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7 Signs an Unsecured Business Loan Would be the Best Choice for Your Company

There are many types of loan available for businesses looking for a quick influx of cash.

One of these options is an unsecured business loan.

This is an option that offers many advantages, such as flexibility and lower risk. However, whether an unsecured business loan is a good choice for you and your company depends on your current situation and specific needs.

Here at Smart Funding Solutions, we regularly help businesses find great unsecured loans that work for them, and we could do the same for you.

In this guide, we’re going to run through seven key signs that an unsecured business loan would suit your company, and if they sound familiar, why not apply for one today?

Let’s take a look.

What is an Unsecured Business Loan?

An unsecured business loan allows you to borrow money from a lender without the need to provide collateral and assets as security.

Instead of using assets to achieve the loan (as you do with secured loans) approval in this method is based on your credit score, financial history, and many other factors.

This can make an unsecured loan a great option for many business, and here are seven signs it could be you.

man using equipment to work

7 Signs an Unsecured Business Loan Is the Right Choice

You Have No Collateral

As this loan doesn’t need collateral, this is a great option for people who simply can’t supply any.

There are several reasons this may be you. Maybe your equipment is far too valuable to your company to risk losing it. Or maybe you actually don’t have any equipment that you can put forward at all.

An unsecured loan will mean that doesn’t matter, and that other factors will come into play when lenders are deciding whether to lend you the funds.

For small businesses and sole traders who may not have the funds to risk or own expensive equipment, this is a good option to get a boost to your bank balance without having to use assets as collateral.

You Need Funds Quickly

There are many instances when a quick business loan is paramount.

If you have an emergency and need financing to fix it and keep your business running, or if a great opportunity has appeared that you need to take within the week, for example.

If this sounds familiar, then an unsecured business loan is a good option for you.

There is no need for collateral to be assessed which can slow things down, and approval can often be given much quicker than a secured loan.

Rather than wait and potentially risk losing revenue, customers, and golden opportunities, an unsecured business loan can provide you with funds in a matter of days, allowing you to act quickly.

You Don’t Like Risks

Imagine you are a sole trader who relies on a vital piece of equipment to perform their job properly. If you use that as part of an unsecured loan, then you are at risk of losing it.

For risk-averse businesses, or businesses with too much to lose, an unsecured loan eliminates any chance of losing these valuable pieces of equipment as they don’t require collateral.

This can provide peace of mind that personal and business assets are safe if the worst-case scenario were to come true.

You Have a Great Credit Score

A credit score can play a big part in getting a business loan, and if you can boast a strong number, then you should have no problem getting approved in a quick time for an unsecured business loan.

Not only will you be able to access the funds quickly, but you will also be in a great position to negotiate, allowing you to ask for more favourable terms and lower interest rates.

By showcasing your credit score and a strong history of repayments, you are supplying everything that is needed for an unsecured loan to get approval, so this makes it a good option.

You Only Need Funding for the Short-Term

Unsecured business loans are often provided with shorter payment terms. Due to the nature of this type of loan, it can be seen by many as a quick fix, and this is shown in terms of length.

This makes it a good choice for businesses with short-term financing needs.

Maybe there is a specific project that you need funds for that will last just a few months, or maybe you are experiencing seasonal fluctuations and just need some finances to get you through a particular season.

An unsecured business loan would be suitable for both of these and can help you through a hard time without tying you down to lengthy payment structures.

You Have Varying Revenue Levels

Businesses that may not have a steady revenue stream throughout the year can benefit greatly from unsecured business loans.

In many cases with an unsecured business loan, such as merchant cash advances, repayment terms can align themselves with cash flow, which means that the more you earn, the more you pay back.

This means if you are expecting a downturn in sales, you can use the funds gained from your loan while sales are low, and then pay it back when revenue increases and you can afford larger payments.

This flexibility is a big benefit to many businesses and is the perfect way to cover any gaps you may be seeing.

You Don’t Need to Borrow Huge Amounts

A large loan can feel like a big weight on a business owner’s shoulders.

The key is to only borrow the amount of money that you need and try not to lend too much.

Unsecured loans are generally available in smaller amounts when compared to secured loans.

If your needs are fairly modest, and you don’t want the burden of a large financial sum being owed on your business, this makes an unsecured loan a great option.

For small businesses who may just need an influx of cash to get them through a tricky time, or simply buy one piece of equipment, then this is the perfect choice for you.

business owner typing on laptop in front of yachts

Unsecured Business Loans from Smart Funding Solutions

These are seven reasons why an unsecured business loan would be ideal for a business. If you think a few sounds familiar, or if all of them do, then why not apply for an unsecured loan today?

Our team here at Smart Funding Solutions are experts in locating the best loan possible for a wide range of businesses, so if you want to know more, then get in touch today.

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