Small business SBA loans are an option for small companies who need financing for further growth and expansion. The main problem is that sometimes the small business SBA loans might not be an appropriate solution or the company might not be able to obtain the loan for any reason. Fortunately, alternatives to the small business SBA loans are available for business owners who are ineligible for the other loan.
Unsecured Business Loans:
Unsecured small business loans are an alternative to the basic SBA loans that business owners might consider. This type of loan does not require any collateral for qualification, making it is an ideal option when the company does not yet have any assets.
Unlike SBA loan rates, which are kept reasonable, unsecured business loans might have a higher than average interest rate. This is the main downfall of this type of alternative lending option. The unsecured business loans are considered a higher than average risk when compared to other debts, resulting in a much higher interest charge.
Despite the high fees, this type of loan can provide funding for necessary projects within the company. The less stringent conditions and requirements of the loan are ideal if the business has been turned down for other lending options.
Business Credit Card:
The business credit card is another alternative to the SBA loans. The business credit card is similar to any other credit card, but is designed around the needs of a company. Depending on the business income, the amount available on the card will vary.
Business credit card interest rates are variable based on several factors, so it might be more or less than the SBA loan rates. New companies should expect a higher interest charge because the business has not yet established the company credit history. Personal credit history of the business owner might bring down the charges if the credit card company is willing to allow a personal guarantee and uses a credit check.
SBA loans are not the only option available to small businesses. Unsecured loans, credit cards and even just basic business loans are options that might be appropriate to consider as an alternative.