Although secured loans are more preferable, there are plenty of benefits to unsecured loans too, and they may exactly be what your business needs! This blog post will explore some myths behind unsecured business loans so you can make an informed decision on whether or not this type of financing is right for your business.
You may also get clarity on this subject by consulting Versa Business Systems in Pennsylvania for advice.
Myth #1: Unsecured Business Loans are Like Other Kinds of Debts
Fact: Unsecured loans don’t require any collateral or security, which means that there is no risk of losing the company’s assets in the event of default. While it’s true that these loans do come with higher interest rates, but it is a trade-off between the risk of losing the company’s assets and paying a little extra. Lending institutions attach a higher interest rate to unsecured business loans because there is significant risk associated with them.
Myth #2: Unsecured Business Loans are Too Expensive
Fact: Unsecured loans do indeed have higher interest rates than secured options, but it doesn’t mean that they’re unaffordable or not worth your consideration. They’re just different compared to secured loans. You should evaluate all unsecured business loans on a case-by-case basis and not rule them out due to the high interest rates alone.
Myth #3: Unsecured Business Loans are Only for Startups
Fact: While it’s true that businesses with low credit ratings may have trouble qualifying, unsecured options can still benefit established companies as well! Suppose your company has an established credit history. In that case, an unsecured loan can help alleviate some of your financial headaches such as expensive overdraft fees or overdue payments from customers.
Myth #4: The Process of Getting an Unsecured Loan is Lengthy
Fact: The application process for an unsecured business loan is quick and easy! And once approved, the money from your new business line of credit can become available within 48 hours or less! If you have been considering applying for a small business loan but don’t want to deal with complex applications and drawn-out wait times, then try an unsecured option today!
Myth #5: Unsecured Loans Are Only Available to Businesses with Low Credit Scores
Fact: Credit is not the only factor influencing your eligibility for an unsecured business loan! Banks are interested in lending money to all types of businesses, and if you meet their criteria, you’ll get the amount you’re looking for.
Myth #6: Unsecured Business Loans Only Provide Small Amounts of Money
Fact: You can get a significant amount of money from a bank using an unsecured line of credit. These loans are perfect if you need quick access to cash and don’t want the hassle of applying for a traditional small business loan.
Versa Business Systems provides small businesses in Pennsylvania the opportunity to get quick and easy funding with its unsecured lines of credit. You can apply for funding by following a simple application process with minimal credit requirements, and before you know it, you’ll have the funds you need! Apply for funding.