Unsecured Funding: How It Works and Who It Helps
Unsecured loans and lines of credit can provide funding for your personal needs or forstarting and growing a small business. However, before seeking funding, be sure to understand how these sources of funding work and how they can help.
A personal line of credit is a form of unsecured personal loan, in which a bank approves you for a maximum amount of funding that you can draw upon as needed. Interest accrues only on the portion of the line that you have drawn, and you are responsible for repaying only the portion of the line that you use.
A credit cardallows you to borrow money you need as you need it. Once approved for a credit card money is available instantly.
Unlike with a secured loan, such as a mortgage, unsecured loans and lines don’t require you to pledge your personal or business assets as collateral. While lenders can seize collateral if you default on a secured loan, a lender can’t take your property in connection with a default on an unsecured business loan.
However, lenders take greater risk with unsecured loans and lines of credit than with secured funding, as they don’t have collateral to attach if payments aren’t timely made. Because lenders take more risk with unsecured funding, you may also see higher interest rates than with secured funding.In the case of nonpayment, lenders can take legal action against you, including garnishing your wages or reporting to your credit.
Your credit is the most important factor in determining your eligibility for unsecured funding. If you have good credit, you’re likely to benefit from lower interest rates upon repayment and more funding options. Getting an unsecured loan when you have bad credit may be challenging, but it’s not impossible. You may use a credit partner or Co-Signer to strengthen your application and lead to loan approvals. Also you canborrowand repay evensmall amounts of money with financial institutions and do credit repair to rebuild your credit quick.
Check us out to see how our funding programs work…www.3xcapitalgroup.com
Why Unsecured Business Funding Can Be a Good Option
f you are looking to start or grow a small business, and you and your business do not have assets to offer as collateral to obtain secured funding, unsecured business funding may help.
Unsecured business loans and lines of credit are issued and supported based on your creditworthiness, rather than collateral. As such,while an unsecured business loan or line of credit might have a higher interest rate than a secured loan, a new or small business ownercan avoidputting valuable personal or business assets on the line. Additionally, unsecured business loans or lines of credit are great options if your business needs access to cash quickly, as these sources of funding are often approved quickly.
You may still meet income and credit requirements. Unsecured loans and lines can range from $10,000 to more than $250,000, depending upon factors such as your credit score and credit rating.For maximum funding options and amounts, an ideal applicant will have a credit score over 680,strong personal credit history, low overall credit utilization ratio, few inquiries in last 4 monthsand, depending upon your personal circumstances we also allow co-signers and Credit partners.
No business credit and business plan is required.
Check out www.3xcapitalgroup.com to see if we might be a good fit for you.
The Pros and Cons of Small Business Funding
Are you hoping to start or grow a small business? Are you considering a loan from a bank or credit union to do so? Before making a financing decision, consider the pros and cons of applying for business funding
The Pros:
- Lending institutions will not interfere with your business. Unlike with an investor or a business partner, a bank or a credit union will not place requirements on how your business is started or grown A business partnerwill likely expect to have a say in how you spend his money. Lending institutions, on the other hand, are concerned only with repayment, leaving you control over your business.
- Business funding is convenient and easy to access. Applying for a business loan with a financial institution can be as easy as completing an application and understanding the terms of your funding. As a small business owner, your time is best spent on developing your business, not on application paperwork or waiting for investments to yield profits. The same applies to looking for investors and business partners- it’s a long process that can drag out for a long time.
- Business funding can afford you reasonable repayment terms. Many banks are competing for customers and willing to offer a financing structure that is more advantageous than their competitors, whether in the form of a lower interest rate or a higher loan amount. Additionally, the profits from the business are yours. Partners and investors often expect a return on their investment and a percentage of ownership in the businessConversely, when you take out a loan, you pay the financial institution back only the amount of the loan plus interest.
The Cons:
- A certain percentage of your business funding applications may be denied. Banks impose certain requirements on loan applicants. Even applicants with high credit scores and documented income, are subject to rules and conditions related to business funding., and even the strongest applicants will meet the criteria determined by certain banks.
- You may not receive the amount of money you want or apply for. Lending institutions may think that you or your business doesn’t need all the money that you’re asking for, or that your credit profile doesn’t support a particular loan amount. As a small business owner relying on these lending institutions to start and grow your business, the uncertainty as to loan amount can present a challenge.
After considering the pros and cons of business funding, should you decide business loans and lines of credit are for you, and for more information, visit www.3xcapitalgroup.com.
