Unsecured Business Loans

Are Unsecured Business Loans A Thing Of The Past?

A small business loan, back in the day, used to be unsecured and doled out by banks to a pretty typical middle class family. During those times, having your own business used to be much more common, and banks used to be much less demanding in terms of who they’d do business with. Those days are long gone, and these days, it seems like most small business loans out there come with the stipulation of having collateral on hand.

This isn’t a good thing for business owners, since many of them often have to put down their own house as collateral. If their business fails, then they not only lose their mode of making money, but also lose the roof over their heads. Many people simply do not want to make that kind of risk – and we really cannot even blame them for it. After all, who wants to make that kind of gambit?

Most banks currently avoid catering to “Main Street” businesses such as stores or restaurants, unless the amount that is being borrowed is high. More often than not, they also will require excellent credit, a currently established business, and collateral for a small business loan as well. Considering how cutthroat the industry is, it’s hard to imagine that it’s even possible to get an unsecured business loan anymore.

However, it is possible.

There are currently three common routes that a business owner can take in order to get alternative business loans, or really, any form of unsecured business funding. Here’s what you can do if you don’t want to plunk down collateral, and can’t seem to get an unsecured loan from a typical bank.

  1. You can get crowdfunding done. Crowdfunding on certain sites like Kickstarter can be tricky, and can require you to do a lot of marketing in order for it to work. However, the good news is that you generally do not have to pay back the money that you raise.
  2. You can try non-mainstream lending firms. This basically means that you don’t head to big banks in order to try to get your unsecured loan. The good news about this route is that smaller banks tend to be more lenient when it comes to lending practices. The bad news is that, at times, it may still be too difficult to get an unsecured loan. However, if your company is already up and running, a merchant cash advance may be a doable option.
  3. You can also try going to an incubator. Incubators are mentorship programs that basically teach you how to successfully run a business. They also can help with funding, first year taxes, and more, depending on which group you end up choosing to work with.

Though it may seem like unsecured business loans are a mythical occurrence that don’t happen to small business owners unless they have a perfect FICO score and a world-famous company, the truth is that they are within reach. All you have to do is make sure that you work hard at finding it.

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About Capital Key

Capitalkey will help you take your business to the next level! Our expertise is business funding and merchant processing. We offer great options to businesses that need a quick and easy cash infusion (even if you may have got turned down previously!) We also offer some of the lowest rates in the merchant processing industry! If you are currently processing with another company we highly recommend taking advantage of our free statement audit, which will allow us to identify if you are getting charged higher rates and/or fees unnecessarily. Typically we can help our clients reduce their processing costs by 20-30% on average!

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