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When unsecured business loans are the answer

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When unsecured business loans are the answer

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Unsecured Business Loans

In the wake of the nation’s credit crisis, businesses who need to borrow money to fund their growth often find it difficult to do so. Most banks typically demand a large amount of collateral in the form of hard assets as well as a credit score above 700 before providing a loan. But for companies without significant assets or a slightly lower credit score, unsecured business loans might be an answer.

Here’s a look at what an unsecured loan is, how a business can qualify for one, and what GoKapital, based in Miami, Florida offers in the field of unsecured business loans.

What an unsecured loan is

Most bank loans Fort Myers and other Florida businesses obtain are secured using an asset that has an agreed-upon value. Mortgage loans are based on the value of a property — a house, a condo or land. In order to secure the loan, the borrower will concede that, if the loan is not paid, the bank has the right to repossess the property and sell it to raise the money that formed the basis of the loan.

Similarly, auto and boat loans are based on the value of the vehicles or vessels.

The problem, however, is that in today’s technology-driven business world, many companies do not possess significant assets, apart perhaps from office furniture and computers, that they can offer as security. In addition, the assets that they have are of low value when measured against the amount of money that they would like to borrow.

But that does not mean that loans Brandon businesses and others in Florida require are not available. An unsecured loan is an ideal solution. It does not require an underlying hard asset in order to obtain the loan. Examples of unsecured loans are credit cards, payday loans, and some personal loans. Unsecured loans are also known as revenue-based loans as they can be based on the earnings power of a company or a person rather than assets.

Helping to grow the business

Using such loans St. Petersburg companies and those in other areas of Florida without significant hard assets can borrow a significant amount of cash to grow their businesses and take them to the next level. With such loans, Hialeah and other Florida businesses with little in the way of assets can fund such projects as launching a marketing campaign, buying additional inventory, or hiring temporary staff. And armed with unsecured loans Port Saint Lucie and other Florida firms with few resources such as buildings or machinery can obtain cash to enable them to invest in their businesses in order to outperform the competition.

In most cases, interest rates are almost always higher for unsecured loans than for secured loans. The reason is that the lender is taking a higher risk on the loans. Should they not be paid, the lender has no assets that can be sold to recoup the money that was lent to the borrower. There are exceptions to this standard, however, and much depends on the nature of the company, its record, its time in business and similar factors. To acquire loans West Palm Beach businesses and others in Florida should make inquiries to see whether their situation qualifies them for an unsecured loan.

What a business needs to qualify for an unsecured loan

Clearly, the borrower wants to make sure that the chances of being paid back for the loan are good. As a result, when applying for unsecured loans Cape Coral businesses and those elsewhere in Florida will need to meet certain standards before they can be qualified to obtain them.

Here are some qualifications that need to be taken into account for unsecured loans Delray Beach and other Florida companies might need.

• A good business credit report

If a company has been paying its bills on time that record will go a long way toward helping to establish a good credit score.

It also helps to boost a score if a business is organized in conducting business transactions. In many cases, the money is available and the will to pay is there, but the lack of attention to details such as forgetting to transfer money from savings to checking to meet obligations drags down the company. The resulting bounced checks or late payments can cause unnecessary debts on a credit report.

If your credit score is low right now, particularly as a result of such dilatory actions, work hard at bringing it up so that you might be able to obtain an unsecured loan at a future time when you might need it even more than now. It might take less time than you fear.

• Time in business

A proven track record can go a long way in showing that a business will faithfully pay back its loan. If a business has been showing steady income and profit over a few years, the chances that it will pay back any loan are good. In addition, with loans Clearwater and other Florida companies are likely to grow more quickly and to show a greater profit, enabling them to pay back the loan more easily.

Also, with such loans Boca Raton and other companies in Florida who have been in business for some time can improve their standing so that they will be able to remain in business long after the loan has been paid off.

• Gross revenue

A business needs to be recording a reasonable degree of sales in order to be considered capable of paying back an unsecured loan. The measure adopted usually is the annual gross revenue, which is the amount that is coming through the door each year. The measure does not apply to profit, which is the net income after expenses are deducted from gross revenue.

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What GoKapital offers

Because GoKapital wants to help businesses use these loans to succeed, the lending company offers extremely competitive interest rates on unsecured business loans when compared with the general industry standard. A loan amount from $25,000 to $500,000, for example, that runs from a year to 5 years is obtainable at an interest rate as low as 5.9 percent.

To meet the requirements of these loans a business should have been in operation for at least two years, should have a credit score of at least 620 (Experian), should have an annual gross revenue of $150,000, and should not have filed for bankruptcy in the last 7 years. Amounts up to $5 million are available.

Companies that fall short of these qualifications are welcome to apply; there is a possibility GoKapital can lend them money, too.

Call us at GoKapital today to find out how we can help you with one of our unsecured business loans.

 

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