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Unsecured Business Funding: Is It Right For Your Business?

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Most businesses will at some point need to borrow money, either through unsecured business funding or through secured business funding. Whether it’s for expansion of the physical premises, expansion of the inventory line, loan consolidation, or another reason, loans are invaluable tools for businesses.

Business loans fall into two categories: secured and unsecured.

Secured loans are secured by collateral of some sort, such as land, buildings, inventory, equipment, receivables, and so forth. These types of loans often have less stringent qualification criteria because the loan is collateralized. This means that in the event the borrower defaults on the loan, the lending institution will have a tangible asset it can seize, which will compensate, at least in part, for the defaulted payments.

Secured loans are secured by collateral of some sort, such as land, buildings, inventory, equipment, receivables, and so forth. These types of loans often have less stringent qualification criteria because the loan is collateralized. This means that in the event the borrower defaults on the loan, the lending institution will have a tangible asset it can seize, which will compensate, at least in part, for the defaulted payments.

GoKapital offers excellent terms for:

Secured loans and we have very attractive interest rates. We accept real estate, machinery, and equipment for collateral, and can approve and fund your loan quickly and efficiently. We also offer some of the best terms and most innovative options that you’ll find for unsecured loans and we can approve and fund them in just a few days.

Usually, it’s easier to qualify for a secured loan. It often has a lower interest rate and more agreeable terms than an unsecured loan and takes less time to process. Higher loan limits and longer repayment periods are usually available on a secured loan than are available on an unsecured loan. Unfortunately, if the borrower defaults on a secured loan, he or she will lose the collateral, which means that an expensive piece of equipment or real estate could be lost for a relatively small amount owed. This is particularly disadvantageous for an asset that has appreciated in value; its value is tied to a loan that is much smaller than its actual worth.

  • Another drawback is that the collateralized asset has a lien on it for the duration of the loan. This can prohibit upgrades to equipment, relocation, and more, as long as the collateral has a lien on it. It also prohibits maximizing the value of the land to increase liquidity. For a business, this may be a substantial issue. Secured loans will help build credit, but at a much slower rate than that of an unsecured loan.
  • A secured loan may be advantageous for an established business with a good credit rating that, for whatever reason, may need additional funding. For small businesses or newly established businesses, however, there may be insufficient collateral to allow them to qualify for a secured business loan. Those in this situation should consider an unsecured business loan.
  • An unsecured business loan is often obtained through a private lender and may be more easily obtained than a secured or unsecured loan through a large financial institution. Private lenders are often able to provide unsecured business financing for businesses who are classified in a higher risk category.

bar divideMany times, a private lender has a streamlined loan application process and can provide expedited approval at a better rate than a large financial institution. GoKapital applications can be completed online, approved in as little as three days, and funded in as little as seven days. Amounts from $25,000 to $500,000 are available with no prepayment penalty.Whether it’s for physical expansion, the purchase of additional inventory, hiring additional employees, refinancing existing debt, or another reason, an unsecured business loan can facilitate business growth and help establish business credit.

Although an unsecured business loan accepts higher risk loan applicants, there are minimum credit criteria that must be met. A business must have a minimum of a 620 credit score with Experian and any bankruptcies must have been discharged for at least seven years. Annual gross revenue must exceed $150,000 and the business must have been established for a minimum of two years.

GoKapital requires less documentation than a traditional lending institution.

Two years of business tax returns, one year of personal tax returns, and six months of bank statements are all we require for loans that are less than $150,000. For loans over that amount, we’ll also require a profit and loss statement, and a balance sheet.

  • Considering the far more stringent lending criteria of most financial institutions, an unsecured business loan with GoKapital is far easier to obtain and takes substantially less time. We offer competitive rates and many times, the interest and loan fees are tax deductible.
  • Our revenue-based, cash advance option can provide working capital for your business on an as-needed basis. To qualify, a business needs to have been established a minimum of four months and needs to have at least $10,000 per month in business bank deposits. For the times that your business needs immediate working capital, this is the ideal solution.
  • Many banks have very stringent criteria for loans, so obtaining an unsecured business loan, especially for a new business, can be almost impossible. GoKapital’s cash advance option is the perfect solution to the problem of lack of working capital for small or new businesses. We also interface with the Small Business Administration so we can work with banks to find your business the most attractive programs that will meet your business needs and help it grow.

bar divideWe also can solve your funding needs by invoice factoring. We pay up to 90 percent of the value of the invoices and there are no hidden costs. We realize that it’s not always possible to wait until customers pay their invoices, so we can advance the money to you and then wait until the invoice is paid to receive our payment.We’re not a collection agency; we do not pursue your clients for payments. Rather, we facilitate your collection of the invoices by providing the up-front capital to you. There is no long-term contract on our invoice factoring process. You provide invoices as you want to factor them and then we advance the payment to you.

  • Our women-owned and Latino-owned unsecured business financing programs provide guidance and funding in order to improve the success rate of this business demographic. Many programs are available to help this segment of the business population achieve success and we work with the Small Business Administration to match the business to the program or programs that will work best for them.
  • We were awarded first place for our efforts in providing business and financial assistance to some of the 3 million Latino-run businesses in the U.S. Studies have shown that Latino businesses often struggle to obtain financing for their businesses. We can help you with that. Many national and local organizations provide assistance to Latino business owners who seek to fund and we can help you locate the appropriate organization, including the Latino Credit Union.
  • We specialize in helping small businesses expand and succeed. Our unsecured business loans are ideal for purchasing new equipment or real estate, helping women-owned businesses get established, providing immediate working capital, and more.

Although our company is located in Miami, Florida, our online presence enables us to provide unsecured business funding to businesses throughout the United States. If you own a business, whether you are just starting out or whether you have an established business, be sure to contact us today and let us help you grow your business.

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