An unsecured business loan is ideal for businesses, particularly small businesses, because it is flexible. The difference between an unsecured and secured business loan is collateral. With a secured business loan some sort of collateral is required when you take out the loan. Usually this takes the form of real estate, machinery, furniture and fixtures, or inventory that is pledged to the bank in case you fail to make payments as planned.
When it comes to an unsecured loan no collateral is required. Unsecured loans are relatively rare because the traditional lending institutions want the leverage and security that comes from collateral. This is especially true now, in the post-financial-crisis world. Banks are very risk-averse and are less and less willing to extend credit to small and large businesses alike. Small businesses are the backbone of the US economy, yet many are failing simply because they can’t find a way to finance their operations. Many more are surviving, but can’t grow because of the absence of financing alternatives.
If you're looking for a fast business loan
, a merchant cash advance might be a better alternative for you. First Merchants specializes in unsecured business cash advances and will work with you as you navigate the process. An unsecured cash advance is one of the best options for small businesses so call us today to start an application and work with our trained cash advance funding specialists.