If you’re looking for extra capital for your business, a short-term unsecured business loan may be the answer. They are flexible, easy to access loans that give business owners the capital they need, when they need it.
Business owners will typically take out unsecured business loans for a variety of reasons. It might be to take advantage of a new opportunity, to handle cyclical business demand, to manage a cash flow bottleneck, take on new staff or purchase inventory.
What exactly are unsecured short-term business loans and how can they be obtained?
Short-term unsecured loans for small business
An unsecured business loan is a type of loan that does not require collateral or assets to secure the financing. This means that the loan isn’t secured against existing assets such as property, meaning that should the borrower default, assets are not directly at risk.
With a short-term unsecured business loan, the lender will evaluate the credit history of the applicant, their business revenue, profitability, and any other financial factors to judge their capacity to repay the loan. They will make a judgement of the risk involved before reaching a decision about whether or not to advance the requested loan amount. The decision to approve the loan and determine the loan amount is primarily based on the borrower’s creditworthiness.
Because there’s no collateral involved, short-term unsecured business loans will typically have higher interest rates than secured loans. This is because the lender is taking on a higher level of risk by advancing funds without any assets to back it up.
It’s important to remember that because you are paying back the loan over a shorter period, the amount you pay back in interest is still likely to be significantly lower than you might pay with a long-term loan at a lower interest rate.
How do you obtain a short-term unsecured loan for your business?
Obtaining a short-term unsecured loan for your business will generally be easier and quicker than the process of applying for a long-term loan. Your overall credit worthiness will be the primary consideration for any potential lender, along with the amount of money you want to borrow and the length of time over which you wish to repay the loan.
Short-term business finance specialists are often able to provide unsecured loans even if an applicant does not have a perfect credit history. To reflect the extra risk involved for the lender in these cases, the interest rate charge may well be higher.
If you’re considering a short-term unsecured business loan, it’s recommended that you talk through your options with a business finance expert. It’s also important to be realistic about your ability to pay back any loan and the amount you wish to borrow.
Short-term unsecured business loans from Business Finance House
If you’re looking for a short-term unsecured business loan, we cover all locations, from business loans in Liverpool, Cheshire, or nationwide! Our experienced team at Business Finance House can help. We work with our clients to find the most appropriate funding for your business needs.
Our short-term unsecured business loans are flexible and affordable, making it straightforward to raise the capital you need, when you need it. If you need information on short-term business loan interest rates, or anything else regarding short term finance, contact us today to find out more about our short-term business loan options.
