Whether you are seeking to grow your business or if your business is dealing with difficult situations, you may be interested in considering a business loan.
One type of business loan is an unsecured business loan. Unsecured business loans, as the name implies, are loans that the borrower may be able to obtain that are not secured by any collateral. These uncollateralized debt obligations may be used to expand a business or to deal with near-term critical financial issues.
These unsecured business loans may be used for any reason. Usually people who run their own businesses will use these loans to pay off near-term debts that must be paid in a timely manner. You need to pay the rent on your facility, you need to pay your utilities bills, and you need to pay your employees. There are certain expenses that just must be paid immediately, no matter what. If you do no pay these types of bills, your enterprise may suffer to the point where you need to shut the business down. These unsecured loans can be obtained quickly to make these payments if for whatever reason; you do not have the appropriate cash needed at that time.
The loans can be used to grow your business. There may be a new location for you to open a second storefront for your business. For instance, you may run a dry cleaning business, and a location on Main Street may have just opened up. There is much more foot traffic there, so you think that you would like to have a second location. However, you just do not have the cash on hand to set up that new operation. This is where business loans can be very helpful.
There are two options with business loans. The most common business loan option is the secured business loan. These are loans that are backed by your business or personal assets. Usually the assets of the business will back the business loan. But sometimes, the lender may request or require that the personal assets of the business owner be attached to the loan as collateral. Typically, the assets would be the owner of the business personal home. You may be able to obtain an unsecured business loan. As the name suggests, these are loans that are not backed by any assets.
Requesting a loan from a lender often requires that you make a presentation to the lender. The potential lenders will likely want to review your business plan to better understand what it is that you are trying to accomplish. The lenders will likely want to know how you intend to use the money that you are requesting as a loan.
If the potential lender that you are approaching for a business loan is your regular banker, they may already have a good understanding of you and your business. However if you are approaching a potential lender who is unfamiliar with your company, they will likely want to see your financial records and tax returns for the recent two or three years. The reason for this is that the lenders want to have a good understanding of you and your business in order to make sure that they believe that you will be able to make your loan payments and still continue to operate you business successfully.
Business loans, whether they are secured or unsecured are a tremendous option for those business that need help with a current difficult situation, or are looking to grow their business. Talk to you banker about business loans.
