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Unsecured Small Business Loans

By at May 27, 2010 18:05
Filed Under: Unsecured Loans

It is impossible to run a business without requiring a loan of some sort during the course of the business’ life. Business owners who are able—at any stage—to use business revenue rather than loans are few and fortunate. However, when the time comes to take out loans, most business owners prefer unsecured small business loans, rather than loans that place their personal or business assets at risk.


The initial state of starting a business is all about planning. Banks might approve personal loans, but will not approve unsecured small business loans for a business that does not yet exist. At this stage of the game, most business owners finance this research and business plan development with their own assets, or with unsecured small business loans from friends or family.


When it is time to start the business, banks are still very hesitant to lend to an unproved entity. Business owners are required to show substantial personal investment, responsible management of their own finances and very good credit histories to acquire any funding at all, but will almost certainly have to pledge personal and business assets as collateral until they have a record of accomplishment.


The early years of a business are a good time, however, to establish a line of credit to allow for fluctuations in cash flow and to make minor purchases. Whether a small business is able to obtain a secured or unsecured credit line will be determined by the initial evidence of the business’ stability and promise, as well as the owners’ personal finances.


Unsecured small business loans are appropriate and possible for the expansion and growth phase of business. Business owners should be able by then to show years of positive cash flow, steady sales, good management and to project an increase in revenue that will make it possible to repay small business unsecured loans.


To apply for an unsecured small business loan click here.




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