For certain companies an unsecured business loan has numerous benefits. They provide businesses with an alternative to traditional secured loans. If for whatever reason your company was denied a loan, you still have the option of getting an unsecured business loan to help your organisation grow. Here are some of the many benefits of unsecured business loans and why they are a great alternative for your company.
Secured & Unsecured Loans
Before applying for an unsecured loan with Max Funding or other alternative lenders in Australia, you should know the difference between the two options. A secured loan is generally given out by traditional money lending institutions such as banks and credit unions. They are backed by collateral such as property, they can be difficult to obtain if you don’t have a great financial background. So, if you need cash to further your company, but you’ve a poor credit rating, you’ll find it difficult to get a secured loan.
On the other hand, an unsecured loan isn’t as difficult to obtain. You don’t need to provide collateral as security, you can use other methods that will satisfy some money lenders criteria. You won’t have to tie personal property to an unsecured loan. Many money lenders in Australia will approve unsecured loans once you can meet their demands. Some of the conditions include:
- Being in business for over 6 months or a year.
- Showing accounts which present a company who are making a profit.
- Showing accounts which prove your business makes a specific amount every year.
Approving an unsecured loan carries more risk for the lending institute, but it provides companies with access to capital in a timely fashion.
Benefits of an Unsecured Loan
They Can’t Touch Your Home > One of the biggest benefits to securing an unsecured loan is that you are safe from collateral repossession. They can’t touch your home even if you’ve trouble making repayment or your default. Your personal assets aren’t part of the agreement, so you don’t have to worry about losing property if you encounter problems.
Easier to Obtain > There are less stringent pre-requisites involved when applying for an unsecured loan, you don’t have to jump through as many hoops as a traditional secured loan application. Most Australian money lenders will require that your business earns over 50,000 annually and has been in operation for at least 6 months.
Online Applications > You no longer must meet with your local bank manager to have a loan approved, you can fill out the whole application form online and wait for a reply within 24 hours. Alternative money lenders have revolutionised the loan process, they’ve made it far more efficient. You’ll immediately have access to funds the moment your loan is approved.
There are multiple benefits when it comes to unsecured loans, they provide SME’s with instant access to funds. As a business owner, you no longer have to approach traditional money lending institutions to request a loan which usually takes a long time to get approved. If you need cash instantly, you should apply for an unsecured loan with a reputable money lender.