without providing colateral.
Let´s imagine the following scenario: the small business that you successfully started a couple of years ago recently received an opportunity to move into a new prime real estate location in the middle of the city. Both you and your business team feel that this new location would drastically increase your sales while allowing you the opportunity to increase your customer base and secure long-term stability.
The problem, unfortunately, is that the rent is more than twice what you are currently paying and you simply don´t have the available cash to make the down payment and secure the lease for one year.
You know that there are several other businesses wanting to move in so you need to act fast. When you head to your local bank, however, they begin to ask for a detailed business plan and a number of guarantees that can be used as collateral.
Given this scenario, what could our hypothetical small business owner do? Unsecured business loans are perhaps the best option for small businesses that need an influx of capital quickly and who do not have the collateral for a loan. Below, we will explain how unsecured business loans work and describe what your business should be looking for.
There are hundreds of lenders offering short-term loans in Australia. However, the vast majority of these lending agencies will ask your business for some sort of security or collateral before they sign over the loan. Unsecured business loan lenders, on the other hand, will offer your business the money you need without asking for any sort of collateral or security.
These types of loans are usually easy to access and you can research lenders online without ever having to leave the office to head to the bank. In situations, like the one described above, where a small business is in urgent need of funds, unsecured business loans will most likely be the best option.
Also, if your business does not have assets or financial security to be able to offer substantial security or collateral, you will most likely not be able to apply for a secured loan offered by the major banks. Another advantage of unsecured loans is that in almost all cases, you are free to use these loans in any way you choose.
Secured loans often times have limitations on how you can use the money. But unsecured business loans can be used for any business purpose, including purchasing inventory or new equipment, funding marketing campaigns, improving your overall cash flow, financing business expansions, or any other type of unexpected business expense that may arise.
Even if you already have an existing secured business loan with another lender, you can still apply for unsecured loans. Depending on your particular case, you can often times negotiate repayment options on an unsecured business startup loan that will work best for your company.
On the down side, unsecured business loans rates are usually much higher than what you could find through a secured loan. Since the lender is theoretically taking on more risk by loaning your business funds without any sort of collateral, they generally charge higher interest rates
Some lenders might include obscure terms, rates, conditions, and hidden fees in the loan structure. For example interest rates might skyrocket if you were to fall behind on payment. It is important to make sure that you read through all of the fine print on any unsecured startup business loans that you apply for.
Repayments may also vary since withdrawals can be made daily, weekly, or monthly and can be broken down into small amounts. This type of small business loan usually runs for a term of between three months to one year.
Other factors to consider are signing a personal guarantee. This may be the case with unsecured business loans. While this condition certainly shifts a good deal of responsibility onto the individual shoulders of the business owner, for solid businesses that have a good business plan and a solid investment opportunity, this should be a risk well worth taking.
Due to these risks we only recommend unsecured small business loans as short term business loans for cash-flow gaps since this type of loan can be expensive if held for a longer term.
As with any financial decision you take, it definitely pays to do your research on the options that are available to you. Because there are so many lenders out there all offering different loan products, it can seem overwhelming to try to scope the entire variety of loan options. Ebroker is the best resource for researching the right business loan.
You specific business financing needs will be different from others. You can spend time researching each company online or in person. This will help you learn all the options available and help you understand how to get approved. For short term loans Australia has a wide variety of options so this will take some time. And there are very few business owners that actually have time to do this.
Ebroker has already done this work for you and built an application to help you narrow it down to the right lenders.
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