Unsecured business loans do not require any collateral from you or your business. The amount for this type of financing will depend upon your business’ creditworthiness and revenue.
If you are thinking about applying for a normal bank loan, then you will need to have collateral. This refers to the business asset that you could borrow. If you could not pay back the loan, then the banks will take your asset instead of payment.
The Unsecured Business Loan Singapore is not guaranteed by any property. This is the reason why they are a bigger risk for lenders. They provide higher interest rates versus the secured loans. However, they can also give bigger loan amounts and provide more flexibility.
The unsecured business loans can range from $5,000 to $500,000, depending on credit rating and business size. As such, here are some things that you must look out:
Reasons Why You Need the Loan
If you wish to take out a loan that is not backed by any collateral, you must consider first how you will use the funds. Because of the quick availability of the funds from unsecured sources, it will be easy to misuse the financing. As such, as you take the loan, make sure to have a concrete plan on how to use the money. Furthermore, have a concrete plan on how will you repay the loan.
Have the Unsecured Business Loans for Smaller Expenses
Because of the nature of the unsecured loans from EasyFind SG, lenders will more likely to charge you with a higher interest rate than with a collateralized loan. This increased interest rate is the price that you have to pay for not having your car, house, or savings account on the line. As such, you must calculate your interest rate to have the idea of how much will it cost you.
Determine the Various Kinds of Unsecured Business Loans
Unsecured business loan Singapore come in many sizes and shapes. They come in different interest rates, repayment terms, and formats. As such, you must have a clear idea of the things that you are looking for as you find the right business loan for you.
The Business Credit Card is an unsecured loan that you can repay depending on the amount you have spent the previous month. This can be a solid option if you have minimal expenses.
Another type of unsecured loan is the Merchant Cash Advance. In this type of loan, the lender will take a percentage of your daily income or set a daily amount until the loan has been paid. Indeed, this is effective in a high merchant cash advance. This can be very useful for high-volume businesses with many credit card transactions.
Another type of unsecured loan is the Business Line of Credit from Capitall. This refers to the banks’ line of credit that works similarly to a credit card. You will only make payments based on what you draw down from the credit line.
Meanwhile, the SBA loans or the Small Business Administration loans do not require any collateral too. These are very difficult to acquire and qualify.
Finally, traditional loans are also one kind of Unsecured Business Loan. You can borrow a set amount of money. Then, you will agree to pay it back at a certain period with interest. This is the first thing that people think of when they say ‘loan’.
Understand the Interest Rates
One of the most crucial factors to consider is the interest rates. This is because many lenders charge more than what the businesses can afford to pay. Beware of lenders who do not disclose their rates. Be wary of lenders who provide you with pricing that you cannot understand. Make sure to look for a simple yet transparent agreement that will clearly show the interest rate that will apply to your loan balance.
Find a Technology Platform that Will Fit your Business
Find a platform that will automatically review your business data and provide you real-time decision. Traditional loan providers will give you online forms to capture your details. However, the information is still processed manually. You will have to wait for weeks for an answer. As such, you must find yourself with an online loan provider who uses smart technology to make decisions. You must not waste time waiting for their approval.
Understand the Terms of the Unsecured Loan
Lenders offer the unsecured loan for different terms. In most cases, the lenders will dictate the terms of providing financing since all they have whenever they offer their funds to their clients is faith. Before taking the loan, make sure that you consider the rate and the method used to come up with the interest. Determine the term of repayment they offer, the schedule, and the penalties for breach of contract.