Whether you’re a start-up company, or you’ve been in business for years, it may be time to grow your business. However, that can’t be possible if you don’t have the capital to do so, making you wonder where to go and how to do it. You could ask your friends or family for monetary help, but that usually leads to strife and problems. You may choose to use the equity in your home or company, but that could be detrimental if you can’t repay promptly. Therefore, you may want to consider unsecured business loans to help you.
What They Are
An unsecured business loan gets you the money you need for your business without giving any security on your assets, such as your home. They are a quick way to get the money you need using an easy process.
The lender will require that you provide a personal guarantee that means you will pay back the loan personally if the company cannot do so. While it may seem unfair, the lenders have some risk by lending you money through the enterprise. Therefore, if it fails or if you can’t pay the money earned through the company, you will personally be held responsible for the debt.
Many times, you can get up to £200,000, depending on various factors. For example, you will be required to be making money from the business for at least two years and may have background checks.
Getting unsecured loans is quite simple, especially if you understand the process. When you contact a lender, you’ll fill out an application. For most people, it only takes 10 to 20 minutes, and you can request help if necessary. It can take up to two days to hear from someone, which can be daunting. However, they must go through the application and ensure that you’re a good candidate for the process.
If you are approved, you will sign a contract and receive your money as quickly as possible.
It is important to note that these loans usually have slightly higher interest rates, starting at six percent APR and may have one-off completion fees after the acceptance of the loan.
The repayment process can be lengthy—up to five years. However, you are usually expected to start paying back the loan after six months. Your repayment plan may be different depending on your needs, the amount of money you borrow and other stipulations.