Are no collateral small business loans expensive? This is a question that is asked of small business funding sources on a daily basis. Often small business owners expect alternative lenders to fund using terms and fees that mimic traditional banks and or credit unions. This is not the case. The merchant must realize that these alternative lenders who provide no collateral small business loans are not banks. If a merchant wants a bank loan they should go to a bank. If a merchant doesn’t mind waiting 8 weeks to get funded they should go to a bank. If a merchant has excellent credit they should go to a bank. If a merchant has been in business for more than 3 years they should go to a bank. If you as a merchant do not fall into these groups and are looking for a unsecured small business loan then alternative business lenders are the right choice. They are private lending institutions that have a much higher appetite for risk. With this risk come higher fees. A merchant that uses an no collateral small business loans funding source should understand this and expect this from the outset and not get ticked off at the lender. These are private entrepreneurs who are underwriting and lending their own money. While a bank charges maybe 3-10% APR for several years, an alternative small business lender will charge 20-50% with terms of less than 12 months and most at 4 months. That is the price of getting capital fast without hassles. So the next time one of you small business owners are turned down by your bank and you turn to an alternative lending source for no collateral small business loans do not be surprised by their fees….be happy you received your money in a few days and were able to capitalize on it.
No one likes to be in a position to have to borrow money. But in business it is necessary and makes sense when you know you can get a good ROI. Business owners in need of no collateral small business loans should weigh what the loan will cost against how much money he/she will make. Apply for no collateral small business loan today.