The landscape of lending has been evolving and it has dramatically evolved into a more conducive environment for small business owners. At one time they had to go to regular sources with consequent delays or possibility of denial on the one hand and, on the other hand, loan sharks who made a bad situation worse. In recent times there has been a spurt in the availability of unsecured sources of funding. There is no need for businesses to fold up and die simply because cash, the lifeblood of commerce, could not be injected in time.
Unsecured funding is proving to be the best alternative to regular channels, even if it comes at a higher cost. What is an unsecured business funding and how does one go about obtaining it?
Most loans are offered by financial institutions against some collateral or a personal guarantee or mortgage of property or hypothecation of stocks. The Unsecured loan, unsecured business funding, an unsecured business line of credit are some of the terms used to describe this type of financing.
The chief attractions and characteristics are:
The Borrower does not need to furnish any personal guarantee, collateral or mortgage property or other assets. If he is a startup, the potential lender considers the viability of the project and invests funds, as venture capital and angel investors do, in return for the share of profit or share of business. Unsecured financing is even better for existing businesses since they retain full ownership and are sole arbiters of how to run and manage their business. The loan amount is disbursed based on turnover and demonstrable repayment capability.
A borrower need not furnish a solid reason or submit a project report or business proposal to be eligible for the unsecured finance. He asks for and gets the amount he needs. Interest rates may vary from fixed to variable types and from 0.5% p.a. to above. The Repayment period may be one year or two years and minimum loan amount is around $ 5000 while maximum may be $ 200000 or more. The loan may be a term loan, a short term loan with repayment schedule less than that of the term loan, or an overdraft facility or a line of credit.
One of the best features of unsecured finance is that it is available quickly. A prospective borrower submits only the minimum set of eligibility documents such as proof of ownership of business, proof of identity and residence and bank statements. He can do it online. The application is reviewed and approved within 48 hours and loan is credited to the bank account of borrower usually within 3 days.
The eligibility norms are simple for unsecured funding for business. One must have a running business, preferably with monthly revenues of $ 10000.
However, it is important to keep in mind the fees charged by lenders, the ongoing charges, and the interest rates. One must understand the difference between fixed and variable rate of interest and clarify upfront the fees the lender may charge, the exit fee and termination fee, if any. These can add up to a substantial amount if care is not exercised in selecting the right lender.
Apply now to water street capital. Just fill in the form online and initiate the process. For more details contact us, email us info@wscapnow.com or call us: +1-800-589-4161.
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