Business loans will help you meet your financial obligations as an entrepreneur more often than not. But you are not always in the position to offer your property as security – most often because you don’t actually have your own property yet.
Lucky for you, there are loan options for business owners that can’t or don’t want to throw their assets in as security. The lenders will simply have to evaluate your business’s strength and will approve your application based on your potential and success. You won’t just need a sound business structure, but also a reasonable credit history and good bank statements.
Who Will Offer Loans Without Security?
You can find these types of loans both at banks and alternative lenders. The fees and rates will be different depending on the institution, which is why you may want to go through some “window shopping” before settling on a lender.
An alternative lender will be more lenient and relaxed with you in their lending process. For example, if you have some serious cash flow problems or very negative credit history, then an alternative provider may be more likely to offer you a business loan rather than a bank.
What Loan Options Are Available?
Lenders will offer several types of business loans that won’t necessarily need security, no matter if it’s the form of a house, a car or anything else. Look through the following options and see which one works best for you.
- Unsecured Business Loans
When offering these loans, the lender will consider your financial health and whether or not you’ll be able to keep up with the repayments. These loans are usually short-term (12-36 months) and are mostly granted to those who convey themselves as responsible borrowers.
- Invoice Factoring
Invoice factoring allows you to borrow money against an outstanding invoice and you will have to repay the business loans once the invoices have been honoured by the clients. This method is an easy and quick way to fix the cash flow of your business without bringing out your property as collateral.
- Purchase Order Finance
If you are taking out a loan because you have issues with the cash flow, then this loan will be paying your suppliers for you. This type of loan doesn’t demand property as collateral but is granted according to the profile of your business, your order risks, your experience and the reputations of your suppliers and clients.
- Trade Finance
This one is similar to the option above since it also pays the supplier on your behalf. The repayment will be made on an agreed-upon period, and the loan is given as a revolving credit line. The lender will be a third party financier in this story.
- Equipment Finance
If you have any damaged equipment, you can ask for a loan to purchase that equipment. These business loans won’t ask you for collateral. Instead, they’ll take into account your business’s strength and anticipate the cash flow upon the purchase.
As you can see, you don’t have to put your property on the line when opting for these types of business loans. All you will need is decent financial health and the guarantee that your business will be successful thanks to the loan. For further help, you may enquire with us and see what we can offer you. If you are the owner of a company in Australia, then you’ll surely find a quick business loan option that won’t need security.