What Are Secured Business Loans?
Secured business loans are usually presented by lenders to businesses who require working capital to start a new business, for the expansion of previously existing business or pay for operational expenses of the business. Secured business loan requires collateral that reduces the risk for the lender, allowing them to offer a lower interest rate that can be paid back easily.
What Companies Utilize Secured Loans?
Almost all types of businesses could substantially benefit from secured business loans, but, businesses that have mutual funds, inventory, automobiles, equipments, land, debts receivable, or buildings to place as collateral will have considerably lower payments and substantially longer repayment terms than unsecured loans.
Why Do You Need A Secured Loan?
Mainly, a secured business loan is a security tool that lenders offer to businesses that are just starting or for previously established businesses that are looking for expansion. A secured business loan requires collateral as this is the most important component of this type of funding because it reduces the risk for the lender; the banking institutions also feel comfort because in case you default on the loan amount, they can recover the loss by claiming the asset you place as collateral. And with secured loans, the interest rate will be lower as the amount you borrow is secured by your provided collateral.
What Can Be Used As Collateral?
Secured business loans require a borrower to provide an asset as collateral should the borrower be unable to pay back the borrowed amount. Many choose to offer vehicle or other business assets as collateral against secured business loan; however business equipments, plants, or property are also collateral options.
How Secured Business Loan Helps?
One of the advantages of getting a secured business loan is the low interest rate. As the secured business loans are less risky for the lenders, the lender is more prone to give you the loan at lowest interest rate that is good to your account. That being said, in case you fail to pay back the borrowed amount on the set time, you can lose your valuables that you pledge as collateral against the loan amount.
If you have resources and you’re ready to gamble with and know that you will pay the loan back on time, a secured business loan is an amazing funding option because you’ll get the smallest amount of interest in this process.
What Are The Credit Requirements?
Good credit rating in secured business loan is indeed in your favor; however it isn’t as essential as in unsecured business loans. Because you pledge collateral in secured business loans, your lender will care less about your credit rating. That is a remarkable benefit for new businesses and businesses that haven’t had the time to build up the business credit that is imperative for lenders when getting business loans.
Alternative To Secured Business Loan – MCA
Merchant cash advance can assist you with your business financial requirements without requiring any collateral or monotonous paperwork rather than putting your valuable assets at risk. The cash advance facility eliminates most of the annoyance and offers decent and comparatively low interest rate. The only requirement is you need to have a merchant account and your sales volume substantiates the cash advance amount. In case you are looking for a practical or secure way to make essential business purchases, or want to meet short-term working capital requirements, the merchant cash advance is great business funding solution.
How It Helps Your Business?
Using secured loan for business is an outstanding way to guarantee a lower rate of interest, an extended repayment term, and also gives you the opportunity to build your credit and form a rapport between lender and business.
With this type of financing, you can take the advantage of business expansion opportunities; take part in profitable advertising programs and getting seasonal inventory with secured business loans.
Benefits Of Secured Loans
- Longest repayment terms
- Lowest interest rate
- Bad credit is not a problem
- Approval for more cash at the lowest rate
- Complete disclosure of all the costs and fees with terms
- No collateral and no personal guarantee required!
- Funding that isn’t attached to your credit score, but to your industry
- Quick turnaround. 24-hour approval. No obligation.
Do you need a secured business loan to help your business grow and expand? Have you been declined by the banks for loan? Then start getting help from Merchant Advisors who offer business funding to businesses searching for some additional financial support.
Merchant Advisors offers a variety of business financing programs to businesses across the US. Whether you are a start-up small business trying to be successful or a previously established firm looking to thrive in a competitive market, getting business funding is an important obstacle to overcome and because of this we are here to help your business move forward.