Finance & Share Markets

Can You Get A Business Loan Without Collateral? Get The Tips Here

Several bright business ideas ended up in the dustbin of history because they lacked the financial bite to push them to the next level. Getting collateral for loans is tight because lenders do not want to take a big risk; we shall be looking at ways to get collateral-free loans.

Self Secured Loans

We are going to start on this bright note. If for instance, you want to take a mortgage to buy a loan, the homeowner will stand on your behalf as the collateral in other to beat other competitors to the sale. In the same way, if you want to take a loan for the purchase of equipment financing and inventory financing, the items will act as collateral on the loan. That way you will end up beating the headache of collateral. Another area of getting a loan without collateral is through invoice financing. The loan is based on the strength of your current invoice. Your equipment, inventory, and invoice serve as the collateral on such loans which the lender can fall back on in case there is a default in payment.

Personal Guarantee

Another area where you can get the loan for your small business without passing through the hurdle of collateral is through Personal Guarantee. Here the lender will be required to sign a personal guarantee as part of the agreement. How does it work? There is nothing to lose here in as much as the business is doing fine. In the unfortunate event of bad business, the lender will have access to your personal assets outside the line of business. Your personal assets such as car or house can be seized if you fail to pay the loan back. The risk is not more than that; it is a good way of getting a quick loan without collateral.

Online Term Loans

You can get both long term and short term loans here with differing terms of agreements. The interests on these loans are very high and the payment period is long- some can take as long as five years for some the lenders. Above every other thing, make sure you fully understand the terms of payments before signing the dotted lines of the contract. If you decide to opt for a short term loan, then you have to look at your capacity to repay back on a daily or weekly basis. If you can cope with the terms of payment, both long term and short term Online Term Loans are where to be to get loans for business funding without collateral.

Merchant Cash Advances

Another smart way of getting loans for business without the bottlenecks that come with collateral is through Merchant Cash Advances. The beauty of the system here lies with the fact that you will pay more while business is doing fine and pay less where the sales are not encouraging. This is a flexible arrangement that is good for the health of any business going by the fact that there are great uncertainties in the business world. When you sign the bond, the financing company is buying over a portion of your future sales. However, you are going to pay more in terms of interest rates at the end of the day; this is a factor that you have to bear in mind from the onset.

Business Credit Cards

This is yet another way to finance your business without recourse to the rituals that come with collateral. Though every business owner has a strong credit card, there is a particular card that will serve a useful purpose here. If you are in possession of a 0% intro APR card, then you can go all out to enjoy the benefits of the business loan without any form of collateral. You will be in a position of getting an interest free loan for a period that extends up to about 12 months. When the closing days are approaching, it is strongly advised that you pay back the balance before the interests begin to set in. For the brightest and best options in 0% intro APR card; you can trust the option that is obtained through Amex Blue Business Plus. You are going to get a long 0% APR period and other important benefits.

SBA Loans

This is yet another area that business owners can rely on to get the results that matter at the end of the day. Though this lender might require collateral, it is on record that they will not turn back a qualified borrower on account of lack of collateral. SBA 7(a) loan is the most popular and for loans under $25,000, no collateral will be demanded.

Conclusion

The options mentioned above are smart ways to get the loan for your business without the burden of collateral. Make sure you understand the terms pretty well before you sign the dotted lines to avoid the big issues. The business loans are there, go out for the one that fits into your business plans.