My Business Credit Lines

Why should businesses obtain an unsecured business loan?

There are two types of loans. A secured business loan means that something is secured or pledged against an asset of the borrower’s. If the borrower defaults, this asset is sold to cover the costs of the loan. An unsecured business loan is a monetary loan that does not require any securities. With no collateral required to secure the loan, the borrower is generally only charged interest on the amount that is borrowed.

Unsecured business loans are available in many different financial packages, such as:

  • Credit Cards
  • Corporate Bonds
  • Personal Loans
  • Payday Loans

The amount of interest that is charged depends on the credit history of the borrower. Generally, unsecured business loans have higher interest rates because the lender is taking a great chance with not having any secured assets.

When applying for unsecured business loans, chances of receiving a lower interest rate increase when borrowers have excellent credit, have an organized and concise business plan and pay all bills promptly and on time. Longer-term loans will generally offer lower interest rates, which allow lenders to recoup more interest. Additionally, long-term loans may have additional fees if the loan is paid off early, so borrowers should read all fine print when obtaining an unsecured business loan.

Borrowers should consider applying to several different financial institutions before selecting one lender for an unsecured business loan, as interest rates and fees greatly vary.

Benefits of unsecured lines of credit include the following:

  • Having fast access to credit card funds and cash advances immediately;
  • The ability to make larger purchases with 0% APR for 12 months on credit card purchases;
  • Flexible repayment terms with various options depending upon financial institutions; and
  • Many credit cards also offer small business credit cards that boost personal credit ratings while helping small businesses establish and build business credit.

Businesses should always remember that with any debt, especially unsecured business loans, it is important to manage all debts responsibly and only use these types of loans in emergencies.

References:

http://www.sba.com/funding-a-business/unsecured-business-loans/

https://www.sba.gov/blogs/which-unsecured-business-lines-credit-are-best-your-business

My Business Credit Lines Agencies

My Business Credit Lines has over 500 Business Lenders around the United States that offer different types of business funding. We do all of the searching for you so you can have access to lenders in your area all in one place. Any of the lenders will be able to help get you the credit line you need to get your small business off on the right track to success.

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