Unsecured Business Loans vs. Secured Business Loans: Which one is better?
Need significant business funding to fund a new project or to fulfil a vital business goal?
Choose between unsecured and secured financing.
Wait! Do you know the difference?
Secured loans for businesses belong to long-term financing, which requires a business asset to be pledged as loan collateral. Borrow funds for a longer duration, too.
Unsecured business loans bring the following BENEFITS for your company:
* Borrow up to £250,000 for a maximum of 5 years
* You can save a lot of time by not arranging any asset to secure the loan
* Use the borrowed sum for any of your commercial purpose with no restriction
* Get the benefit of competitive interest rates and flexible repayment terms
* Your loan request gets a quick response as the lender does not need to verify the collateral.
Secured business loans also bring a lot of BENEFITS for every industry in the UK
* Get the maximum amount of up to £500,000 for 10-15 years
* Your asset almost guarantees 100% loan acceptance for your business
* Lower interest rates? Yes, that is for sure with these loans
* Longer term ensures fixed instalments and better to maintain regular cash flow
* You qualify for tax deductions on the interest rates on other loans like commercial mortgages
Ignoring the RISKS involved with unsecured business loans can be costly.
Here are a few:
* Higher interest rates may add extra burden on your business finance
* Lower amount is allowed only and may not suit the larger financial purpose
* You need to arrange a personal guarantee as collateral is not there
Secured business loans are not untouched by any RISKS. In fact, these also involve many disadvantages, such as:
* Loan process will take time as lender has to verify the pledged asset
* You will lose your business asset once you default on the loan
* During financial emergencies, these loans are not a suitable option.
Looking for a trustworthy UK broker to get the effective deals on secured business loans or unsecured loans for business? Thebusinessfunds is no doubt the right place for you