Business loans typically come in three “flavors.” Secured business loans require the business owner to pledge some or all of the company’s assets as collateral for the financing. Unsecured business loans do not require you to pledge company assets, but often come with a slightly higher interest rate for the privilege keeping your assets free of encumbrance. SBA (Small Business Administration) loans are the third popular option for financing your business.
The difference between secured and unsecured business loans is clear and easy to see. Business loan and SBA loan differences are a bit more subtle to explain. First, understand that the SBA offers direct loans in modest amounts. Newer businesses are eligible for direct loans up to $25,000. Existing businesses can qualify for up to $35,000. In all other cases, the SBA guarantees up to 85 percent of larger business loans made by others.
Qualifying for a direct SBA loan is fairly easy. If you have a credit score of 680 or higher, with no recent derogatory notations on your file and your business has been functioning for a minimum 2 years, you should qualify for SBA financing. Applying online with UnsecuredBizLoan.com is fast, easy and secure. You will have an answer within 48 hours.
Whether you’re starting or expanding your business, financing will be an important component of your business plan. Classic business loans, whether secured or unsecured, must be handled and managed properly. Qualifying for traditional business loans may be a bit more complex than getting an SBA loan, depending on your company’s situation, the purpose and amount of your financing. Most business loan companies hope that borrowers repay properly so they will qualify for additional financing in the future.
While the SBA has a government “mandate” to help small businesses, classic commercial lenders seek promising companies that have consistent cash flow to predict timely repayment. Should you have poor credit, you may still qualify for a business loan designed for credit-challenged businesses. Using an SBA or business loan wisely and correctly improves your personal and company credit standing, qualifying you for future loans.
To apply for funding for your small business, use the form on the right to begin the application process.