Gone are the days of small businesses only having the option to work with brick and mortar financial institutions with tight lending habits and slow turn around times. Rather than having to put up company or personal assets as collateral on a working capital loan, many online lenders like us offer loan terms that actually work for the borrower.
Considering an unsecured small business loan for your company? Here’s everything you need to know.
How to Get an Unsecured Working Capital Loan
Applying for a working capital loan that requires no collateral is quite easy when you choose an online lender. Most specialize in fast applications that are reviewed within 12 to 24 hours. The use of your loan funds is flexible, so even if you use it to purchase hard assets for your business, you don’t need to use those assets to back the loan. If you’re approved and like the details of your loan offer, you can receive your loan funds within 24 to 48 hours.
What Lenders Consider for Your Loan Application
Since you won’t be using any collateral for your working capital loan, the lender will analyze the details of your business’s financials to ensure you can handle the payments. We, for example, review your recent performance rather than solely focusing on credit history. Your loan amount is based on a percentage of the revenue flowing through your business's bank account . That way, you should be able to handle the payments, and the lender has less risk since the loan is based on proven performance.
Is an Unsecured Working Capital Loan Right for Your Business?
A working capital loan that doesn’t require collateral is a low-risk way to meet the financial needs of your business. The funds can certainly be used for a short-term cash crunch, but you can also use that extra working capital to grow your company or invest in purchases and upgrades that can increase your revenue.
The Bottom Line
When you have a clear purpose and a defined repayment strategy, a working capital loan can be a huge asset for your business—especially when there’s no collateral required.