Unsecured Business Loans: The Smart Choice

There comes a time when every small business owner can use a helping hand in the finance department.  Whether you’re facing a cash flow shortage or you simply want to invest in an expansion project, you may need more money than you have in your bank account.

Companies with an uncertain future may find it difficult to obtain a favorable business loan; however successful small business owners will have many financing options at their disposal. If you fall into the latter category, let’s discuss the pros and cons of each lending option that will be available to you.

Your Lending Options:

unsecured business loan guide

Bank Loan: A bank loan is the most traditional loan type and often the one with the most favorable terms. However, bank loans are notoriously difficult to obtain, especially if you are looking for quick approval. Bank loans usually require you to submit a detailed business plan, financial documents and other types of paperwork before a decision can be made. Many companies, especially small business owners, will never qualify for a business loan applied for directly through the bank.

Alternative Loan: An alternative loan is different than a bank loan. It encompasses everything from peer-to-peer lending to short-term loans brokered through a bank. If you do a simple online search for “alternative business loans” you’ll find a lot of different options – some better than others.

One of the best alternative loan options you’ll find will be a short-term unsecured business loan that is brokered through a real bank. When you obtain a loan brokered through a real bank you skip the long application process and still receive many of the same benefits, such as interest that is tax deducible. Your interest rates may be higher, but because you’ll have fast access to cash it’s a tradeoff that many small business owners are willing to take. We’ll talk more about this option in the next section.

Cash Advance: Merchant cash advance companies are a lender of last resort. Companies with uncertain futures may turn to merchant cash advance companies because they have no alternative lending option at their disposal. Cash Advance companies are not regulated by the government and as such their terms are often predatory – APRs can range from 50% up to 200%!

Unsecured Business Loans (No Collateral Required):

small business lending options

The most attractive option for most small business owners looking to move quickly on a new project will be an unsecured business loan brokered through a real bank. “Unsecured” simply means that the business owner does not need to put up any collateral to receive the money. This is great news for business owners that don’t want to put their personal or business assets at risk. A loan broker, like ARF Financial, will back the loan in exchange for charging the business owner a slightly higher interest rate than could be obtained if dealing with the bank directly.

The biggest reason many small business owners opt for this choice is because they cannot obtain a bank loan any other way or the approval process from the bank is taking too long (it can take months to receive a decision). When you work with ARF Financial you can be approved for your bank loan within 48 hours and receive funding within 10 business days.

The Pros to an Unsecured Business Loan Through ARF Financial:

  • You don’t have to put up any collateral
  • You can be approved in as little as 48 hours
  • You don’t need a perfect credit score to get approved
  • The interest is tax deductible
  • Payments aren’t linked to credit card receipts like a cash advance

An unsecured loan for your business can be used for a whole range of different things, including;

  • Covering shortfalls in rent or salaries during slower periods
  • Buying extra stock in preparation for a busy period
  • Paying for refurbishment of premises
  • Taking advantage of growth opportunities
  • Funding natural growth – i.e. buying new machinery, extra transport

An unsecured loan such as those arranged by ARF Financial are ideal for small businesses. If you would like to learn more about unsecured business loans please give contact a loan consultant in your area who can answer any questions you have.