Unsecured Business Loans: What They Are and How to Get One
Running a business can be challenging, and sometimes you need access to extra funds to help you grow or meet unexpected expenses, and two choices are an unsecured business loan and an unsecured business line of credit. In this article, we will supply a comprehensive guide on unsecured business loans, what they are, how they work, and how you can get one.
What is a Business Loan?
A business loan is a type of loan that does not require collateral. This means that you do not have to put up any assets, such as property or equipment, as security for the loan. Instead, the lender will assess your creditworthiness and other factors, such as your business’s revenue and cash flow, to figure out if you are eligible for the loan.
How Do Business Loans Work?
Unsecured business loan are typically short-term loans that can range from a few months to a few years. The interest rates on these loans are generally higher than secured loans, as the lender is taking on more risk by not requiring collateral. However, unsecured loans can be a good option for businesses that do not have assets to use as collateral or do not want to put them at risk.
To apply for an unsecured business loan, you will need to provide the lender with detailed information about your business, including your revenue, cash flow, and credit score. The lender will then use this information to find out if you qualify for the loan and what interest rate you will be offered.
Benefits of Unsecured Business Loans
There are several benefits to obtaining a business loan, including:
1. No collateral needed:
With an unsecured loan, you do not have to put up any assets as collateral, which can be a significant advantage if you do not want to risk losing your assets.
2. Quick and easy:
The application process for unsecured loans is typically quick and straightforward, and you can receive funds within a few days of being approved.
3. Flexible repayment terms:
Unsecured loans often come with flexible repayment terms, allowing you to choose a repayment schedule that works best for your business.
How to Get an Unsecured Business Loan
To obtain a business loan, you will need to follow these steps:
1. Find how much you need to borrow:
Before applying for a loan, you should decide how much money you require and what you will use it for. This will help you select the right lender and loan product.
2. Research lenders:
There are many lenders that offer unsecured business loans, so you should research your options and compare interest rates, fees, and repayment terms.
3. Gather your financial information:
To apply for a loan, you will need to supply detailed financial information about your business, including revenue, cash flow, and credit score.
4. Apply for the loan:
Once you have picked a lender, you can apply for the loan by filling out an application and supplying your financial information.
5. Receive funds:
If you are approved for the loan, the lender will transfer the funds to your business bank account.
BitX Funding: Best Overall Business Loans for Small Businesses
BitX funding is one of the best online marketplaces for unsecured small business loans and unsecured business lines of credit. You can get it if you have over 500 credit scores. The interest rate of this online lending platform starts from 3% only, and you can get a loan of up to $500,000.
Plus, BitX funding is best for unsecured business loans up to $500,000 with credit scores as low as 500. BitX Funding has various products like term loans and unsecured business lines of credit. If you want, you can apply for both.
BitX Funding Business Finance Rates & Fees
BitX Funding’s interest rates for its line of credit start at 7%, and its term loan starts at 9%. Prime borrowers with strong creditworthiness and cash flows can benefit from its funding’s low starting interest rates. Similar to Loan Builder, there is no prepayment penalty, but you’re responsible for the full interest charge if you pay early (although you’ll likely receive a prepayment discount on the interest).
The BitX Funding term loan rates and fees are:
- Starting interest rates: As low as 3% simple interest for term loans up to 12 months and 9.99% AIR for term loans up to 36 months (prime borrowers with a minimum of 500 credit scores can get you potentially get you the lowest rates)
- Expected APR: ~7% to 20%
- Origination fee: 0% to 10% of your loan amount
- Prepayment penalty or termination fee: No prepayment penalty, but you owe the full interest charge if you repay early, with a potential prepayment discount applied
- Additional fees: None
- The BitX funding Capital line of credit rates and fees are:
- Starting interest rates: As low as 7% APR (prime borrowers with a minimum of 500 credit scores can potentially get the lowest rates)
- Expected APR: ~7% to 20%
- Prepayment penalty or termination fee: No prepayment penalty, but you owe the full interest charge if you repay early, with a potential prepayment discount applied
- Additional fees: None
BitX Funding’s lowest starting rates are comparable to those offered by the other lenders on our list, with APRs falling in the range of 7% to 20%.
BitX Funding Business Finance Terms
The unsecured business line of credit product offered by BitX funding is revolving, meaning you can re-borrow the principal on the LOC as often as you repay it. BitX funding offers two unsecured business term loan products: a shorter-term loan (three to 24 months) and a longer short-term loan (12 to 84 months).
The loan terms you can expect from BitX Funding for its term loan include:
- Loan amount: $5,000 to $500,000
- Repayment term: Three to 84 months
- Repayment schedule: Daily, weekly, monthly
- Collateral: No UCC
- Personal guarantee: Required
The loan terms you can expect from BitX Funding for its line of credit include:
- Loan amount: Up to $100,000
- Repayment term: Revolving
- Repayment schedule: Monthly
- Collateral: Blanket No UCC
- Personal guarantee: Required
Conclusion
In conclusion, unsecured business loans can be a great option for businesses that need extra funds but do not want to risk their assets as collateral. By following the steps outlined in this article, you can increase your chances of obtaining an unsecured business loan and growing your business. If you have any further questions about unsecured business loans, please contact us today at 203-763-1430.
